PRIVILEGED AND CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006
Telephone: (202) 555-7100 Facsimile: (202) 555-7101 www.calderwoodharkness.com
June 15, 2022
VIA EMAIL AND U.S. MAIL
Catherine Blackthorn, Esq. Blackthorn & Associates LLP 700 Louisiana Street, Suite 4300 Houston, TX 77002
Re: Representation of Gerald Fisk, Former Chief Compliance Officer, Dunmore Energy Holdings Ltd. — U.S. Department of Justice Inquiry; Calderwood & Harkness Matter No. 1016-00009
Dear Ms. Blackthorn:
We write in reference to the notification received by this office on or about June 10, 2022, advising that Blackthorn & Associates LLP has been retained to represent Gerald Fisk in his personal capacity in connection with the pending inquiry by the U.S. Department of Justice involving Dunmore Energy Holdings Ltd. and its subsidiaries. We understand that this retention was effectuated on or about the same date as Mr. Fisk's departure from Dunmore Energy Holdings Ltd. The purpose of this letter is to formally acknowledge Blackthorn & Associates' representation of Mr. Fisk, to clarify the relationship between our respective clients, and to establish clear protocols and limitations regarding information sharing and communications going forward.
As you are aware, Calderwood & Harkness LLP represents Dunmore Energy Holdings Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands, with operational headquarters located at 1200 McKinney Street, Suite 3400, Houston, Texas 77010, together with its subsidiaries, including Dunmore Trading International Ltd., a company organized under the laws of the United Arab Emirates and based in Dubai, UAE (collectively, "Dunmore" or the "Company"). Our representation encompasses the DOJ National Security Division's investigation referenced above, and all related matters, including the Company's comprehensive internal investigation and response to government process.
I. Background of the Matter
By way of brief background, and to ensure that there is a common understanding of the procedural posture of this matter, we note the following. On April 19, 2022, the National Security Division of the U.S. Department of Justice, through the Counterintelligence and Export Control Section, opened an inquiry concerning potential violations of U.S. sanctions laws, including programs administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury, as well as potential violations of applicable export control regulations. The investigation was initiated in connection with grand jury subpoena GJ No. 22-418, issued by the U.S. District Court for the District of Columbia (Grand Jury 22-2) on April 19, 2022, directing the production of documents and records from Dunmore Energy Holdings Ltd. and its subsidiaries.
The DOJ team assigned to this matter is led by Assistant U.S. Attorney Meredith Calloway, together with Trial Attorneys Samuel Kovacs and Diana Pressman. We have been in regular communication with the DOJ team since our retention.
Calderwood & Harkness was retained by Dunmore on April 14, 2022, to conduct a comprehensive internal investigation into the matters at issue, to respond to the grand jury subpoena and any further DOJ process, and to represent Dunmore's corporate interests in connection with the investigation and any resulting proceedings. Our engagement encompasses the full scope of the Company's response to the government's inquiry, including document collection and production, witness interviews, analysis of trading records and compliance protocols, and strategic advice regarding the Company's cooperation posture.
The investigation concerns, among other things, activities conducted at Dunmore Trading International Ltd.'s Dubai-based trading desk during the period from approximately March 2020 through April 2022. Specifically, the DOJ's inquiry, and Calderwood & Harkness's parallel internal investigation, are focused on transactions involving Petronova Trading FZE, Volkhov Industrial Group JSC, Zenith Petroleum DMCC, and Caspian Logistik GmbH, as well as the compliance frameworks and supervisory controls governing those transactions. The scope of the investigation may expand as additional facts are developed, and we reserve the right to supplement this description as appropriate.
II. Acknowledgment of Representation of Gerald Fisk
Calderwood & Harkness formally acknowledges that Blackthorn & Associates LLP now represents Gerald Fisk in his personal capacity in connection with the DOJ inquiry described above. We understand that Mr. Fisk served as Chief Compliance Officer of Dunmore Energy Holdings Ltd., based at the Company's Houston, Texas offices, until his departure from the Company on June 10, 2022.
We wish to state clearly, for the avoidance of any doubt, that Calderwood & Harkness LLP does not represent, and has never at any time represented, Mr. Fisk in his individual or personal capacity. Calderwood & Harkness's sole client in connection with this matter is Dunmore Energy Holdings Ltd. and its corporate subsidiaries. No attorney-client relationship exists, or has at any time existed, between Calderwood & Harkness and Mr. Fisk in his personal capacity, and nothing in this letter or in our prior interactions with Mr. Fisk should be construed to create, or to have created, any such relationship.
