By Laurel Brubaker Calkins – Aug 26, 2011 12:01 AM ET
A Superior Offshore International Inc. bankruptcy committee accused four former managers in a lawsuit of taking millions of dollars from IPO proceeds while the company was short of cash.
Superior, which provided subsea construction and commercial diving services to the energy industry, ceased operations and filed for bankruptcy in 2008, a year after its initial public offering. The bankruptcy committee accuses the managers of diverting proceeds from the IPO, leaving the company with $17.9 million in working capital and not the $45 million it needed to stay afloat, according to the complaint filed yesterday in federal court in Houston.
“The defendants, however, did not fare so bad,” the Post- Confirmation Equity Committee said in the filing. “In total, they walked away with nearly $75 million from sales of Superior stock.”
The defendants in the complaint are Louis E. Schaefer Jr., founder and former chairman; James J. Mermis, who was president and chief executive officer; R. Joshua Koch Jr., the former executive vice president, general counsel and secretary; and Roger D. Burks, the ex-chief financial officer. Each lives in the Houston area and left the company before it collapsed.
The defendants filed a joint request yesterday for the committee’s lawsuit, which was filed on behalf of the company, to be thrown out. The managers already have “each defended and settled adversary proceedings” brought by Superior’s plan agent and a shareholders’ securities class action, their lawyers said.
‘Another Bite’
“Those proceedings all made the same or similar claims,” the managers said in their filing. The new lawsuit “seeks to take another bite at the apple,” they said.
In one internal e-mail cited in the committee’s complaint, Burks asked Schaefer not to take $25 million in proceeds from the Lafayette, Louisiana-based company’s IPO. Schaefer refused, according to the complaint. That “reflects that the defendants were grossly negligent in authorizing Schaefer, Mermis and Koch to loot Superior in the IPO,” the committee said in the complaint.
Tony Visage, who represents Schaefer and Koch, said in an e-mail that the defendants deny the allegations in the complaint.
Michael Biles, lawyer for Mermis and Burks, didn’t immediately respond to an e-mail seeking comment after regular business hours yesterday.
The case is Superior Offshore International Inc. v. Schaefer, 4:11-cv-03130, U.S. District Court, Southern District of Texas (Houston). The bankruptcy case is In Re Superior Offshore International Inc., 08-32590, U.S. Bankruptcy Court, Southern District of Texas (Houston).
To contact the reporter on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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