Dear Ms. Holbrook,
I am a partner in the White Collar & Investigations practice at Calderwood & Harkness LLP, 450 Lexington Avenue, 38th Floor, New York, NY 10017. I write on behalf of our client, Dunmore Energy Holdings Ltd. ("Dunmore" or "DEH"), an exempted company incorporated with limited liability in the Cayman Islands (Company Registration No. MC-334821), with operational headquarters at 1200 McKinney Street, Suite 3400, Houston, TX 77010.
The purpose of this correspondence is to provide formal notice of a claim under Directors & Officers Liability Insurance Policy No. GM-DO-2021-08734 (the "Policy"), issued by Garrison Mutual Insurance Co. (head office: Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda). As you are aware, the Policy provides aggregate limits of $50 million, with a per-claim limit of $10 million and a self-insured retention ("SIR") of $2.5 million. We respectfully request that Garrison Mutual acknowledge receipt of this claim and confirm coverage for defense costs in accordance with the Policy terms.
**I. Description of the Underlying Matter**
On April 19, 2022, the U.S. Department of Justice ("DOJ"), National Security Division, Counterintelligence and Export Control Section, opened an inquiry into Dunmore concerning potential violations of U.S. sanctions laws — including programs administered by the Office of Foreign Assets Control ("OFAC") — and export control regulations.
In connection with that inquiry, a grand jury subpoena, GJ No. 22-418, was issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2) on April 19, 2022, directed to Dunmore Energy Holdings Ltd. The subpoena was served via Dunmore's registered agent in Houston, Texas. The original return date of May 19, 2022 has been extended by agreement with the DOJ to July 19, 2022.
The inquiry arises principally from activities conducted through Dunmore Trading International Ltd. ("DTI"), a wholly owned subsidiary of DEH operating from Level 14, Gate Building 3, Dubai International Financial Centre, Dubai, UAE (DIFC License No. CL-4827). The conduct at issue involves transactions occurring between approximately March 2020 and April 2022 related to crude oil swap transactions, oilfield equipment exports, and associated payment flows involving counterparties with alleged ties to Volkhov Industrial Group JSC ("Volkhov"), a Russian industrial conglomerate. Volkhov was designated by OFAC under Directive 2, Executive Order 13662, on November 15, 2019 and was subsequently added to the Specially Designated Nationals and blocked Persons List ("SDN List") pursuant to Executive Order 14024 on April 6, 2022.
The counterparties specifically named in the grand jury subpoena include:
- Petronova Trading FZE - Zenith Petroleum DMCC - Caspian Logistik GmbH
The applicable criminal statutes referenced in connection with the inquiry include the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706, and the Export Control Reform Act ("ECRA"), 50 U.S.C. §§ 4801–4852.
The lead prosecutor assigned to the matter is Assistant U.S. Attorney Meredith Calloway, DOJ National Security Division, with additional trial attorneys Samuel Kovacs and Diana Pressman of the Counterintelligence and Export Control Section. The FBI case agent is Special Agent Paul Reinhardt.
**II. Individuals Potentially Covered Under the Policy**
The following current and former directors and officers of Dunmore and its subsidiaries are, or may become, subjects of the government inquiry and may seek coverage for defense costs under the Policy:
(a) Callum Renshaw — Chief Executive Officer, Dunmore Energy Holdings Ltd.
(b) Derek Hargrave — President, Dunmore Trading International Ltd. We note that Mr. Hargrave may retain separate personal counsel, and associated defense cost submissions may follow.
(c) Natasha Sorokin — Senior Trader, DTI. Ms. Sorokin was placed on administrative leave effective May 16, 2022. We understand that Ms. Sorokin may engage personal counsel, Philip Keane of Wexford Keane LLP, Washington, D.C., and that separate defense cost claims may be submitted in due course.
(d) Gerald Fisk — Chief Compliance Officer, DEH. Mr. Fisk's personal counsel, Catherine Blackthorn of Blackthorn & Associates LLP, Houston, TX, is expected to submit defense cost claims on his behalf.
(e) Sandra Whitfield — Chief Financial Officer, Dunmore Energy Holdings Ltd.
(f) Marcus Wellbourne — General Counsel, Dunmore Energy Holdings Ltd.
(g) Omar Al-Rashidi — Head of Middle East Operations, DTI.
(h) Yves Leclerc — Director of Logistics & Shipping, DTI.
(i) Rajesh Malhotra — Controller, DTI.
(j) Tobias Engel — Managing Director, Dunmore Renewables GmbH.
