http://www.gulfkeystone.com/ The firms exploration programme in Algeria is going well and "the shares look good value", say the Investors Chronicle. Your comments please. goal.

17:42
Re: Judge

a4tlo
9UP
The judge has told SP he wants the information tomorrow, Rex said he met one of the lemos. Brothers but can't remember. Out of court I have never SP face look so serious.

The show goes on. On a last note, when Eric said his counsel introduce ex to lemmos Bros. It was a big nail in the coffin.

18:39
Re: interesting connections

pj66
8UP
The alex guy for GC was the one i spoke of in my first court post . ( innitials embroided on his cuffs)

i'd say there connected .....

just spoke to Nige , he said the excal counsel where totally gutted and had a look of disbeleif on there faces when RW named Lemos . - TK turned up at just in time for the fireworks ..

SP was in a right 2&8

the terms of the deal sould be revealed tommorrow
------------------------------------

WTF are Lemos Bros? .... sounds like a music hall comedy duo

http://www.todayszaman.com/news-298788-.html

http://www.kyivpost.com/content/russia-and-former-soviet-union/russian-military-expert-questions-reports-on-annulment-of-42-billion-arms-deal-with-iraq-315912.html

Cynic, i heard Lemos bros were a french travelling troupe who sported moustaches during November. :)

from seebeearrgh on iii............

I've done my best, bits missing but the last 10 mins were riveting.
......mean they were too fast for me! As accurate as poss
Out of the blue
JG who's Passari, have you heard of them
RW I have, they are a co. who deal in litigation finance who are standing behind us
JG Passari is just a name, a special purpose vehicle. Who are the people you deal with when you deal with Passari.....?
RW I'm happy to write the name down on a piece of paper for the court, they are a private family office
JG P is an entity who may benefit from the claim so the court will wish to know and I certainly wish to know so its no good writing it down on a bit of paper. So who are they, it's not a matter of US security
RW no it's a meter of confidentiality so I'll ask that respect be give to that
JG no mr Wempen, if P wishes to benefit the court and defendants are entitled to know whose favour this order is being sought and the name of the SPV does not tell us anything
RW I have offered to provide the name and for some unknown reason counsel is insisting on public disclosure
JG we believe in open justice in this country except in exceptional circumstances and this hearing is being held in public
SP might I just rise, sorry to do so. There has been some correspondence between solicitors concerning the redaction of the names of the individual signatories to the various funding documents that relate to this entity
JG I want an answer to my question without interruption
.........a little tete a tete between JG and SP, too fast to note
JG I hope I don't have to show you a letter CC wrote in aug 12 which I can say without any fear of contradiction is the silliest letter a distinguished firm could have ever written and we'll get into that if we need to. What I'm interested at the moment mr Wempen is answers to my questions
Who is P, who is backing it?
RW I believe I answered and offered to share in writing and I believe that counsel just asked if names were required and I believe the answer was no the names are not required so I'm really at a loss
JG don't make an opportunistic point mr Wempen, you're a witness. I'm not asking about the signatory to the agreement but the real people behind the shareholders interest in P. you are required to answer
RW I'm afraid I don't know how I can answer if I'm told names aren't required
JG names are required, not about the signatories. Stop fencing and answer the question
RW am I supposed to write this down?
JUDGE no, you're supposed to reveal it, the identity of the real party interest behind P is of potential relevance to your claim and the court needs to know........so far nothing said that indicates to me that proceedings do not continue in public
RW then the answer is the uh lemos brothers
JG who
RW lemos bros
JG how do you spell that
RW lemos
JG who are they, what are their first names
RW they are a family in the shipping business
JG first names
RW I don't recall
JG how did you contact P
RW through counsel
JG who
RW present counsel cc
JG did they put you in touch with l b
RW yes
JG you had direct dealings with lb
RW yes through cc
JG have you met them, how many bros
RW I've met 1 there are2
JG what are their names
RW it escapes me

Few gaps and probs some mistakes
Enjoy, we all did.
Ps good work JG, I know you read some iii sometimes

there is g lemos brothers based in uk who are just shipbrokers and pretty small time too if it's the same guys .... looks to be just the 2 brothers and the company founded in 1952, and no web site (hmm!) .... bet there's more grubbiness beneath the floorboards to be revealed

but it'll be equal fun when EXC QC gets to work on the GKP boys, as they won't be squeaky clean for sure

a bit of rock n roll today for no obvious reason

Try this,


My apologies for the delay. I was going round the City offering new lamps for old, to eminent law firms...and then the pantomime horse threw a shoe outside the Last Chance Saloon in the Old Kent Road, and I had to find a blacksmith.

