A Baton Rouge law firm secured a $20 million verdict Friday against a group of executives—including the billionaire founder of Patron Tequila—for a fraud scheme involving an oil and gas support company.
A federal jury in Fort Worth, Texas, found executives of Latitude Solutions, Inc. breached their fiduciary responsibility to the water remediation company by essentially operating a “pump-and-dump” scheme, draining the company of its cash.
J.E. Cullens, of Baton Rouge-based Walters, Papillon, Thomas, Cullens, LLC, was lead counsel in the case, representing the bankruptcy trustee, hired after Latitude went bankrupt in 2012.
The most notable defendant was Paul DeJoria, the 73-year-old businessman who founded the popular hair care company John Paul Mitchell Systems as well as Patron Spirits Company. DeJoria is a frequent guest on the ABC show “Shark Tank,” and is worth around $3 billion, according to Forbes.
The jury awarded $13.4 million in compensatory damages and $8 million in punitive damages.
“Latitude Solutions really had a promising business plan in terms of its ability to clean water,” says Darrell Papillon. “But DeJoria and his other directors and shareholders were more interested in affecting the stock price.”
LSI, a publicly-traded company produced water remediation units to clean waste water near oil wells and fracking sites. The law firm, in a release, says it expects an appeal in the case.
—Sam Karlin
