Pricing, settlement, payment and other disputes under forward contracts, swaps, options, and other physical and financial contracts:
- We represented PJM Interconnection in a federal court case against Tower Research Capital, a financial services firm. Tower defaulted on a payment due in the PJM “financial transmission rights” market. PJM sued. After a jury trial started and we examined the first two witnesses, Tower settled favorably to PJM.
- We represented Mirant and its affiliates (now, E.on) in a slew of litigation before and during their Chapter 11 bankruptcy proceedings. For example, under the safe harbor provisions of the Bankruptcy Code, counterparties that are “in the money” on forward contracts when a company files a bankruptcy petition have the option to terminate the agreements and collect their “winnings.” We successfully resolved over a dozen of these disputes, including through multiple adversary proceedings.
Power Purchase Agreement Disputes
- We obtained a seven-figure judgment for Constellation for breach of a long-term power purchase agreement in disputes arising from the implementation of locational marginal pricing in New England.
- We successfully represented a retail electricity supplier in multiple arbitration and other disputes with commercial and industrial customers over power purchase agreements. For example, we obtained an arbitration award denying a commercial customer’s claim for purported overcharges and awarding our client all of its arbitration expenses.
Purchases and sales of power plants and other energy assets:
- While Constellation was divesting assets in Latin America, an affiliate cancelled an EPC contract to build a plant in Guatemala. The contractor, a Cayman Islands company, sued Constellation and its officers in Guatemala. Litigation in Guatemala is a quagmire. Judges regularly meet with a party’s lawyers ex parte; our clients even had ne exeat orders entered against them so that they could not leave if they traveled to the country. We filed arbitration in the US and got an injunction against the Guatemalan suit, a finding that the suit was filed in bad faith and an award of attorney’s fees. A federal court upheld the injunction and award, enabling our client to settle the matter favorably and sell its Guatemala assets.
- One of the largest cases we handled for Mirant was a $200 million suit brought by Enron and Edison International. Mirant terminated and refused to close on a fully executed agreement to purchase a power plant in Puerto Rico from Enron and Edison. We defended Mirant in California state court and then in Mirant’s and Enron’s bankruptcies. Ultimately, we obtained a settlement for less than $20 million of allowed claims in the Mirant bankruptcy -- a recovery of less than 10 cents on the dollar for claimed damages.
- When the coal export market fell in recent years, our client faced liquidated damage claims under “take or pay” contracts with transport and terminal companies. Because of the market decline, our client didn’t take and deliver coal under certain uneconomic take or pay contracts. We challenged the enforceability of the liquidated damages and obtained multi-million dollar reductions in our client’s payments.
- On the flip side, when the coal market went through the roof a few years earlier, Massey Energy (headed by the notorious Don Blankenship) failed to deliver under low-priced contracts favorable to our client, Constellation. Massey could get more for that coal elsewhere. We secured an eight-figure recovery for our client through a favorable settlement reached after three days of arbitration.
- We obtained an eight-figure settlement for our client on the eve of arbitration for breach of a coal supply management agreement.
Oil and gas disputes:
- We represented Sunoco Logistics Partners L.P. in a dispute over rights of first refusal to an interest in a pipeline, which was favorably settled.
- We also successfully represented Sunoco Logistics Partners L.P. in various lawsuits and bankruptcy proceedings related to the SemCrude L.P. bankruptcy, defending claims by oil and gas producers against downstream purchasers.
- We successfully represented Transcanada Pipelines, Ltd. in disputes concerning alleged oral gas trading contracts as well as multiple suits arising out of a plant explosion and antitrust claims.
- We successfully represented a retail gas supplier in natural gas pricing and payment disputes with large end-user customers. For example, we obtained an arbitration award granting our client every dollar it sought in damages, attorney’s fees and arbitration expenses on a claim to enforce two unsigned amendments to a gas supply contract.
- We represented a limited partner in an oil and gas exploration and production partnership in connection with breach of fiduciary duty claims against the general partner.
Project finance disputes in the energy industry:
- We defended a joint venture (Freehold Cogeneration Associates) in a lawsuit brought by a lender. A predecessor of GE Capital agreed to finance construction of a cogeneration facility. When the lender stopped funding, our client had to sell its interest in a long-term power purchase agreement. The lender sued, claiming the sale proceeds were “additional interest” on its funding. We counterclaimed for breach of the financing agreement. At trial, after the lender put on its case in chief, a judgment was entered for our client on all but one of the lender’s claims. The case then settled favorably.