▸ The gist: Former Stabil Drill executive Chris Russo suffered a major setback a few days ago when a Texas appellate panel shot down his attempt to invoke the Fifth Amendment to avoid turning over a cache of emails to Superior Energy Services. Superior sued Russo and another top executive in 2016 for tens of millions of dollars, alleging the duo masterminded an elaborate scheme to defraud the company.
▸ The lawsuit: Filed in Texas’ Harris County District Court by publicly traded Superior Energy Services and two of its subsidiaries, Stabil Drill and SESI LLC, the suit accuses former Stabil Drill execs Russo and Martin LeBlanc, who served as COO and CFO, respectively, of engaging in a complex scheme of "self-dealing" over nearly a decade. Superior claims they and others created separate but interwoven corporate entities (which they owned or controlled directly or indirectly) "to improperly invoice Stabil Drill for goods and services and to benefit themselves by being on both sides of various transactions." Also named as defendants are Scott Kerstetter (Lafayette), Daniel Anthony (Texas) and Mike Sheffield (Oklahoma); among the numerous corporate defendants are Laguna Oil Tools, Renegade Performance Properties, Renegade Oil Tools and LeBlanc Real Estate Investments, all of Louisiana, and Quest Holdings, Triton Hardbanding Service and MSI Inspection Service, all of Oklahoma. Superior et al are seeking $72 million.
▸ Where it stands: Discovery continues, as the appellate court decision held that the Fifth Amendment protection against self-incrimination does not apply to records for corporate entities Russo controlled (or allegedly controlled), upholding a lower court ruling compelling him to turn over more than 1,500 emails and documents he hoped to shield. "Russo has not shown that the documents for which he asserted the privilege are not records of corporate entities he allegedly owned or controlled," the court writes. Russo sought to exercise his Fifth Amendment right not to self-incriminate due to the threat of criminal liability resulting from the civil action. Court documents indicate the civil trial will likely be set for October.
▸ Some background: Lafayette-based Stabil Drill, which sells and rents oilfield tools and equipment for downhole projects, was acquired by Superior Energy in the late 1990s for $25 million in cash and notes. Chris Russo’s father, Sammy Joe, retired as president of the company shortly before his death in 2013.
UL Lafayette’s new baseball park is named for the Russo family, which pledged $5 million toward redevelopment of the park over a five-year period. Final payment is still pending. — Leslie Turk