Narrative
Full Description
Project narrative
On November 25, 2013, ICBC (London) PLC entered into a $20 million USD bridge loan agreement (BLA) with Blacksands Alpha Blue, LLC — a United States-incorporated subsidiary of The Blacksands Pacific Group, Inc., a Delaware-incorporated oil and gas corporation based in Los Angeles, California — for unspecified purposes. This loan carried a maturity period of 90 days and an interest rate LIBOR plus a margin of 9.95%. Blacksands Pacific Group issued an absolute and unconditional guarantee for this loan and would be "immediately be liable" if Alpha Blue did not repay in full and included a higher interest rate in the event of a default. Record ID#106224 captures the original loan. Alpha Blue drew $5 million USD under the $20 million USD loan. Neither Alpha Blue or Blacksands as guarantor repaid the amount when upon maturity in February 2014. ICBC extended the maturity period, first by 36 days — to March 31, 2014 — for a new maturity period of 0.345 years. Record ID#106225 captures this extension. Upon the borrower's failure to repay in March, ICBC (allegedly) issued a notice of default of Blacksands in April 2014, but then extended the maturity period by 122 days — to July 31, 2014 — for a new maturity period of 0.679 years. Record ID#106226 captures this extension. ICBC continued to capture interest repayments throughout the extension. Blacksands did not repay the loan on July 31, 2014, causing ICBC to issue another notice of default to Blacksands on August 21, 2014. On December 8, 2014, ICBC filed a lawsuit against Blacksands in the Supreme Court of New York, New York County, to recover principal and interest allegedly owed by Blacksands under the BLA. On January 7, 2015, Blacksands removed the case to the United States District Court Southern District of New York and on February 6, 2015, Blacksands and Alpha Sands counterclaimed against ICBC, asserting claims for breach of contract, promissory estoppel, unjust enrichment, and fraudulent misrepresentation. ICBC sought a motion for summary judgment for the $5 million USD outstanding principal of the BLA, plus accrued interest and attorneys fees, and motion to dismiss all of the counterclaims. Blacksands alleged that it should have been relieved of its obligations under the BLA because the BLA was only one part of a larger financial arrangement between Alpha Blue and ICBC; Blacksands alleged that the BLA was to serve as a 90-day bridge loan, the principal of which would roll over into a five-year, $70 million USD Revolving Credit Facility from ICBC (Record ID#106227) to be used as part of a larger, $500 million USD capital structure that would fund Blacksands' acquisition of an oil field in California; Blacksands argued it would was not obligated to repay the bridge loan because ICBC and Blacksands both understood that the principal would roll over into the RCF by the BLA's maturity date and the BLA's interest rate of LIBOR plus 9.95% would be supplanted by the RCF's rate of LIBOR plus 4.5%. Blacksands argued that ICBC created a binding contract to obligating ICBC to provide the RCF because of an unsigned November 2013 term sheet; a November 15, 2013 email exchange between ICBC and its counsel seeking an estimate to draft the BLA and a potential RCF; and a November 26, 2013 conference call during which, Blacksands alleges, that ICBC confirmed it would issue the RCF. Blacksands alleged that ICBC's "promise" caused it to forgo loan opportunities to acquire the California oil field in the first half of 2014. Blacksands alleged that part of the motive for ICBC not issuing the RCF was that when ICBC learned in February 2014 that another party, Goldleaf Jewelry (a Chinese-owned company) was interested in purchasing the same California oil field that Blacksands intended to purchase. Blacksands and Alpha Blue also claimed Alpha Blue's continued interest payments at LIBOR plus a margin of 9.95% unjustly enriched it over the proposed RCF's LIBOR plus a margin of 4.5%. Blacksands further argued that ICBC agreed to waive interest payments and extend Alpha Blue's time to repay the Bridge Loan until after Alpha Blue and Blacksands developed and obtained funds from a new capital financing structure for the acquisition of the oil field in a telephone call. On September 29, 2015, Judge Lewis Kaplan granted ICBC's motion for summary judgment against defendant The Blacksands Pacific Group, Inc. in all respects, giving it judgment against defendant for the principal sum of $5 million USD together with accrued interest, attorneys fees in accordance with the contract, and costs and that ICBC's motion to dismiss the counterclaim be granted. On September 26, 2016, the United States Court of Appeals for the Second Circuit affirmed the district court's judgement. ICBC allegedly engaged in settlement discussion with Blacksands which ultimately resulted in a draft settlement agreement and arrangement for $6.5 million USD to be placed in escrow account to satisfy the settlement arrangement. ICBC conducted post-judgement discovery requests that Blacksands resisted, causing ICBC to move for contempt and coercive sanctions against Blacksands, with on October 24, 2016, Judge Kaplan granting ICBC's motion to hold them in contempt. Then on December 7, 2016, ICBC moved for civil contempt against the chief executive officer of Blacksands, Raheem J. Brennerman personally, which he was held in contempt on December 13, 2016. Kaplan then recommended Brennerman for criminal prosecution. Activists claimed that Raheem Brennerman, Blacksands' chief executive officer, was being targeted by Judge Kaplan for prosecution, allegedly that Brennerman had to be prosecuted criminally and setting the motion for him to be arrested on April 17, 2017 and was indicted for fraud (wrongly, according to activists, because negotiations had taken place in London for the loans).