LAFAYETTE — Lafayette businessman Michel Moreno, who was sued in April for repayment of a $25 million loan made to one of his companies, contends the money from GE Oil & Gas was not a loan, rather the first payment toward a joint venture that later collapsed, according to court documents.
Moreno is countersuing GE Oil & Gas, seeking unspecified damages for what he claims was a business partnership between Turbine Generation Services, which Moreno owns, and GE Oil & Gas.
Moreno said GE reneged on the deal after it promised to invest as much as $100 million for a 50 percent stake.
“Moreno formed (Turbine Generation Services) as a vehicle to carry out a joint venture between Moreno and GE Oil & Gas, involving the oil field power generation business,” Moreno’s attorneys wrote in federal court documents. “Under the joint venture agreement, (GE Oil & Gas’) $25 million ‘loan’ was to be converted to ownership interest in (Turbine Generation Services).”
GE Oil & Gas on April 7 sued Moreno for $25 million in a loan it made to Moreno so he could purchase inventory in May 2013 for Turbine Generation Services.
GE said it was also pursuing payment of another $2 million that GE said was accrued interest on the loan that was to be repaid in full by Sept. 13, 2013. The company said Moreno personally guaranteed the loan, a claim backed up with the loan document signatures of Moreno and his wife, Tiffany.
Moreno is disputing that he personally guaranteed the loan would be repaid because “under the terms of the joint venture agreement, the amounts due under the loan … were to be converted to an ownership interest in (Turbine Generation Services),” according to the document.
The document, filed May 16 in U.S. District Court, lays out Moreno’s narrative about the history of the loan and the alleged joint venture.
Moreno’s attorneys said he approached GE Oil & Gas in October 2012 with an offer to form a joint venture, a “courtship” that in the months that followed “grew intensely.”
“Moreno even attended (the) General Electric Worldwide Conference in Florence, Italy, where Moreno and the president of GE Oil & Gas made a joint presentation to GE’s 200 largest customers,” according to the document.
The combined business was called “Project Cayenne” and would make money by converting the turbine engines in military helicopters retired from battlefields of Afghanistan and Iraq for use by oil companies drilling in Texas and other states, the document says.
“Ultimately, GE Oil & Gas was to invest $100 million in the joint venture for a 50 percent stake in (Turbine Generation Services),” the document states.
In November 2013, another Moreno-owned company — Green Field Energy Services — filed for bankruptcy.
“Apparently spooked by this (the bankruptcy), GE Oil & Gas informed Moreno that it did not want to pursue Project Cayenne” and in December 2013 sent Moreno a letter demanding full payment of the $25 million, the document states.
Moreno partly bases his claims of a binding joint-venture agreement — the terms of which he said was reached on May 13, 2013 — on an 11-page “Term Sheet” that spells out the specifics.
However, a disclosure on page 1 of the term sheet says it is non-binding until due diligence and other inspections of the joint venture’s fine print is completed.
An effort seeking to clarify Moreno’s claim of a binding joint venture was unsuccessful. A secretary for Lafayette attorney Richard Hymel, an attorney for Moreno, said Wednesday he had no comment.
U.S. District Judge Rebecca F. Doherty on Monday laid out the schedule for the case, including setting the trial for Oct. 5, 2015.