Two energy-trading companies in Houston sued their former general counsel on Jan. 8, alleging she took an “adverse role” to them when siding with one of the two owners of the companies when the owners were negotiating a business split.
Cobalt Capital Management GP and Cobalt Capital Management Partners bring negligence and breach of fiduciary duty causes of action against the former GC, Noha Sidhom, and seek between $200,000 and $1 million in damages from her.
Sidhom now works at Inertia Power in Houston but lives in Washington, D.C., the plaintiffs allege in Cobalt Capital Management GP v. Noha Sidhom, filed in the 125th District Court. Sidhom did not immediately return a telephone message or respond to an email.
Jeremy Stone and Ernest Boyd, shareholders in Mehaffy Weber in Houston who represent the plaintiffs, did not return one telephone message each.
The Cobalt companies allege in the petition that, from 2010 to October 2013, Ashton Soniat and Mark Schwausch owned a group of businesses involved in energy trading in Houston, including the plaintiffs. The plaintiffs allege Soniat owned 70 percent of the companies and Schwausch owned 30 percent.
The plaintiffs allege that, in mid-2013, Soniat and Schwausch decided to “part ways” and began negotiations to dissolve their business relationship.
“Despite Sidhom’s role as General Counsel for the entities, she sided with Schwausch and represented his interests in the negotiations with Soniat, taking a role adverse to Plaintiffs,” the plaintiffs allege.
The Cobalt companies allege that the negotiations became contentious, largely due to “Sidhom’s role in assisting Schwausch with negotiations,” and the dispute led to underlying litigation. However, they continue, the parties negotiated a settlement agreement effective on Oct. 1, 2013, which called for Soniat to purchase Schwausch’s interests in the jointly owned entities, which has occurred.
The plaintiffs allege Sidhom is now general counsel to Schwausch’s new businesses “and continues to take positions adverse to Plaintiffs.”
The plaintiffs seek unspecified actual and punitive damages, along with interest. They also want Sidhom to disgorge fees paid by the plaintiffs and any profit obtained “as a result of her breaches of fiduciary duties.”
Grant Harvey, a partner in Gibbs & Bruns in Houston who represents Schwausch, confirms that Sidhom works for Schwausch at his new company, Inertia Power of Houston.
He said that, while Schwausch and Soniat did settle their dispute over the breakup of their business partnership last October, Schwausch filed another state district court lawsuit against Soniat on Dec. 27, 2013.
In that petition, Mark Schwausch v. Ashton Soniat, filed in the 165th District Court, Schwausch alleges Soniat breached the settlement agreement by failing to provide Schwausch with a “complete copy” of company software and company data, as specified in the settlement agreement.
Schwausch seeks a temporary and permanent injunction to order Soniat and other defendants to provide Schwausch with the software and data.
“It looks like Mr. Soniat is trying to retaliate by suing one of the employees who essentially went with Mr. Schwausch,” Harvey said about the Jan. 8 petition filed against Sidhom.
Soniat did not return a telephone message seeking comment.
Boyd and Stone, the Mehaffy Weber lawyers who filed the Jan. 8 petition for the plaintiffs, also represented Soniat in underlying litigation against Schwausch that resulted in the settlement agreement.