Lawsuit over Kerkorian oil investment settled
A lawsuit over a failed oil company investment by Kirk Kerkorian’s Tracinda Corp. – one that started with a personal poke at former longtime friend Edward “Tiger” Mike Davis – has settled quietly on undisclosed terms.
Kerkorian’s Tracinda paid $684 million for a one-third stake in Denver-based Delta Petroleum Co. in late 2007, hoping to hit an oil and gas gusher in eastern Utah. But when the wells turned out to be disappointments, Delta’s fortunes went dry, too. The entire company is now valued at just $7.8 million in over-the-counter trading, so Kerkorian has lost more than 99 percent of his investment.
In the court documents filed in December in Clark County District Court, Tracinda accused Davis, a Las Vegas resident with oil and gas interests elsewhere, of “devis(ing) a scheme to deceive (Tracinda) into investing in Delta … based on misrepresentations and omissions concerning Delta.”
In particular, Tracinda said Davis had worked in concert with then-Delta CEO Roger Parker to receive kickbacks on the deal.
According to Delta documents, Davis received a finder’s fee of 263,000 shares then worth about $5 million for bringing Kerkorian to the table.
However, Davis attorney Lew Brandon Jr. countered that Davis was never a Tracinda adviser and scoffed at the idea that “one of America’s largest and most sophisticated equity investment companies” had been snookered.
Instead, he wrote, Delta was punished by the plunge in oil prices in the latter part of 2008.
“Apparently unable to cope with the loss resulting from the worldwide recession, (Tracinda) seeks to pass the buck and blame (Davis),” Brandon wrote.
In launching the case, Tracinda included a reference to Davis’ background as a chauffeur and then-husband of former Denver Post owner Helen Bonfils for a few months in 1959, when he was 28 and she was 69. About 12 years later, according to a Denver Post article five years ago, they went through a divorce described as “the stuff courtroom legends are made of.”
After Brandon attacked the reference to Davis’ past as “incredibly improper and scandalous,” Tracinda edited it out of an amended complaint.
A couple of years ago, memos that Davis wrote to employees in the 1970s as owner of Houston-based Tiger Oil Co. made a splash as they circulated around the Internet. What attracted attention were missives such as, “Idle conversation and gossip in this office among employees will result in immediate termination. … DO YOUR JOB AND KEEP YOUR MOUTH SHUT!”
On another occasion, he wrote, “Do not speak to me when you see me. If I want to speak to you, I will do so. I want to save my throat. I don’t want to ruin it by saying hello to all you sons-of-bitches.”
The Delta case formally ended Friday moments before a scheduled hearing where Brandon was seeking to force the 94-year-old Kerkorian to come to Las Vegas to testify in a two-day deposition. Kerkorian’s attorneys wanted a shorter session within driving distance of his Los Angeles-area home.
Contact reporter Tim O’Reiley at
toreiley@reviewjournal.com or 702-387-5290.