Toby Shor and Seashore Investments v. PBF Investments, Ltd; Paul Black, BNP Holdings, Ltd; BNP Commercial Properties: AAA No. 70 198 Y 00161 19 03

After a two week arbitration hearing, we obtained an award in favor of our clients Toby Shor and the Seashore Investments Management Trust against PBF Investments, Inc, Paul Black, and a number of related entities, in a dispute involving jointly-owned oil and gas and real estate businesses. A panel of three arbitrators awarded our clients more than $31 million against Mr. Black individually, and more than $26 million against his affiliated entities.  The amounts awarded included $5 million of punitive damages against Mr. Black personally, and recovery by our clients of more than $2.5 million of attorneys fees and expenses.  The arbitrators ruled in our clients favor on all claims, including claims for breach of contract, breach of fiduciary duty, and fraud.  In addition, the arbitrators found that all claims asserted against our clients were without merit.  Mr. Black and his entities filed the arbitration and sought more $64 million in damages from our clients on their claims, but were awarded nothing.

The dispute arose out of a ten year business relationship in which our clients were investors in certain oil & gas and real estate businesses operated by Mr. Black.  By March 2008 our clients were owed millions of dollars on overdue promissory notes, and began asking questions about why they had not been paid.  When Mr. Black failed to provide answers, our clients filed a lawsuit to compel access to information.  Mr. Black responded by announcing his intention to terminate the business relationship, and resisted our client’s requests for access to information. As a result of a number of contested hearings, the parties were ordered to engage in discovery.  Then, after months of stonewalling and additional hearings, we received information showing that Mr. Black had siphoned millions of dollars from the businesses for his personal use.

In an effort to avoid further court-ordered discovery, and to cast themselves as plaintiffs, Mr. Black and his entities eventually filed the arbitration proceeding, asserted that our clients’ actions and lawsuit had destroyed the businesses, and sought more than $64 million in damages.   Our clients filed counterclaims in the arbitration for breach of contract, breach of fiduciary duty, and fraud.  The resistance to discovery continued throughout the arbitration proceeding, necessitating multiple motions to compel in that forum as well.  The case went to final hearing in June 2010.

Read the Award (PDF)