We note that Dunmore has indemnification and advancement obligations to certain of these individuals under Cayman Islands law and the company's articles of association. Defense costs for individuals who retain separate counsel may be advanced by Dunmore and submitted to Garrison Mutual for reimbursement in accordance with the terms of the Policy.
**III. Calderwood & Harkness Retention Details**
Calderwood & Harkness LLP was retained by Dunmore on April 14, 2022 (Matter No. 1016-00009). Victoria Chambers, a partner in our Washington, D.C. office (1750 Pennsylvania Avenue NW, Suite 800, Washington, DC 20006), serves as the responsible partner on the engagement. I serve as billing partner. The scope of our engagement encompasses the internal investigation, the response to the DOJ grand jury subpoena, and the defense of Dunmore in the government inquiry.
In addition, the following advisors have been retained at the direction of counsel, and coverage for their fees and expenses is also sought under the Policy:
- **Ridgeline Advisory Group LLC** (Washington, D.C.) — forensic accounting consultant, retained May 2, 2022 (Engagement No. RAG-2022-0319). The engagement lead is Dr. Margaret Liu.
- **Nexagen Analytics Inc.** (New York, NY) — e-discovery and document review vendor, retained April 2022 (Project No. NX-DEH-2204). The project manager is Brian Cavanaugh.
**IV. Claim for Defense Costs**
This claim encompasses defense costs incurred and to be incurred in connection with the DOJ inquiry, including:
(a) Calderwood & Harkness LLP legal fees and expenses;
(b) Forensic accounting fees and expenses of Ridgeline Advisory Group LLC;
(c) E-discovery and document review costs of Nexagen Analytics Inc.; and
(d) Defense costs of individual directors and officers who retain separate personal counsel, to the extent advanced by Dunmore under its indemnification obligations and submitted for reimbursement under the Policy.
Given the scope and complexity of this matter, the $2.5 million self-insured retention has been exceeded or is expected to be exceeded imminently. The investigation involves document collection across six jurisdictions (Cayman Islands, UAE, United States, Germany, Nigeria, and the United Kingdom), the review of an estimated two million or more documents, and witness interviews of dozens of current and former employees of Dunmore and its subsidiaries.
We respectfully request that Garrison Mutual confirm that it acknowledges receipt of this claim and will provide coverage for defense costs in accordance with the Policy terms and conditions.
We note that any disgorgement payments, fines, or penalties that may ultimately be assessed — should the matter reach that stage — are understood to fall outside the scope of defense cost coverage under the Policy. Dunmore expressly reserves the right, however, to present arguments regarding coverage for other categories of loss as the matter develops and the nature and scope of any potential exposure becomes clearer.
**V. Attachments**
Enclosed with this submission, please find the following documents:
1. Copy of Grand Jury Subpoena GJ No. 22-418 (redacted as appropriate to account for grand jury secrecy obligations); 2. Copy of Calderwood & Harkness LLP's engagement letter dated April 14, 2022; 3. Summary of defense costs incurred to date (through May 31, 2022); and 4. Copy of D&O Policy No. GM-DO-2021-08734 (included for ease of reference).
**VI. Requests and Next Steps**
We respectfully request the following:
(a) That Garrison Mutual assign a claims adjuster to this matter and confirm coverage in writing at its earliest convenience.
(b) That you advise whether you will serve as the designated claims adjuster for this matter or whether the claim will be reassigned to another member of your team.
(c) That we schedule a call at a mutually convenient time to discuss applicable billing guidelines, reporting requirements, and any panel counsel or rate approval protocols that Garrison Mutual may require.
My direct contact information is provided below. Please direct all communications regarding this claim to my attention, with copies to Victoria Chambers (vchambers@calderwoodharkness.com) and Marcus Wellbourne, General Counsel of Dunmore Energy Holdings Ltd. (mwellbourne@dunmoreenergy.com).
**VII. Confidentiality and Privilege**
The information contained in this communication and its attachments is confidential and is provided solely for purposes of this insurance claim submission. This correspondence and the materials enclosed herewith are subject to all applicable privileges, including attorney-client privilege and the work product doctrine. Nothing in this submission is intended to constitute a waiver of any privilege. We respectfully request that Garrison Mutual treat all claim-related communications as confidential and refrain from disclosing any such communications or materials to third parties without the prior written consent of Dunmore and its counsel.
We appreciate your prompt attention to this matter and look forward to your response.
Very truly yours,
**Howard Quinn** Partner, White Collar & Investigations Calderwood & Harkness LLP 450 Lexington Avenue, 38th Floor New York, NY 10017 Tel: (212) 558-4200 Direct: (212) 558-4237 Email: hquinn@calderwoodharkness.com
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