Aspen meetings central to investor’s suit against prominent businessman
Meetings in Aspen are cited as a key events in an investor’s multi-million-dollar lawsuit against businessman Charif Souki, the owner of numerous local properties who accumulated a fortune in the natural gas industry.
Investor Christopher Parker of Los Angeles and his company Red Mango Enterprises sued Souki individually in federal court. The lawsuit claimed Souki fraudulently induced Parker to hold onto his shares in Houston-based Tellurian Inc. — when their value was tanking — by promising to indemnify him for his losses.
“But Souki was lying, and never planned to fulfill his promise,” said the suit.
Souki could not be reached on his publicly listed phone and the New York-based law firm that filed the suit, Boies Schiller Flexner LLP, did not respond to messages seeking comment this week.
Souki has until March 22 to formally respond to the complaint, according to court records. As of Wednesday, there had been no entrance of an appearance by an attorney representing Souki in his defense.
At the time of the suit’s Jan. 20 filing, Parker owned 3.3 million shares and Red Mango had 8 million shares in Tellurian, according to the complaint. Tellurian is a Houston-based natural gas company that Souki co-founded with Martin Houston in 2016.
Parker and Red Mango began “investing millions of dollars” in Tellurian in 2017 after meeting with Souki in Aspen, said the suit.
“Several years ago, Parker became interested in learning more about Tellurian after a friend, whose wife sits on Tellurian’s board, mentioned that he should take a look at the company,” the suit said. “Parker’s friend mentioned that Tellurian would be a good investment over the next few years since it would be undertaking a new project. With his interest piqued, Parker flew to Aspen, Colorado to meet with Souki — the co-founder of Tellurian — and learn more about the company. The two enjoyed a few social dinners together and began a positive working relationship.”
Yet Parker began to lose confidence in Tellurian when its share prices, once as high as $20.47 in 2017, fell to just over $5 in August 2019. In the summer of 2019, Parker told Souki he planned to sell his shares. Souki, however, vowed to indemnify Parker for his losses through the end of 2020, an agreement captured on text messages the two exchanged, according to the complaint.
By early 2020, the share price lost about 90% of its value within two months and was trading for less than $1 that March, with Souki’s bank forcing him to unload 10 million shares while Parker, on behalf of himself and Red Mango, held onto the shares, the suit said.
Again, Parker contacted Souki about selling his shares, this time in December 2020.
“Instead, Souki again attempted to delay Parker from going through with the sale and asked Parker to extend their agreement through the end of 2021,” said the suit. “Parker, on behalf of himself and Red Mango, met with Souki in person in Aspen, Colorado in February 2021 to discuss extending the agreement.”
The two established a written agreement good through Dec. 31, 2021, but Souki refused to sign it, “stating that he could not execute such an agreement in writing because he had taken bank loans and had not disclosed his liability to Parker and Red Mango to his bank,” the suit said. “Because Parker and Souki had a long history, Parker accepted Souki’s explanation and agreed not to sell his or Red Mango’s shares throughout 2021 in exchange for the revised terms.”
The stock continued to under perform last year, according to the suit.
“Throughout 2021, Tellurian’s share price remained low,” the suit said. “As of October 2021, the share price hovered just above $3 per share. Therefore, Parker informed Souki that he needed to close out his position and that Souki had to cover his losses pursuant to their agreement.”
Souki, however, refused to uphold his end of the deal, the suit said.
“As a result of holding their Tellurian shares in reliance on Souki’s promises, Parker and Red Mango sustained tens of millions of dollars in losses,” the suit said.
The complaint was filed in the U.S. District Court for the District of Colorado in Denver. The Aspen meetings between Parker and Souki make Colorado federal court the proper venue for the suit, the complaint said.
“Among other things, and as set forth more fully below, relevant meetings between the parties took place in Aspen, Colorado. Further, on information and belief, Souki was present in this District when he sent relevant communications, including text messages, to Parker,” the suit said.
The suit’s claims include breach of contract, fraudulent inducement and unjust enrichment.
Souki bought Aspen Valley Ranch for $27 million in 2013, later developing the 800-plus acres of land with luxury residences. In May 2020 he announced it was listed for sale with an asking price of $220 million. Souki also opened Mezzaluna restaurants in Los Angeles and Aspen (which he no longer owns), and owns various commercial properties in downtown Aspen.
Souki also “in 1996 co-founded Cheniere Energy Inc., the first company to take the fruits of fracking and export them to global markets from the U.S. Gulf Coast — in the form of liquefied natural gas, or LNG,” the Wall Street Journal reported Dec. 21.