DENVER — Parties in the breach of contract case against Tellurian founder Charif Souki over an alleged guarantee in a text message rested their cases Thursday afternoon.
Jurors heard testimony from investor Chris Parker and Souki over the course of three days in U.S. District Judge William Martinez’ courtroom.
The five-day trial began Monday. Parker filed the suit in January 2022, claiming Souki told him to hold onto $8 million in Tellurian stock during a short-selling campaign and promised to personally guarantee any losses and then backed out of the deal.
In the text message exchange, Souki asked Parker how many shares he had in Tellurian stock, and Parker responded that he had 5.5 million shares, then worth about $8.30 each.
The text message from 2019 Parker alleges is a contract that reads, “Please keep this text. I will guaranty [sic] your capital by Dec. 2020. I’ll make up any capital deficiency you have at that date.”
Parker first took the witness stand on Tuesday afternoon, which bled into Wednesday.
Craig Wenner of Boies Schiller Flexner questioned Parker on direct examination. Parker first learned of Tellurian Investments from Paul Kessler in Los Angeles. Kessler is a friend of Souki’s, and his wife served on the Tellurian’s board of directors.
They went through several texts between him and Souki throughout the years. Parker said they were friends who did business.
Parker claimed he was “very ecstatic” when he received Souki’s alleged guarantee.
“He’s given me his word he would pay me out,” Parker said.
He added that neither of them thought they would be in the position to proceed to trial.
Wenner walked the jury through additional text messages between the two men in which Parker referred to the alleged guarantee to Souki. Parker said Souki never denied the guarantee in the text messages.
Parker testified that he was anxious about the COVID-19 pandemic in 2020, so he wanted a legal contract signed by him and Souki to serve as the alleged guarantee. He said that while Souki agreed to extend the deadline to 2021 and add an interest rate, he refused to sign the draft agreement.
“This is definitely my last resort,” Parker said
Tim McConn of Yetter Coleman questioned Parker on cross-examination. He displayed the amended lawsuit that Parker signed off on and asked whether the paragraph stating that he told Souki he wanted to sell his shares of Tellurian was accurate. Parked stated it wasn’t.
“It’s badly worded,” Parker said.
McConn then displayed the demand letter Parker’s attorney sent to Souki, seeking repayment of $49 million.
Parker said the demand letter had errors in it — such as the year and the statement that he told Souki he wanted to sell his shares — despite signing off on it.
“Errors are one thing, sir. False statements are another,” McConn said.
Parker stated he did not know why Souki asked how many shares he had and what they were worth.
McConn showed WhatsApp messages between Parker and his bank in which he said he was in the process of executing a contract on the guarantee.
“If you are executing a contract, then you don’t have a contract,” McConn said.
Souki took the stand Wednesday afternoon and continued into Thursday morning. Matthew Schartz of Boies Schiller Flexner questioned Souki on direct.
He denied the text constituted a signed contract between him and Parker.
“It was a statement of intent,” Souki said.
He added that he told Parker to save the text so they could properly document it later. Souki said it needed more elements because it wasn’t clear.
Souki agreed with Schartz that he did not say in his text message, “presuming we reach an agreement.”
Schartz asked Souki why he didn’t deny the guarantee later when Parker texted him about it. He said that he felt Parker was misconstruing his texts and wanted to talk on the phone or in person.
“There was no guarantee,” Souki said. “I didn’t promise anything.”
Souki denied agreeing to extend the December 2020 deadline and including interest payments as Parker claimed in his testimony.
Tyler Youngof Yetter Coleman questioned his client on cross-examination. He had Souki explain that he inquired about Parker’s shares because he wanted to see whether Parker had enough shares to place in a controlled escrow account with the bank.
“I never expected to do a $45 million deal over text,” Souki said.
Souki said Parker denied putting his shares in a controlled account, so he assumed that was the end of the discussion. He testified that Parker never indicated to him that he intended to sell his shares.
Schartz again asked Souki about the text message on redirect. Souki told him it wasn’t a promise and that the contract Parker had written was several pages because the five-line text message wasn’t enough.
“It’s a preamble to have reasonable negotiations,” Souki said.
The plaintiffs had damages expert Seth Flieger testify. In his presentation, he said the capital loss from allegedly failing to pay the 2019 guarantee is $38,956,069. The capital loss from failing to pay the alleged extended 2021 guarantee, including interest, is $30,769,404.
After the plaintiffs rested their case, the defense moved for judgment on all claims and rested. Judge Martinez heard arguments alleging the plaintiffs had not provided enough evidence to support their claims.
Judge Martinez considered the motion in chambers and then returned to the bench, where he denied the motion in its entirety.
Judge Martinez told counsel that the plaintiffs have provided sufficient evidence to the jury on all claims.
The parties plan to give their closing arguments Friday morning and then turn the case over to the jury.
Lauren Goldman, Jonathan Schiller, Jeffrey Waldron and Claire Greenberg of Boies Schiller Flexner are representing Parker.
Souki is also represented by Daniel Nightingale and Ayla Syed of Yetter Coleman and Melissa Romero and Marissa Ronk of Wheeler Trigg O’Donnell.
The case is Christopher Parker, Red Mango Enterprises Ltd. v. Charif Souki, 1:22-cv-165.