SAN FRANCISCO, May 08, 2016 (GLOBE NEWSWIRE) -- Summa Resource Holdings LLC announced today that it will continue to pursue its Dispute with Carbon Energy Limited of Brisbane, Queensland, Australia (ASX:CNX) (OTCQX:CNXAY) under the Share Sale Agreement dated February 23, 2011. Summa filed suit in U.S. Federal Court in San Francisco in November, 2015.
While the Court found there was an interest in the Court hearing the case to protect a California company from fraud, on May 6, 2016 the Court ruled to dismiss on the basis of forum non conveniens, finding it would be unduly burdensome to litigate in the Northern District of California, in part because the case could be tried more quickly in Australia. Summa has filed a Notice Of Intent to seek reconsideration of the May 6 order.
While it is disappointed in the ruling and that U.S. investors may not have their arguments heard in the U.S., Summa does seek to have the entire case heard as soon as possible and will continue to pursue all of its rights in the U.S. and Australian courts.
Summa’s claims are for $US9 million in Carbon Energy stock. Summa will further continue its fraud claims for the full value of US$19 million for the transaction, plus any and all applicable damages.
Pursuant to the Share Sale Agreement, Carbon Energy acquired project agreements for development of Underground Coal Gasification (UCG) projects in Wyoming, North Dakota and the Republic of Turkey. In each of these markets, the project partners associated with the Share Sale Agreement represented some of the largest coal owners in their respective market. In March 2013 Carbon Energy announced that it would not pay Summa the US$9,000,000 due in Milestone payments and in July, 2013 Carbon Energy confirmed it would not move forward to develop the UCG projects acquired from Summa.
The Share Sale Agreement requires Carbon Energy to reserve sufficient shares to satisfy its obligation to Summa until such time as any Dispute is resolved or otherwise settled.
Summa management remains disappointed that Carbon Energy did not pursue the projects in North America and Turkey, any of which Summa believes would have created value for Carbon Energy and its shareholders. This is particularly troubling given the newly announced prohibition on UCG in Australia.