So. A VERY interesting day in Court. It seemed pretty obvious to me (having observed JG's style fairly closely for three weeks) that 'something was coming' at the end...lo and behold there was a sort of 'false ending'...and then when everyone was starting to put their pencils and geometry sets back into their satchels, JG 'did a Colombo'. "Oh, just one last thing Mr. Wempen, I don't really want to trouble you, but this Credit Suisse letter of 12 August 2010, the only non-privileged letter from Credit Suisse that Clifford Chance has let us see, can you please explain why it only relates to Shaikan and not all four Blocks? I'm sure it won't take you more than a minute to explain and then we can all go home"

Well, he didn't use quite those words, and do please forgive my bit of artistic licence...but then...Abracadabra...out it all came!

Where this all leads...I do not know.

I shall see what happens tomorrow, and then post some details from my notes (37 A4 pages today) a bit later.

We live, as they say, in interesting times.

"JG: Further down the email EW went on to say: Don’t accept anything with prime wait and see what the geology in Shaikan is and then we can sue as the settlement offer would be better.
Isn’t that the strategy now?
RW: I do not believe that was the case"

Great volume over 7.5million and SP at 202p

16 million traded ,UT @197p.

3 points I would like to make:-

1. Knowing who the backers are is important, as the most important man in the court has said:-


JG: Yes, if that is all. What is the nature of the deal and what share are they getting?
RW: I cannot answer that
My Lord: This is important to case.

Is my Lord thinking that this action is vexatious and that GKP may well want to counter-sue the backers if it is discovered that the purpose of the action wasn't to help the Wempens. The Wempens are just pawns in the big game to manipulate the sp to the advantage of the backers over the last 2 years or so that the case has been on-going

2. Wouldn't it be just great if TK were to bring out a mega-rns this week and you would be able to smell shorters burning all over the country.

3. I would ask FB to allow JB back on. I like reading his rubbish deramping posts! LOL!

Reuters Middle East – 10 mins ago....Email0Share0
Share0Print......LONDON, Nov 21 (Reuters) - A company suing UK-listed oil

explorer Gulf Keystone Petroleum is being funded by

hedge funds which specialise in litigation finance and two

brothers involved in shipping, a London court heard on

Wednesday.

Gulf Keystone is locked in a battle to defend its ownership

of giant oil fields in the Kurdistan region of Iraq after its

former partner, a company called Excalibur, launched legal

action claiming it is entitled to a stake of the assets.

Shares in Gulf Keystone, a stock closely watched by private

investors, closed 11 percent higher on Wednesday on speculation

that the outing of Excalibur's backers could work in the

company's favour in the lawsuit.

Private investors pack the court room on a daily basis and

post frequent messages on websites tracking the shares, hungry

for a steer on how the case will affect a stock which has soared

by 885 percent since oil was discovered in 2009.

Analysts cited private investor speculation on websites that

the disclosure of Excalibur's funders was positive for the

company as the reason for the rise in the shares.

Excalibur founder Rex Wempen said on Wednesday that his

company had received funding to help it pay for the court case

from New York hedge fund Platinum, and New York litigation

funding specialist BlackRobe, as well as Andonis and Filippos

Lemos, two brothers involved in the shipping business.

One private investor speculated that the Lemos brothers

could pull their funding for the lawsuit given that their

backing of Excalibur had now been made public.

The claimant was ordered by a London court to pay 9.5

million pounds as security for the defendants' costs before the

trial started, and questions have been asked about how

Excalibur, a small company run by Wempen and his brother which

has few financial records, accessed such sums.

Under questioning from lawyer Jonathan Gaisman, Wempen told

the court that the law firm representing him, Clifford Chance,

had introduced him to the Lemos brothers.

Gulf Keystone, which declined to comment on the rise in its

shares, has been touted as a takeover target for an oil major

looking for a foothold in the attractive Kurdistan oil province

but the legal battle is cited as an obstacle to any deal.

The company said in October that it expected the court case

to run for up to three months.

ed 21 Nov 2012 2 - 4.25pm
Michael Crane (MC) cross examining Eric Wempen (EW)
RW and 4 legals for Excal. c10-15 for GKP ( no TK) , with 30 in public seats.

[1749] re CA and possible percentage splits 80/20or 60/40 in letters to Texas.

[1751] EW says was not keeping perfect record of emails sent/received, those from Baker McKenzie days were not saved when he left.

[1753] c 25/1/06 Deed of Adherence etc. ‘Template’. Issues about direct/indirect provisions – and possibility of assignment to a Texas associate or anyone else.

