Jan Berkowitz, CEO of NewLead JMEG, has filed for bankruptcy protection in the US just days ahead of his court deposition in Philadelphia on October 14 and 15, which threatens to halt proceedings.
Berkowitz filed a voluntary petition for relief on October 12 with the United States Bankruptcy Court for the Western District of North Carolina. Bankruptcy filings have the power to stay judicial proceedings against the debtor, but the court has not yet announced such a halt.
NewLead JMEG is a US-based coal mining joint venture with Greek carrier NewLead Holdings. The two companies and their respective CEOs Berkowitz and Michael Zolotas are defendants in an ongoing breach of contract case being heard in the Supreme Court of the County of New York.
Michael Zolotas was deposed in the New York court on September 30 and October 1. The plaintiff Serge Turko, principal of TransAsia, will be deposed in New York on October 19-20.
Commodity trading company TransAsia is suing the defendants for $6.2m in compensation over a failed agreement to buy 110,000 tonnes of coal from Kentucky’s Five Mile Mine, which was never delivered to the buyer. Splash has covered the case extensively.
Just days before Michael Zolotas was deposed in New York, NewLead Holdings last month made four different announcements, relating to its failed acquisitions of coal mines and coal contracts it said it was unable to fulfill.
In its complaint, filed December 2013, the plaintiff claims the defendants made these “misrepresentations” in order to inflate NewLead Holdings’ share price and prevent it being delisted from the NASDAQ stock exchange, and to obtain credit from banks. The defendants have denied these allegations in full.
NewLead JMEG filed a stipulation of liability for breach of contract to the Supreme Court of the County of New York in July, and withdrew its two counterclaims against TransAsia. The stipulation concerns count 1 of TransAsia’s complaint, the failure to deliver the coal purchased.