In this regard, we note that the Upjohn corporate counsel warning was administered to Mr. Fisk at the outset of his interview conducted on June 8, 2022, in the offices of Calderwood & Harkness LLP in Washington, D.C. That interview was conducted by the undersigned, Victoria Chambers, and we note that you, Catherine Blackthorn, were present during the interview as Mr. Fisk's personal counsel. At the commencement of the interview, Mr. Fisk was expressly advised of the following:
(a) Calderwood & Harkness LLP represents Dunmore Energy Holdings Ltd. and its subsidiaries, and not Mr. Fisk individually;
(b) The attorney-client privilege attaching to the substance of the interview and any communications during the interview belongs to Dunmore Energy Holdings Ltd. as the corporate client, and may be waived by Dunmore at its sole discretion, including by disclosure to the Department of Justice or any other third party; and
(c) Mr. Fisk had the right to retain personal counsel to represent his individual interests, and was encouraged to do so.
Mr. Fisk acknowledged that he understood each of these admonitions, and you, as his personal counsel, confirmed that you had independently advised Mr. Fisk of the same. The interview thereafter proceeded on that basis. We maintain detailed records of the Upjohn warnings administered to Mr. Fisk, and those records confirm the foregoing.
III. Potential Adverse Interests
We believe it is important to address directly the potential for divergent or adverse interests between Dunmore and Mr. Fisk as this matter progresses. As you are undoubtedly aware, the nature of the DOJ's inquiry, as well as the scope of Calderwood & Harkness's internal investigation on behalf of the Company, raises the possibility that the interests of Dunmore and Mr. Fisk may diverge, or may become materially adverse, as the facts continue to develop.
In particular, the internal investigation being conducted by Calderwood & Harkness on behalf of Dunmore includes a thorough examination of the compliance failures and supervisory deficiencies that may have occurred during Mr. Fisk's tenure as Chief Compliance Officer. Among the issues under review are the adequacy of the OFAC screening protocols that were implemented and maintained under Mr. Fisk's supervision, the failure to escalate certain red flags related to transactions with Petronova Trading FZE that were identified by subordinate compliance personnel, and the oversight — or lack thereof — of the Dubai-based trading desk operated by Dunmore Trading International Ltd. These are matters that bear directly on Mr. Fisk's individual conduct and performance in his role as Chief Compliance Officer, and it is therefore foreseeable that Dunmore's corporate interests and Mr. Fisk's personal interests may not remain aligned.
Calderwood & Harkness is obligated to prioritize and protect Dunmore's corporate interests above all others. This letter is intended to establish clear and unambiguous boundaries regarding information sharing, communications, and the respective roles of our firms, so as to protect the interests of all parties, to preserve applicable privileges, and to ensure compliance with our respective ethical obligations.
IV. Information-Sharing Limitations and Protocols
Given the foregoing, and in light of the potential for adverse interests between Dunmore and Mr. Fisk, we wish to establish the following limitations and protocols regarding information sharing between our respective clients and firms.
A. No Sharing of Attorney Work Product or Privileged Communications
Calderwood & Harkness will not share with Blackthorn & Associates LLP, Mr. Fisk, or any other representative of Mr. Fisk, any attorney-client privileged communications, attorney work product, or internal investigation findings, memoranda, analyses, or conclusions prepared for, at the direction of, or on behalf of Dunmore Energy Holdings Ltd. or any of its subsidiaries.
This limitation applies without limitation to the following categories of materials:
(i) Memoranda of witness interviews conducted by Calderwood & Harkness attorneys in connection with the internal investigation (other than Mr. Fisk's own interview, to the extent that Mr. Fisk's individual rights may apply with respect to the substance of his own statements, which is a matter we reserve for further analysis);
(ii) Forensic accounting reports, analyses, and workpapers prepared by Ridgeline Advisory Group LLC, which has been retained by Calderwood & Harkness on behalf of Dunmore to analyze trading records, financial flows, and related transactional data in connection with the internal investigation;
(iii) E-discovery analyses, data processing reports, and technology-assisted review protocols developed by Nexagen Analytics Inc., which has been retained by Calderwood & Harkness on behalf of Dunmore to manage the collection, processing, review, and production of electronically stored information;
(iv) Legal memoranda, research analyses, strategic assessments, and advisory communications prepared by Calderwood & Harkness attorneys in connection with the internal investigation or the DOJ inquiry;
(v) Any draft or final versions of internal investigation reports, whether in written, oral, or any other form; and
(vi) Any other materials, in whatever form, that constitute or reflect attorney-client privileged communications or attorney work product prepared in connection with Calderwood & Harkness's representation of Dunmore.