[1760] Covering the requirements in the event of a licence concession being awarded. EW says he read the standard UK Offshore Operators terms (ie their pro-forma) prior to the signing of the Shaikan PSC.

C3 (P857) (P865) Long document with certain definitions included. Did percentage interest include direct or indirect ones? EW thought also included indirect ones and still thinks it now. Judge “ How can you be present holder of a licence indirectly?”. EW had convoluted exchange with Judge re ‘condition precedent’.

[1778] Email 17/1/06. RW to TK saying happy with legals but wanted to negotiate on percentage split ( subsequently agreed at 70/30).

MC ‘When did you read KRG model PSC contract?’. EW ‘I don’t know but around the time the draft Shaikan PSC appeared in cApril 2007’. EW then confirmed he was well aware of the requirements regarding signature bonus etc. MC ‘By Oct 2007 you would have known of the 30 day payment deadline?’. EW said ‘ Broadly yes’ or some similar wording.

[1782] [1784][1786][1790] [1791][1797][1810][1793][1821].All around early Feb 2006. RW accepts it quickly and unconditionally. TK says amended contract will be forwarded. RW doesn’t wait for this to arrive but signs off his copies of documents which have wording allowing TKI to assign their interest at their sole discretion.

MC to EW ‘ Did you make 1 review or 2 of the draft agreements? EW now says 2, which seems to conflict with his written evidence.

[1861] 2 Emails from RW to Margaret Berry (TKs PA) agreeing documentation signed and attached. Particular point here was that one document had a very fast turnround of c1-2 hours max between being received by RW and then returned back to TK, leaving almost no time for EW to have seen it and commented upon its contents.

H34 [9548] 24/1/08. EW Memo to self re how to describe for Excal taxation purposes a possible deal involving sale of Excal’s interest for $0.5m plus a further $0.5m on finding oil. MC points out that EW includes these words in his memo ‘Excal never owned an interest in the Shaikan PSC’. MC now says ‘A proposition with which I respectfully agree!’ MC ‘Why not pay tax on a sale?’ EW waffled unconvincingly. ( Was he hoist with his own petard, I wonder?).

Break 3.25 – 3.35

c Apr 2007 EW refused permission for TKI to assign its interest.

[ 6760][6768]c 9 Oct 2007 Steve Goda to RW. Re draft Shaikan PSC and requesting RW’s response and comments by 15/10/07. MC ‘ This contained some material adverse changes from the model draft ( eg A right for KRG to bring in a 3rd party contractor as a partner for 20-25 per cent, and a cost of $4m for each of 2 wells to be drilled). EW “ I was not really concerned as ‘ no skin off Excal’s back’ as Excal’s interest was indirect”.

[6734.4 etc] EW aware of signature bonus payment obligations but didn’t focus on whether the payment dealine was ‘hard’ or ‘soft’.

[6764]. Involving a Mr ?Jull? who files Excals tax returns. MC ‘No profit for Excal that year?’ EW ‘Correct’. MC ‘Did Excal ever make a taxable profit?’. EW ‘Yes, in 2004’. This arose principally from RW special forces projects where ‘temporary contracts’ for c100 personnel were involved and they were perhaps creatively described as Excal employees. EW confirmed there were no recent tax returns for Excal because no taxable profits had been made and that Excal had no business dealings since 2008 apart from the current litigation. EW said they were effectively ’Zero Returns’.

Judge asked re future timetable.

MC said 2 more days for EW, finishing by c Tues lunchtime 27 Nov, with JG cross examing EW on Tues afternoon. Judge suggested Wed am 28 Nov for the ( private ) disclosure discussions re Excal Funders’ percentages etc and also some issues about costs and requested a ‘skeleton’ be given to him beforehand.

QCs raised issue about starting date for Jan 2013 term and whether it would be Mon 14 or Mon 21? Judge wants expert witnesses’ availability schedules to be canvassed prior to a decision on this being made next week.

Judge then wished all those heading back to USA ‘A good celebration of deliverance from colonial power!’

Close 4.25

">

C&P'D,


An interesting post from iii which makes some good points imo. It's longish, but the main point is that any SPV set up to finance litigation will likely only be liable for the sum of its assets as far as costs or any other awards are concerned.

If I were the judge/defense barrister that would raise a huge red flag for me, and I wonder if that's the reason he has requested a skeleton costs briefing.

Using a shiny new limited liability entity financed by several wealthy parties to litigate against a PLC based on the claims of a penniless 'brass plate' has to raise serious questions imo.

