SPPC is asking that the “fraudulent” loan be declared null and void.
Guam – South Pacific Petroleum Corporation, the company that operates the 76 gas station chain on Guam, is now suing its former executive management for taking out a multimillion dollar loan against the company without consent.
This lawsuit comes a few years after SPPC and the former company directors settled with major lenders for defaulting on other multimillion dollar loans as well.
The 40-page, 23 count lawsuit was filed against 10 individuals and three companies. The named defendants are Brian Suhr, former President of SPPC; Michael E. Hahm, SPPC’s former COO; Woo Jong Kim; Gi Tae Kim; former Comptroller Roberto Dalalo; Soon Ja Choi; Terry C. Lee; Jaeha Shin; Byong Sik Soh; Chang Rok Soh; Paradise Fund LP; MB Guam Incorporated; and Yoongki Industry.
The charges allege conspiracy, fraud, RICO and TORT claims, aiding and abetting, and breach of fiduciary duty, among others. The defendants are accused of conspiring with each other to take out a $3 million loan against SPPC without consent and despite knowledge that the petroleum company was prohibited from taking out such loans because of an outstanding loan with another lender.
In fact, SPPC says in the lawsuit that some of the defendants in this case, namely Suhr, Hahm, Gi Tae Kim and Woo Jong Kim, had previously committed similar fraudulent schemes—taking out multimillion dollar loans with Korean banks against SPPC without approval and with full knowledge that doing so could ruin the company. That case was finally resolved with a settlement agreement.
But now SPPC says it turns out there was yet another fraudulent loan out there they weren’t aware of. The defendants in this case, SPPC says, “misrepresented material facts regarding the purported loan transaction and otherwise deceived other SPPC fiduciaries, in furtherance of the scheme to fraudulently procure the purported SPPC loan transaction for the sole benefit of and use by MB Guam and/or Paradise LP.”
Further, SPPC says, the defendants, “knew or should have known that SPPC would be incapable of performing under the purported loan without resulting in financial ruin to SPPC.”
The only intended beneficiary of this loan, the lawsuit states, were the defendants and the corporations they set up to receive the loan. SPPC received no actual benefit from the $3 million loan and instead was exposed to extreme financial risk and ruin, unreasonable liability and repayment terms.
SPPC is asking that the $3 million loan be declared null and void and unenforceable. They are also seeking a permanent injunction and an award for damages. An amount was not specified.