Tag Archives: Lawsuit

McDermott settles with TechnipFMC over COO trade secrets

Photo: Nandu Chitnis

McDermott and Samik Mukherjee have settled with TechnipFMC right before a jury was due to be sworn in Harris County. Terms of the settlement have not been disclosed.

[UPDATE 04-29-19 In its 10-Q McDermott states a settlement has been reached and a confidential amount has been paid to TechnipFMC. In the court documents Mr Mukherjee acknowledges that he retained TechnipFMC’s confidential information and/or trade secrets]

Back in July 2018, Samik Mukherjee resigned from TechnipFMC, where he was the VP of Corporate Development & Strategy, to join McDermott International as its new COO.

Within days, TechnipFMC sued, alleging that Mr Mukherjee stole trade secrets. The court issued a temporary injunction against Mr Mukherjee in which he was prohibited from working for McDermott on bids or projects that Technip were working on and other business development activities. That injunction was still in effect.

Technip was seeking $200 million in compensatory damages, plus punitive damages.

Mistrial declared initially

There was some drama in the court room when the judge declared a mistrial on April 5 before the jury had been sworn in. It’s hard to tell what happened from just the court documents. It appears that, as the lawyers were questioning potential jurors to whittle them down to 12, the judge must have objected to some lines of questioning. The judge then issued an ‘Order in Limine’ which is basically a list of topics or issues that can’t be raised in the court case because they are considered hearsay or irrelevant. After that, she declared a mistrial.

The case was settled Monday 8 April right before a new jury was to be sworn in. The court hasn’t yet received the final settlement agreement and therefore hasn’t formally closed the case. It is unlikely that the settlement agreement will be made public. If details become public, I will post them here.

McDermott CEO received a subpoena

The settlement also avoids potential embarrassment for McDermott CEO David Dickson (who is a former employee of TechnipFMC). He received a subpoena on the Thursday April 4 to appear as a witness in the trial. Steve Allen, VP of HR for McDermott also received a subpoena.

TechnipFMC v Mukherjee docket

Weatherford sues Russian-owned company over alleged theft of trade secrets

Weatherford RCD device

[UPDATE: The parties settled the case on 18 February 2020. No details of the settlement were made public].

Weatherford International has sued Frontier MWD Systems over the alleged theft of trade secrets. Frontier, based in NW Houston, is a US subsidiary of NewTech Services, an oilfield services company with its head office in Moscow, Russia.

NewTech was formed in 2009 and has 1,300 employees. It mainly operates in Russian and countries of the former Soviet Union. It has manufacturing operations in Russia, Great Britain and the USA.

Weatherford market leader in RCD systems

Weatherford has also sued four of its former employees who were ‘poached’ by Frontier. The technology involved is in managed pressure drilling and, in particular, rotating control devices (RCD) to contain and divert fluid returns and enable wellbore pressure management.

Weatherford is a market leader in RCD systems and its housing assembly and bearing (which sits in the housing assembly) are based on the company’s trade secrets and proprietary information (such as dimensions, tolerances, seals etc.).

Frontier poaches employees from Weatherford

Frontier, which did not offer an RCD bearing system, hired from Weatherford;

  • Earl Dietrich, the Global Director of Deepwater Systems, in June 2018.
  • Ian Knight, Service Delivery Manager, in July 2018
  • JJ Leal, RCD Engineering Manager, in November 2018
  • Shannon McLeod, RCD Salesperson, in March 2019

On March 25, 2019, Dietrich and Frontier began marketing a new product, an RCD bearing, that is compatible with Weatherford RCD housing assemblies.

Weatherford alleges that, for Frontier to develop such a product in less than a year, it must have used Weatherford’s trade secret information, including designs, drawings and engineering specifications.

Temporary Restraining Order

Weatherford filed a lawsuit in Harris County on April 9, 2019 against Frontier and the four ex-employees. The following day it was granted a temporary restraining order that ordered;

  • Dietrich, Knight, Leal & McLeod be prohibited from using any trade secret or proprietary information belonging to Weatherford.
  • The four to return all Weatherford documents and/or electronic storage devices within 7 days.
  • The four to respond to the plaintiffs’ request for Expedited Discovery.
  • All parties to appear for depositions prior to the next hearing.

The next hearing will be held May 9, 2019.

Weatherford v Earl Dietrich

McDermott and TechnipFMC set for trial over COO

[UPDATE 04-05-19 Mistrial declared – before the Jury was sworn in].

Back in July 2018, Samik Mukherjee resigned from TechnipFMC, where he was the VP of Corporate Development & Strategy, to join McDermott International as its new COO.