Admittedly the SPV could receive more capital from the shareholders in the event that it gets short of cash, but by its nature it could also simply fold should the case go against it.

Under the circumstances (and given that the case has already caused a stir in legal circles when J.Gloster ruled against US arbitration & for judgement in England) I can't help thinking that this case might eventually go a lot further and end up as a precedent that leads to the tighter regulation of TPLF in commercial cases. After all, we're looking here at a situation where -financially speaking- the plaintiff says, 'heads I win, tails you lose'.

---------------------------------------------------------------------------
Also,
http://www.theatlantic.com/national/archive/2012/07/why-are-hedge-funds-allowed-to-invest-in-litigation/259345/ Great article on hedge fund investors in litigation and how it leads to abuses..

if i remember correctly, EXCAL were obliged to deposit a very considerable sum ($9.5m comes to mind) into court before proceedings even started ...... it MAY BE that the judge is contemplating asking for further funds to be deposited if the case is to be allowed to continue - i assume that is legally permitted

Excal complauned about the sizw of the defence,resulting in a meeting to discuss.Added a further link to previous post,ref to abuse.

From dizzylizzie2,well worth reading.


The backers are important not for the facts and evidence as they exit and subsequently presented to court but is crucial in understanding the purpose of proceeding with the CC in light of the failed attempt at US abritration, mareva injunction and the damning comments by Jus. Glouster.
If you are in pursuit of justice then reading the Justice's comment especially about chancers would make it clear to you where the truth lies. Exc, based on the evidence supplied to court, has not one single document/agreement that supports their claim. (Prime came that conclusion earlier on). They have a collboration agreement with TKI which itself did not entitle them to anything but dictated/agreed terms upon which a new venture would operate should the parties to the agreement go on to secure a PSC as part of a consortium. That venture would be a 50:50 partnership. (of course they never went on to secure a PSC together which makes the agreement worthless). It also gave TKI the right to assign the underlying asset to any third party of it's choice and RW did sign the first draft of the JOA with this clause prominent in there.(There was a 2nd draft but poor ole Rexy couldn't wait so quickly sign the 1st). Indeed, it's this point that TKI barrister is putting to Eric as he is a trained lawyer and testified to the effect that he is used to dealing with long, complex legal documents.
Eric's defense is that he knew this clause was there but he didn't think it mattered as Exc did not have a direct interest but an indirect one. When asked to explain this indirect interest Eric says it was based on a 'condition precedent'. (Maybe lawyers amongst us can explain but the legal minds in court didn't including the judge) At this point My Lord intervened for a good few minutes asking Eric 'How can you own something indirectly?' and to explain what he meant by condition precedent but, in my view, none present including the judge was any wiser so all moved on. This is very, very important but not discussed much on the BBs. When added to His Lordship request for a skeleton of costs one gets the feeling he's heard enough and need to protect GKP from incurring overrun costs being that deposited cash might soon run out and the SPV will not be liable.
That bring be back to my original point as to why the outing of the backers is important.
1. RW did everything not to name them and for a brief minute or so there was utter silence before he eventually came out with it. SP tried his best with the judge to prevent RW from answering the question. It follows then that the backers did not want to be named so this cannot be about specialist litigants as they carry on a legitimate business.
2. If the name of the backers is known then it makes investigation into share price manipulation easier. You can tract also the bashers on bulletin boards to see if they had any connection with these funds
3. They will loose credibility amongst their peers and possibily the press for making such a big cock up. Would you want to invest in their funds in future with such poor DD record and immoral if not crimal practice? (ie fund the case and short the sp so either way we win)
4. The fact that we found out in court that the backers are funding through an SPV is more important than many think. Why? The judge is now very alert as to the strategy here imv to frustrate GKP into settlement! I suspect he will have none of it and ask them to deposit more cash as it will be impossible to sue the SPV that is a shell. Will they pay up? I'm sure the GKP/TKI team is very expensive as they need a lot of time pre trial and during trial to properly defend the case.

Where does all this leaves us...shareholders. Will the FSA/LSE/SFO investigate? The broadsheets keep refering to - GKP beloved and followed by PI. Is that the reason why the establishment cannot be bothered? Don't want to jump the gun but when this is over we should put pressure on the powers that be to investigate the trading of GKP shares including those huge shorts just before the CC began. Was that down to 'delta' hedging? IMV, no and that was my opinion at the time. The bonds were oversubscriped and underpinned by the oil in the ground as they can be converted to equity so no need to short the entire portfolio 1 for 1. It just wouldn't make sense and had the potential to make more losses than profits