DENVER — Six women and two men were selected Monday morning to decide whether a text message exchange constitutes a binding contract between Tellurian founder Charif Souki and a major investor.
Investor Chris Parker’s theory of the case hinges on the jury’s determination of the weight that should be given to the texts between him and Souki over Houston-based Tellurian Investments stock.
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 much stock he had in Tellurian, to which Parker responded that he had 5.5 million shares, worth about $8.30 each.
The text message Parker alleges is a contract 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.”
The list of claims against Souki includes breach of contract and unjust enrichment. Parker is seeking about $45 million in damages.
Souki founded Houston-based Cheniere Energy in 1996 and was ousted after billionaire investor Carl Icahn took over the company. He then formed the rival company Tellurian Investments in 2016. There was litigation over those matters, which settled in January 2020.
Opening statements in U.S. District Judge William Martinez’ courtroom began after lunch Monday. Matthew Schwartz of Boies Schiller Flexner told jurors, “This is a case about lies and broken promises.”
Schwartz explained that a few months after the text exchange, the value of Tellurian’s stock began to decline, prompting Parker to worry and ask about Souki’s text message guarantee.
“Mr. Souki never denied he owed the money. He never denied it until this lawsuit,” Schwartz said.
Schwartz said the evidence shows that if Souki had made good on the alleged guarantee, then he would have paid Parker $39 million.
He closed by telling the jurors to use their common sense.
“Hold him accountable to his lies and promises, and you will send a message that a person’s word matters,” Schwartz said.
Souki’s counsel, Tim McConn of Yetter Coleman, argued that Parker got buyer’s remorse and made a bet that he lost. He explained that, for it to qualify as a contract, Souki would have needed to receive some benefit from the deal.
“No consideration. No deal,” McConn told the jury.
McConn said Parker wasn’t considering selling, which is reflected in the text message exchange.
In February 2020, Tellurian stock went from around $8 or $9 a share to about $2 a share in a month. McConn displayed a text message from Parker from that time that read, “This stock is giving me a heart attack.”
“That’s not how you react when you have a guarantee,” McConn said.
McConn explained that in May 2020, Parker asked Souki about the guarantee. The two men met for a conversation, during which Souki allegedly stated that no guarantee existed.
Evidence presented to the jury showed that a few months later, Parker told his bank he was getting a contract to prove the alleged guarantee.
Eventually, Parker showed up at Souki’s home in Aspen with a formal contract, but Souki refused to sign it.
“Ladies and gentlemen, you don’t get do-overs when it comes to buying and selling your stock,” McConn concluded.
Parker’s life-partner, Yousra Bellamine, was the first to be called to the stand. She testified that she and Parker had conversations about the alleged guarantee.
The day concluded with testimony from Peter Selman, an expert witness on equity transactions and finance, including as the former head of equities at Deutsche Bank and the co-head of equity trading at Goldman Sachs. He explained how buying and trading stocks works and why prices fluctuate. Selman stated in his presentation that the text exchange was a written guarantee that benefited Souki economically.
He said that the alleged agreement not to sell the stocks was the consideration Souki got in exchange the alleged guarantee.
Selman will return to the witness stand Tuesday.
Souki is expected to testify Wednesday.
Lauren Goldman, Jonathan Schiller, Jeffrey Waldron and Claire Greenberg of Boies Schiller Flexner are representing Parker.
Souki is also represented by Paul Yetter, Daniel Nightingale, Bonnie Fraase and Tyler Young 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.