The 13th District of Texas has upheld an arbitral award in an investment dispute.  In Black v. Shor, No. 13-11-00413-CV, (Tex. App.—Corpus Christi Apr. 18, 2013, no. pet. h.), Seashore Investments Management Trusts invested in a number of oil and gas companies owned by Paul Black (“Black”).  Between 2001 and 2007, Toby Shor, made substantial investments in Black’s companies using the trust.  As part of the investments, Seashore entered into several contracts with Black.

In 2007, Shor became the trustee of Seashore.  After Shor inquired into the financial relationship between the Black companies, she filed a lawsuit seeking injunctive relief against Black for purported financial malfeasance.  Shor also stated the agreements between Seashore and Black required the parties to resolve any disputes through arbitration and requested pre-arbitration discovery.  The trial court appointed a special master to assist with the pre-arbitration process.  Black then sought sanctions against Shor and sought to terminate his relationship with Seashore.  Black also filed a lawsuit for breach of contract against Seashore in a separate court.

The parties ultimately participated in an arbitration proceeding before a three-member panel.  In a ten-page decision, the panel found in favor of Seashore and awarded the trust about $31 million for fraud, breach of contract, and breach of fiduciary duty.  The panel also awarded punitive damages, determined that Paul Black was personally liable to Seashore, and awarded Shor attorneys’ fees.  Seashore then sought to confirm the award in one trial court and Black sought to vacate the award in a different court.  After the cases were consolidated, the arbitral award was confirmed.  Black then appealed the decision to the Corpus Christi Court of Appeals.

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Tags: Paul Black, Seashore Investments Management Trusts, Shor, Toby Shor