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Aegean Litigation Trust loses case against ex-staff of Aegean Marine Petroleum Network

ALT on 12 September 2019 filed a complaint against former Directors and Officers of Aegean over alleged breach of fiduciary duty due to misuse of over USD 300 million in funds.

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The Aegean Litigation Trust (ALT), which represents several creditors acting against the now defunct Aegean Marine Petroleum Network Inc. (Aegean), have lost its case against the bunkering firm’s former Directors and Officers at the United States District Court for the Southern District of New York on 8 July 2020, according to the judgement document obtained by Manifold Times.

ALT on 12 September 2019 filed a complaint against E. Nikolas Tavlarios, Peter C. Georgiopoulos, John P. Tavlarios, and George Konomos to the U.S. court over alleged breach of fiduciary duty.

The alleged breach ultimately resulted in Aegean Founder Dimitris Melisanidis’ misappropriation of over USD 300 million in funds.

The Melisanidis-owned consultancy OilTank Engineering and Consulting (OilTank) was involved in a project to build a storage facility in Fujairah where $58 million of the project’s $221.9 million cost remain unaccounted for, claimed ALT.

OilTank also received at least $68 million in satisfaction of allegedly fraudulent consulting invoices relating to the Fujairah oil storage project, it further claims.

An alleged fake trade receivables scheme which took place after the completion of the Fujairah oil storage project saw Aegean transfer $186 million to OilTank between June 2015 and January 2018 through $200 million of overstate accounts receivables at Aegean.

Melisanidis used a subsidiary of Aegean to enter 40 fake contracts with four shell entities (representing approximately 8.05 million metric tons of fuel oil) to accumulate the $200 million to conceal the transfers.

Standard of Review

U.S. District Judge Naomi Reice Buchwald noted the former Directors and Officers defended themselves from claims by dismissing the ALT complaint for “failure to state a claim upon which relief can be granted”.

She agreed, and stated such pleading: “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”

Duty of Care

ALT’s complaint centred around an alleged failure by Aegean’s former Directors and Officers to monitor the company; it accused the group of breaching fiduciary duties, including duty of care.

However, the Judge found ALT’s asserted breach of fiduciary duty claim to be a Caremark claim, which implicates only a breach of the duty of loyalty.

She listed six purported ‘red flags’ of Melisanidis’ alleged fraud activities which included a criminal history before founding Aegean in 2005, the unaccounted $58 million in the OilTank project and the 40 fake contracts to several shell companies.

However, she stated the developments does not mean the former Directors and Officers knowing of such activities when they occurred.

“Directors and officers, however, cannot consciously disregard purported red flags of which they are unaware,” she explained, while adding, “the Court accordingly concludes that plaintiff has failed to state his Caremark claim against defendants.”

“Defendants’ motion to dismiss is granted, and plaintiff’s request for leave to amend is denied. The Clerk of Court is respectfully directed to terminate all motions pending in this case and to close it,” she concludes.

A timeline organised list of events preceding the current development have been recorded by Manifold Times below:

Related: Former Aegean Directors and Officers face $300 million lawsuit
RelatedMinerva Bunkering appoints Tyler Baron as Chief Executive Officer
RelatedAegean Marine Petroleum Network reorganises as Minerva Bunkering
RelatedAegean: U.S. Bankruptcy Court clears Mercuria Energy take over
RelatedAegean: Bankruptcy Court approves disclosure statement, procedures
RelatedAegean: ‘Significant milestones’ achieved in restructuring progress
RelatedAegean Chapter 11: Judge authorises restructuring activity to start
RelatedAegean Chapter 11: Mercuria counters Oaktree/Hartree proposal plan
RelatedAegean Chapter 11: Bondholders object Mercuria’s $532 million DIP Facility
RelatedAegean Chapter 11: Creditor list shows exposure of 30 parties
RelatedAegean files for Chapter 11, Mercuria to be ‘stalking horse bidder’
RelatedAegean auditors alleges up to $300 million ‘misappropriated’
RelatedAegean: Forensic auditors target investigations on four companies
RelatedPresident of Aegean to leave, effective November 15
RelatedRumours: Alleged changes at Aegean’s management
RelatedMercuria starts ‘sole lender’ arrangement with Aegean
RelatedAegean establishes new management committee
RelatedMercuria bails Aegean out with $1 billion credit
RelatedOcean Intelligence comments on Aegean credit downgrade
RelatedAegean shares down 71%, to face legal investigations
RelatedAegean audit uncovers $200 million account discrepancy
RelatedAegean unfolds several business developments
RelatedAegean drops founder, elects new board members
RelatedAegean requests for ‘additional time’ to file annual report
RelatedAegean welcomes new Chief Financial Officer
RelatedLawsuit filed against Aegean’s H.E.C. acquisition
RelatedAegean to offer ‘one-stop-shop solution’ with H.E.C. acquisition
RelatedAegean in $367 million acquisition of port reception facilities services group
RelatedAegean shareholders ‘gravely concerned’ over board’s silence
RelatedShareholders nominate ‘highly qualified’ candidates to Aegean board
RelatedAegean Marine Petroleum Network under shareholder pressure

 

Published: 15 July, 2020

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Vessel Arrest

Malaysia: MMEA detains Singapore-flagged bulker for illegal anchoring in Perak

“Queen Harmony”, operated by an Egyptian captain along with one Russian, two Ukrainians and 17 Filipino crew members, was detained about 13 nautical miles northwest of Pulau Jarak.

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Malaysia: MMEA detains Singapore-flagged bulker for illegal anchoring in Perak

Perak Malaysian Maritime Enforcement Agency (MMEA) on Tuesday (18 March) detained a Singapore-flagged bulk carrier for anchoring without permission about 13 nautical miles northwest of Pulau Jarak at 3.30pm on 17 March. 

