Four days before Cheniere Energy was to go to trial against its former CEO and business competitor, Charif Souki, the Houston-based energy company permanently dismissed all of its claims in the litigation, The Texas Lawbook has learned.
Lawyers for all the parties — Cheniere; Souki; Parallax Enterprises; Souki’s business partner, Martin Houston; and their new company, Tellurian Investments — appeared before a Houston state court Thursday to announce that they had agreed to a walkaway deal.
Thursday’s voluntary dismissal closes the door to a drawn-out legal saga that began more than four years ago after corporate raider Carl Icahn drove Souki out of Cheniere, the liquefied natural gas company he founded two decades ago.
In an interview with The Texas Lawbook, Souki said he was not surprised that the case did not go to trial. He said he believed Cheniere’s intentions were made abundantly clear when they asked the Harris County District Judge Fredericka Phillips multiple times to continue the trial date.
To learn more about the Cheniere case and the lawyers involved, read The Lawbook’s previous in-depth report here.
“They were trying to slow us (Tellurian) down and make it difficult for us to run our business, which never worked,” Souki said. “I can see from the depositions that they were woefully unprepared. I don’t think any of the directors that have been deposed were really intending to be in court holding their positions. It was a colossal waste of time but very predictable.”
“If you live in a glass house, don’t throw stones,” he added.
Cheniere and its lawyers declined to comment.
Beyond the personal animus, Thursday’s deal represents a walkaway from high-dollar liability that Cheniere and Parallax both faced against each other.
The litigation was initially just between Cheniere and Parallax over a $46 million loan Cheniere said it was owed when the two pursued a possible deal together to develop a couple of mid-scale LNG facilities in Louisiana. Cheniere decided to cut the deal with Parallax from the company budget in late 2015 at the same time it decided to terminate Souki.
Cheniere later sued Souki, Houston and Tellurian, bringing them into the litigation.
Parallax was seeking $400 million from Cheniere at trial — $200 million for each project that it said Cheniere breached its contract to, since in Parallax’s view the two companies had formed a legally-binding partnership.
The walkaway deal also resolves a sub-battle Cheniere and Parallax were currently undergoing in the Supreme Court of Texas over whether Cheniere could move forward with collection proceedings on the $46 million it said was a loan.
Parallax’s lawyers could not be immediately reached for comment.
Houston attorney Kent Schaffer, who represented Houston in the litigation, said the walkaway deal began coming together very quickly in the past 24 hours.
“My client is relieved it’s over because it was consuming a huge part of his life in the last few years,” Schaffer said. “Even though we’re pretty sure we’d win at trial, you never know what could happen at trial. He’s looking forward to continue to build the business of Tellurian without having to spend six weeks in the courtroom.”
Editor’s note: this is a developing story. Further details will be published as they become available.