December 23, 2016 Comments (0) Blog, Current Investigations, Securities Fraud

Primera Energy Update

(Last Updated On: March 31, 2017)

Are you concerned about investment losses with Primera Energy? If so, the securities attorneys of The White Law Group may be able to help you recover your losses in a FINRA arbitration claim against the brokerage firm that recommended the investment.

A bankruptcy judge has closed the Chapter 11 case involving San Antonio-based exploration and production company Primera Energy but its former owner Brian Alfaro still faces other legal challenges.

U.S. Bankruptcy Judge Craig Gargotta issued a final decree on Dec. 16 closing the bankruptcy case, bringing to an end more than 18 months of legal haggling between Primera and more than 500 people and companies.

As we told you in July, Alfaro filed for Chapter 11 in June 2015, as he was facing a lawsuit from investors. Judge Gargotta quickly replaced Alfaro with Longview-based attorney Jason Searcy trustee.

Court records show that Judge Gargotta issued an Aug.12 order to pay Searcy $105,475 in fees and $8,671 in expenses for his services as trustee. A final report of operations for Primera remains pending but court records show that Searcy made more than $873,000 in disbursements during the third quarter.

In a Nov. 21 motion, Searcy, the trustee reported that most of that work was completed.

Still facing the investors’ lawsuit, Alfaro is expected to go to trial before Judge Gargotta in March. Although the investors won a $15.4 million judgment that was issued against Primera earlier this month, they are still going after Alfaro and his wife as individuals.

The lawsuit accuses Alfaro of operating a boiler-room sales operation that targeted the elderly, who were told oil and gas drilling was a low-risk investment. They also were told they would get a working interest in a well for their investment, but those interests were never conveyed, the suit adds. Thus, their investments were wiped out when Primera filed for bankruptcy.

Unfortunately, many investors were not made adequately aware of the risks associated with energy investments. Oil and gas investments are generally speculative and can be very high risk ventures. They are arguably better suited for sophisticated and institutional investors that can afford total loss of their investment. Even bonds in the oil and gas industry, which many investors think of as “safe,” are not without risk.

Before recommending an investment, your broker has a fiduciary duty to adequately disclose the risks involved in the investment and to perform the necessary due diligence to determine if the investment is suitable for the investor.  Brokers that fail to perform the necessary due diligence prior to recommending them to clients could be liable for investment losses.

To determine whether you may be able to recover investment losses incurred in Primera Energy please contact The White Law Group at (888)637-5510.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. Visit our homepage to learn more about the firm.