Attorneys for Billionaire William (Bill) Koch argued before the Delaware Supreme Court on Dec. 19 that Chancery Court Judge Travis Laster misconstrued Delaware law in August (GM Aug. 10, p. 1) when he ruled that two private equity firms, Crestview Partners LLC and Load Line Capital LLC, both minority investors in Koch’s Oxbow Carbon LLC, West Palm Beach, Fla., could force the sale of Oxbow.
According to Bloomberg, attorney David Hennes said the “plain language” of the investment agreement barred such an exit sale, though Judge Laster ruled that the firms could demand the sale if the funds requested it. The judge also said Koch violated legal duties by dragging his feet in putting the company up for auction.
The investment firms and Koch traded several barbs throughout the litigation, with the firms alleging that Koch had mismanaged Oxbow funds by buying a personal jet, funding private school for his children, and expending huge amounts to fight the Oxbow sale. Koch alleged that the firms conspired with former Oxbow executives to promote the sale.
Bill Koch had to put up an $87.8 million bond in order to pursue the appeal (GM Sept. 28, 2018).
Moelis & Co., a New York-based investment bank, estimated Oxbow’s fair market value at $2.65 billion for the purposes of the sale, according to Bloomberg.
Over the years, Oxbow has been involved in several commodities, including fertilizer, sulfur, sulfuric acid, petroleum coke, coal, carbon, and gypsum. It bought the fertilizer and sulfur trading business of International Commodities Export Corp. (ICEC) in 2011 (GM Feb. 7, 2011; Nov. 29, 2010). However, it sold its Oxbow Fertilizer LLC unit to Oakley Fertilizer Inc., North Little Rock, Ark., in late 2017 (GM Nov. 3, 2017).
Bill Koch is the brother of David and Charles Koch of Koch Industries Inc., Wichita. Bill Koch is worth an estimated $4 billion, according to Bloomberg data.