Within days, TechnipFMC sued alleging that Mr Mukherjee stole trade secrets. The court issued a temporary injunction against Mr Mukherjee in which he was prohibited from working for McDermott on bids or projects that Technip were working on and other business development activities. That injunction is still in effect.

Technip is seeking $200 million in compensatory damages, plus punitive damages.

The two parties are currently scheduled for trial April 1 in Harris County. There is a good chance of it being delayed for six months. One issue has been a late change of trial judge assigned to the case. The original judge had to back out for health reasons.

The lawyers for McDermott have been arguing that Technip has been slow to respond to their requests and to make their expert witnesses available for deposition. The lawyers are arguing much work remains in the discovery stage.

So far, at least six McDermott executives and board members have been deposed, including CEO David Dickson (who used to work for Technip).

Much of the evidence submitted to the court is confidential and under seal. This primarily relates to Technip’s allegations regarding contracts with Reliant and ONGC in India. Mr Mukherjee allegedly disclosed the terms of Technip’s bid to ONGC to McDermott five months before he joined them.

On Monday, the judge will hear five summary judgement motions from both sides.  Assuming the case continues, the trial is expected to last four weeks.

[UPDATE: 04/02/19 – The two summary judgement motions brought by McDermott have been dismissed]

Cheniere sues former CEO and founder


Sabine Pass – Roy Luck

Cheniere has sued its former CEO and co-founder, Charif Souki, for conspiring to work with a friend, Martin Houston, to set up a competitor, Tellurian, while still employed at Cheniere. The suit was filed in Harris County. It alleges breach of fiduciary duty, fraudulent transfer, and tortious interference with Cheniere’s collateral rights.

Cheniere and Tellurian are both based in downtown Houston.

History of Cheniere

Cheniere originally started in 1996 as a natural gas driller. In 2004, it switched strategies and began to build a Liquified Natural Gas (LNG) terminal to import natural gas. The facility opened in 2008 just prior to a fracking boom that caused a glut of natural gas in the US. In 2010, the company decided to convert the terminal to export natural gas instead. The company then spent $18 billion on the facility in Sabine Pass, Louisiana. The first train become operational in May 2016.

After 21 years, the company made a profit for the first time in 2017. It now has a market capitalization of nearly $17 billion.

Souki $142 million compensation 

Souki served as the CEO of Cheniere from 2002 to 2015. He became infamous in 2013 for earning $142 million in total compensation (due to $133 million in stock awards). In August 2015, activist investor Carl Icahn took an 8% stake and won two board seats as he felt the stock was undervalued because Souki wanted to expand Cheniere into other areas of the energy business rather than concentrate on completing the LNG trains at Sabine Pass.

The board voted to replace Souki as CEO on December 12, 2015. Souki eventually resigned as a director in February 2016.

Friendship with Martin Houston

Charif Souki first started working with Martin Houston when the latter was the COO of BG Group plc. Back in 2011, BG became the first customer of the export terminal when it signed a 20-year LNG sale and purchase agreement with Cheniere.

In January 2014 Houston left BG and formed Parallax Enterprises. He approached Souki in mid-2014 about jointly pursuing mid-scale liquefaction projects. In December 2014, Souki gave another Houston-controlled company a consulting contract worth $100,000 a month.

At Souki’s direction, Cheniere commenced negotiations with Parallax regarding a potential arrangement for joint development of two liquefaction plants in Louisiana. Cheniere loaned Parallax $46 million through short-term secured loan notes. The money was lent before Cheniere and Parallax had agreed and signed a letter of intent.

The loan note became due on December 11, 2015, the day before Mr Souki was fired. It’s not clear from the lawsuit if this was a major factor in his firing. Parallax has still not repaid any monies to Cheniere.

Allegations in the lawsuit

Two weeks after Mr Souki was fired and while he was still employed as a director, Houston formed a new entity that, Cheniere alleges Mr Souki agreed to invest in. Two weeks after he left as a director, Souki and Houston announced the formation of Tellurian in February 2016. The company is building one of the two liquefaction plants mentioned above.

Tellurian was initially in the same office space as Parallax. The lawsuit also alleges that Tellurian took over Parallax’s server, thereby gaining access to all the work performed on the liquefaction projects, developed using the $46 million that Cheniere had lent.

Another allegation in the lawsuit is Tellurian raised more than $250 million in private placements using work performed at Parallax and funded by Cheniere.

Tellurian went public in March 2017 through a reverse takeover. It has a market capitalization of $2.4 billion.

Cheniere Souki lawsuit