Craig Hall, a well-known businessman from North Texas, attempts to get back more than $150 mln of the $180 mln which he has lost by loaning or investing in several natural gas partnerships. Two of the companies in which he is majority shareholder, Hall Phoenix/Inwood Ltd. and Hall Performance Energy Partners 4 Ltd., are now plaintiffs in the court case. Hall claims that both limited partnerships
provided financial support to various drilling partnerships based on lies by the senior executives running them. Three partnerships and four individual defendants are alleged of falsely portraying the situation, and enticing Hall’s partnerships into loaning or investing huge sums.
In court filings, Hall said that business relationships and friendships made him invest more than $150 mln into loans and equity for drilling partnerships, and he is trying to get back the losses that are tied to misleading information from the partnerships.
The events leading to the lawsuit started in 1986, when Hall, through affiliates of his company Hall Phoenix/Inwood Ltd., started to invest in business ventures of his friend Anthony J. Gumbiner. Now Gumbiner and petroleum engineers William H. Marble and Meduna are the defendants in the lawsuit. Other defendants are Dallas-based Hallwood Group Inc (HWG), controlled by Gumbiner; William L. Guzzetti, president and CEO of HWG; and British Virgin Islands-registered companies Hallwood Investments Ltd. and Hallwood Financial Ltd., both established and controlled by Gumbiner. The only other officers or owners of the BVI companies are Gumbiner’s family members. According to the lawsuit, these companies also do not have any employees.
Attorney Mark Werbner, who represents most of the defendants, said he will prove in court that Hall was not misled into investing or loaning money for the drilling ventures. By his words, “Craig Hall was a sophisticated investor and was fully informed about the Hallwood Energy drilling program,” and his lawsuit is just an attempt to recover a loan that he made understanding and knowing the risks of the oil and gas business.