Text messages don’t make a contract, Souki lawyers argue

An exchange of text messages does not constitute a contractual agreement, argued attorneys for Charif Souki in his motion to dismiss a shareholder’s lawsuit alleging civil fraud, breach of contract and other counts against the Aspen developer and property owner.

Souki, who opened Mezzaluna restaurants in Los Angeles and Aspen (which he no longer owns), also is the co-founder and chairman of Houston-based and publicly traded energy company Tellurian Inc.

Tellurian shareholder Christopher Parker of Los Angeles and his company Red Mango Enterprises took Souki to court Jan. 20, suing him for allegedly inducing Parker to not sell his or Red Mango’s Tellurian shares by promising to indemnify them for the losses. Souki didn’t honor the agreement, the suit alleged.

The stock’s value plummeted from $20.47 in 2017 to just over $5 in August 2019, then tumbled to under $1 in August 2021 before hitting the $3 mark that October, according to the suit. Parker and Red Mango began investing in Tellurian in 2017, the suit said.

During the summer of 2019, Parker indicated to Souki he planned to sell both his and Red Mango’s respective 3.3 million shares and 8 million shares, the complaint said. Convincing him not to sell, Souki said he would indemnify Parker for his losses through the end of 2020, said the suit, referencing text messages between Souki and Parker as proof of the pact. Those texts were exchanged on Aug. 19, 2019.

Souki’s attorneys, however, offered a different version of the dealings between Souki and Parker. A March 22-dated motion to dismiss the lawsuit, which was filed in U.S. District Court in Denver, called both Parker and Souki “experienced” and “sophisticated businessmen” who wouldn’t hatch a financial agreement through text messages.

“Parker and Souki know how to create legally binding contractual relationships,” the motion said. “That is particularly true of a contract potentially involving tens of millions of dollars, like the one alleged here. Sophisticated businessmen do not create valid, enforceable contracts through unsigned text messages that omit essential terms such as the identity of the parties, the nature and extent of the obligation, the method of payment, and who is to benefit from performance.”

The text messages alone showed that Parker doesn’t have a case for breach of contract, the motion said. Parker’s lawsuit cited the following text exchange from August 2019 as the written agreement between the two:

Souki to Parker: “How much stock do you have and what is your (cost) basis?”

Parker: “5.5m shares and (his) net is circa 8(.)30 now.”

Souki: “Ok. Please keep this text. I will guaranty your capital by dec. 2020. I’ll make up any deficiency you have at that date. Thanks for your help and confidence.”

Parker: “Ok pal I got confidence in you, always here to lend an ear or advice if needed, let’s catch up in sept for dinner.”

The motion to dismiss said the exchange didn’t meet the standards for a contractual agreement, while Red Mango, for which there is scant information available, wasn’t mentioned in the texts.

“There is no discussion in these messages of Parker selling or potentially selling his Tellurian stock; there is no request by Souki that Parker not sell his stock; and there is no promise by Parker not to sell his shares,” the motion said. “Nor do the messages contain a specific amount owed, the number of shares attributable to Red Mango, or specify what Parker paid for his own shares.”

Parker and Souki met over a meal in Aspen to discuss extending the alleged agreement through the end of 2021, the suit said.

“The two established a written agreement good through Dec. 31, 2021, but Souki refused to sign it,” said the lawsuit, “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. 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 motion countered that the Aspen meeting did not constitute a binding agreement, and Parker proved it by asking Souki later in 2021 to “fix a firm date to close out the guarantee.”

“Thus, through their own Complaint, Plaintiffs acknowledge that Souki had not agreed to an extension to December 31, 2021 date — or any other contract term — as they now claim,” said the motion, which also called for the dismissal of Parker’s claims of fraudulent inducement, promissory estoppel and unjust enrichment.

Attorneys with Boies Schiller Flexner LLP, a New York firm representing Parker and Red Mango in the lawsuit, as well as attorneys with Houston firm Yetter Coleman LLP and Wheeler Trigg O’Donnell LLP in Denver, which are handling Souki’s defense, were contacted about this story Tuesday. Parker’s legal team did not respond and Souki’s attorney responded but said they preferred not to comment.

The motion to dismiss said the lawsuit claimed Souki “is domiciled and resides in Aspen, Colorado, a fact that Souki denies, but accepts as true for purposes of this Motion only.” Souki’s full-time residence is in Houston, the motion said.

Souki owns commercial properties in downtown Aspen and acquired Aspen Valley Ranch for $27 million in 2013 and developed the 800-plus acres of land with luxury residences. He is credited for being a pioneer in the exportation of liquefied natural gas, which is produced through hydraulic fracturing, or “fracking.”

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.

Shares in Tellurian, meanwhile, closed at $6.01 on Tuesday.