Clarke-Mobile Counties Gas District Settles Claims

posted on:
December 16, 2007

author:
Staff

category:
Fraud

Beasley Allen, along with the firm of McCorquodale & McCorquodale, which is located in Jackson, Alabama, represented Clarke-Mobile Counties Gas District in a lawsuit against the following companies: Union Gas; Prior Energy Corporation; and ICC Industries; Our firm is pleased to have recently settled all of the claims brought on behalf of the Gas District, which is a local gas district. 

The district’s Board consists of the Mayors of the two cities in Clarke County, Alabama; namely, Jackson and Thomasville, along with the town of Grove Hill. This case has been in the courts for many years and involved allegations of mismanagement and fraud.

In approximately 1994, the Board of the Gas District was not getting what it believed were proper answers to questions about management of the gas district by a company called Union Gas. At that time, the Gas District hired the McCorquodale law firm to investigate what was going on. After the investigation was completed, a lawsuit, which included counts for fraudulent suppression, conspiracy and breach of contract, was filed.

Union Gas ultimately cancelled the contract they had to manage the Gas District. What we did not know, and what wound up being a major basis for the lawsuit, was that Union Gas had a secret deal with a company known as Prior Energy Corporation, which was owned by ICC Industries, Inc.

That company was attempting to buy Union Gas and the contract that Union Gas had with the Gas District increased the value of Union Gas tremendously. We are confident it would have been proved that during the time in question Prior Energy was actually managing the Gas District. Prior Energy directed an employee as to what to do while at the same time selling gas to the Gas District.

That was a clear conflict of interest. We alleged that a conspiracy existed between ICC, Prior Energy and Union Gas to defraud the Gas District by taking over it’s operations. The lawsuit ultimately stopped the purchase of Union Gas by Prior Energy.

The case was resolved by having the defendants pay $1.5 million to the Gas District and having them forgive a disputed judgment over gas the defendants had sold the Gas District during the time the conflict of interest was in existence. We were pleased that our client, the Gas District, was able to resolve this dispute short of a trial.

This was a good settlement for our client and their customers. Rhon Jones and Mac McCorquodale handled this case for the Gas District and did a very good job. Mac, did excellent work on this case and we enjoyed working with him on this most interesting case.

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