INTEROIL, embroiled in a potentially damaging lawsuit, is being taken on by a high profile litigator in New York.
Veteran New York-based securities class action litigator Howard B. Sirota announced on Monday that he is investigating InterOil.
InterOil shares plunged last Friday on the New York Stock Exchange following an expose article released in the morning the same day detailing apparent discrepancies between InterOil’s public regulatory filings and unsealed court transcripts.
According to the article, InterOil’s CEO Phil Mulacek told a federal bankruptcy judge in Texas, US, that InterOil faced a “devastating” impact of a pending lawsuit which triggered a bankruptcy filing by an entity controlled by Mulacek, as well as recent heavy insider selling prior to public revelation of the apparent discrepancies.
The article said the bankruptcy judge dismissed the filing as having been filed “in bad faith”.
Sirota, who was a lead counsel in a number of high-profile securities class actions in America, including Crazy Eddie, Sahlen, Wedtech, Firstplus Financial, and the IPO Securities Litigation, said he had been monitoring InterOil for the past year after learning that recidivist securities law violators in America and Canada were involved in selling InterOil securities.
Sirota was quoted in a publication as saying: “Heavy recent insider selling appears with hindsight to have been prescient, and suspicious.”
He invited InterOil shareholders, who wished to discuss their legal options regarding a possible securities class action against InterOil and others to contact him.
InterOil said in a statement released in Port Moresby yesterday that it believed the allegations made in an article concerning certain litigation which has been ongoing in Texas since 2005, had been raised now in an attempt to divert attention from the successful operations of the company.
It said the article was timed to benefit recent short selling activities.
The “short” interest in InterOil increased to 3,548,056 shares in mid-March, it added.
“InterOil’s policy is to not provide commentary on ongoing litigation beyond the description of it appropriately and consistently set forth in our annual information statement and Form 40-F available on our website or from the SEC.”
InterOil said in their annual information form (AIF), filed on March 1, they continued to disclose that CEO Mulacek, and his controlled entities Petroleum Independent & Exploration Corporation and PIE Group, LLC, together with the company and certain of its subsidiaries, are defendants in Todd Peters, et al v Phil Mulacek, a case pending in the 284th district court of Montgomery county, Texas.
It said InterOil and its subsidiaries were not party to, nor otherwise involved in the Nikiski Partners filing referenced in the article.