Isramco, Oil Well Developer, Is Sued by Shareholder Alleging Mismanagement
Isramco Inc., which formerly explored for oil and gas in Israel and now develops wells in the U.S., was sued by a shareholder contending some officials including Chairman and Chief Executive Officer Haim Tsuff mismanaged the company.
In a lawsuit filed yesterday in Delaware Chancery Court, investor Yuval Lapiner contends Tsuff, company director Jackob Maimon and some other directors violated duties to shareholders, wasted corporate assets and should pay damages to the Houston- based company.
Lapiner cites “numerous self-dealing transactions engaged in” by Tsuff and Maimon “at the expense of Isramco and its shareholders.” Tsuff owns more than 57 percent of Isramco stock and is the controlling shareholder, according to court papers.
Isramco, which reported a $13.5 million net loss on $31.7 million in revenue last year, according to data compiled by Bloomberg, said in February 2008 that it paid $102 million to buy rights to 590 wells in Texas, Oklahoma and New Mexico.
The lawsuit includes allegations that valuable assets of Isramco were transferred to entities controlled by Tsuff and Maimon “at bargain-basement prices.”
They also benefitted from leasing of a cruise ship, sale of undeveloped land, loans made by Isramco, and consulting agreements, according to court papers.
Directors “are required to use their utmost ability to control and manage the company in good faith,” said Lapiner, who filed the lawsuit in behalf of the company.
Tsuff and Edy Francis, Isramco chief financial officer, didn’t immediately return voice and e-mail messages seeking comment on the lawsuit.
Isramco shares, which have fallen 29 percent this year, rose $3.31 to $50.49 at 10:33 a.m. New York time in Nasdaq Stock Market trading.
The case is Lapiner v. Tsuff and Isramco Inc., CA5612, Delaware Chancery Court (Wilmington).