Charif Souki, a notable personality in the energy sector, encounters a substantial financial setback, with a Texas bankruptcy judge, Christopher Lopez, determining that he owes lenders a minimum of $100 million.
This verdict arose after Souki leveraged his opulent ranch near Aspen and shares of Tellurian Inc., a liquefied natural gas export company he helped establish, as collateral for personal loans.
Tensions escalated when Souki initiated Chapter 11 bankruptcy proceedings for his Aspen estate in July, following a legal dispute against his lenders in New York, accusing them of impeding his endeavors to settle his debt.
Court Ruling Details
Judge Lopez dismissed Souki’s claims regarding his lenders, which included a fund managed by UBS O’Connor LLC, alleging that they undervalued his ranch and sold Tellurian Inc. shares at unreasonably low prices, thus hindering his efforts to repay the debt.
The court concluded that the lenders had acted in good faith, collaborating with Souki on a mutually agreed plan to repay the loans and endeavoring to sell the collateral in a commercially reasonable manner.
Despite Souki’s contention that his lenders could have realized up to $158 million by selling the shares at an opportune moment, they yielded only about $30 million. The judge highlighted UBS’s belief that the value of Souki’s collateral exceeded his debt by the conclusion of 2021.
Asset Liquidation and Debt Repayment
The Aspen ranch, spanning 813 acres and featuring barns and lavish residences, was placed into bankruptcy amidst Souki’s debt dispute.
Eventually, it was auctioned off for $30.5 million under Chapter 11 proceedings, with the UBS O’Connor managed fund and other creditors prevailing as buyers. This sale forms a component of the endeavors to offset the sum Souki owes to his lenders.
Similarly, Souki’s holdings in Tellurian Inc., utilized as collateral for loans acquired in 2017 and 2018, were also liquidated as part of the debt settlement procedure. Souki had alleged that his lenders sold the Tellurian stock at an inopportune moment, a claim refuted by the lenders.