Perak MMEA director Maritime Capt Mohamad Shukri Khotob said the vessel, Queen Harmony, was operated by an Egyptian captain along with one Russian, two Ukrainians and 17 Filipino crew members. 

Further investigation found that the ship failed to present any documents for permission to anchor and did not report their arrival in Malaysian waters.

The case is being investigated under the Merchant Shipping Ordinance 1952, which carries a fine of not more than MYR 100,000 or a jail term of not more than two years, or both, for anchoring without permission. It is also being investigated for the offence of failing to report its arrival, which carries a fine of up to MYR 5,000. 

Two crew members of the ship were taken to the Perak State Maritime Headquarters for further investigation.

 

Photo credit: Malaysian Maritime Enforcement Agency
Published: 20 March, 2025

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Winding up

Singapore: Final meetings scheduled for Flores Shipping and related companies

Other companies involved in the matter are Lombok Shipping and PACC Banda; meetings will be held at 600 North Bridge Road, #05-01 Parkview Square, Singapore 188778.

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The final meetings of members of Flores Shipping Pte Ltd and related companies, have been scheduled to take place on 14 April, according to the company’s liquidators on a notice posted on Friday (14 March) on the Government Gazette.

The other companies involved in the matter are Lombok Shipping Pte Ltd and PACC Banda Pte Ltd. 

The meetings will be held at 600 North Bridge Road, #05-01 Parkview Square, Singapore 188778 at the following times: 

  • Flores Shipping: 9am 
  • Lombok Shipping: 9.30am
  • PACC Banda: 10am

The meetings will be held the purpose of having an account laid before the members showing the manner in which the winding up has been conducted and the property of the company disposed of and of hearing any explanation that may be given by the liquidators.

The details of the liquidators are as follows:

Victor Goh
Khor Boon Hong
Marie Lee
Joint Liquidators
C/o Baker Tilly
600 North Bridge Road
#05-01 Parkview Square
Singapore 188778

Note: Pursuant to Section 181 of the Companies Act 1967, a member entitled to attend and vote at this meeting is entitled to appoint another person or persons as his/her proxy to attend and vote in his/her stead. Proxies to be used at the meeting must be lodged at the Office of the Liquidators not later than 48 hours before the meeting.

Related: Singapore: Flores Shipping and related companies to undergo members’ voluntary liquidation

 

Photo credit: Benjamin-child
Published: 17 March, 2025

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Legal

Dutch crew members plead guilty over their role in major 2024 Singapore bunker spill

Merijn Heidema, Eric Peijpers, Martin Hans Sinke, and Richard Ouwehand, who are crewmen of dredger “Vox Maxima”, pleaded guilty for failing to discharge their duties properly at the State Courts on 12 March.

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Four Dutch crew members of Netherlands-flagged dredger Vox Maxima, which crashed into a Singapore-flagged bunker vessel in 2024 and caused a major bunker spill in Singapore, on Wednesday (12 March) pleaded guilty for failing to discharge their duties properly, according to media reports. 

Merijn Heidema, 26, Eric Peijpers, 56, Martin Hans Sinke, 48, and Richard Ouwehand, 49, pleaded guilty to one charge each under the Merchant Shipping Act 1995 at the State Courts. 

Singapore-flagged bunker vessel Marine Honour was hit by Vox Maxima at Pasir Panjang Terminal on 14 June last year, which resulted in an oil spill in Singapore waters.

The crash caused one of Marine Honour’s oil cargo tanks to rupture, releasing 400 metric tonnes (mt) of low-sulphur fuel oil into the sea. 

The dredger lost propulsion and steering control before crashing into Marine Honour.

Court documents reportedly revealed that on the morning of 14 June 2024, a circuit breaker controlling the flow of electrical power from one of the dredger’s main generators to a step-down transformer was opened for maintenance works to be conducted.

The circuit breaker remained open after the maintenance works were completed that morning. 

Peijpers, a second engineer, and Heidema, a third engineer, who were the officers in charge of the engineering watch at the time, did not check the condition of the circuit breakers.

This eventually led to another circuit breaker tripping, which then led to the loss of steering and propulsion control of the dredger.

Heidema and Peijpers also failed to ensure a sufficient reserve of power was available for Vox Maxima’s steering gear when the engine room was put in a standby condition.

Upon the loss of steering control, both Ouwehand and Sinke, who were responsible to carry out emergency steering, did not do so.

The prosecution sought fines of between SGD 40,000 and SGD 50,000 each for Heidema and Peijpers and fines between SGD 20,000 and SGD 30,000 each for Ouwehand and Sinke.

The four Dutch crew members are expected to be sentenced on 2 April.

Related: Four Dutch seafarers charged for alleged roles in causing Singapore oil spill
Related: Thirteen deficiencies flagged during inspection for dredger involved in Singapore oil spill
Related: Singapore oil spill: Minister refutes claim that contractor was slow in preventing further spillage
Related: MPA: Claims exceeding liability of “Marine Honour” owner will be made against international fund
Related: MPA: Owner of bunker tanker involved in Singapore oil spill is liable for pollution damage
Related: Malaysia to look into demands of Johor fisherman affected by oil spill from Singapore
Related: Singapore oil spill: Clean-up enters next phase of cleaning rock bunds
Related: MPA: Clean-up ops continue following oil spill in Singapore, affected beaches closed
Related: Singapore: Oil spill cleanup after allision between dredger “Vox Maxima” and bunker tanker “Marine Honour”

 

Photo credit: Manifold Times
Published: 13 March, 2025

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