We wish to emphasize that the comprehensive internal investigation being conducted by Calderwood & Harkness on behalf of Dunmore is protected by the attorney-client privilege and the work-product doctrine. The attorney-client privilege with respect to the internal investigation and all communications made in connection therewith belongs exclusively to Dunmore Energy Holdings Ltd. as the corporate client. Dunmore has not waived, and does not intend to waive by this letter, any applicable privilege or protection. Any decision regarding the waiver of privilege is reserved to Dunmore in its sole discretion, subject to the advice of counsel.
B. No Common Interest Agreement with Mr. Fisk
For the avoidance of doubt, we wish to confirm that there is no common interest agreement, joint defense agreement, or any similar arrangement between Dunmore Energy Holdings Ltd. (or any of its subsidiaries) and Mr. Fisk. No such agreement has existed at any time, and none is contemplated at this time.
We note, for completeness, that a Joint Defense / Common Interest Agreement dated April 25, 2022, exists among Dunmore Energy Holdings Ltd., Greystone Capital Partners Fund IV, L.P., and Thornbury Infrastructure Fund II, L.P. That agreement was entered into among those parties in connection with the DOJ inquiry and related matters, and its terms are confidential. Mr. Fisk is not a party to that agreement, has never been a party to that agreement, and will not be added as a party to that agreement.
Given the potential for adverse interests between Dunmore and Mr. Fisk, as discussed in Section III above, no common interest or joint defense agreement between Dunmore and Mr. Fisk is contemplated at the present time. Should circumstances change, the parties may revisit this issue, but any such agreement would require the express written consent of all parties, and would need to be carefully structured to address the potential for conflicting interests.
C. Limitation on Document Sharing
Calderwood & Harkness will not provide Mr. Fisk or Blackthorn & Associates LLP access to documents collected, reviewed, or produced in connection with the DOJ subpoena response, except as may be strictly required by applicable law or by order of a court of competent jurisdiction.
We note specifically that documents produced to the Department of Justice pursuant to grand jury subpoena GJ No. 22-418, which have been Bates-stamped with the prefix "DEH-DOJ" (e.g., DEH-DOJ-000001 through the current final production number), are produced on behalf of Dunmore Energy Holdings Ltd. and its subsidiaries. These productions are not made on behalf of any individual, including Mr. Fisk. The documents collected and produced in response to the grand jury subpoena are the property of Dunmore, and the decision regarding their production was made by the Company in consultation with Calderwood & Harkness.
Any request by Mr. Fisk or Blackthorn & Associates LLP for access to Dunmore documents or records — whether documents that were within Mr. Fisk's custody or control during his employment, documents that he authored or received, or any other Company records — must be directed to Dunmore's General Counsel, Marcus Wellbourne, Esq., at Dunmore Energy Holdings Ltd., 1200 McKinney Street, Suite 3400, Houston, TX 77010. Such requests will be evaluated by Mr. Wellbourne and Calderwood & Harkness on a case-by-case basis, taking into account Dunmore's interests, applicable privileges, and any legal obligations.
We recognize that Mr. Fisk may have certain rights with respect to documents relating to his own employment, and we will address any such requests in good faith and in accordance with applicable law. However, access to the broader universe of documents collected in connection with the internal investigation and DOJ subpoena response cannot be granted absent a compelling legal basis.
D. Communications Protocol
To ensure orderly and appropriate communications between our respective firms, we propose the following protocol:
1. All communications from Blackthorn & Associates LLP regarding the DOJ inquiry, the internal investigation, or any matters relating to Mr. Fisk's former role at Dunmore Energy Holdings Ltd. should be directed to the undersigned, Victoria Chambers, at Calderwood & Harkness LLP's Washington, D.C. office (1750 Pennsylvania Avenue NW, Suite 800, Washington, DC 20006; telephone: (202) 555-7100; email: vchambers@calderwoodharkness.com), with a courtesy copy to Jasmine Thornton, Lead Associate (jthorn@calderwoodharkness.com).
2. Mr. Fisk should not contact current employees of Dunmore Energy Holdings Ltd. or any of its subsidiaries directly to discuss any matters related to the DOJ inquiry, the internal investigation, his former role at the Company, or any subject matter that may be relevant to the investigation. Any request for communications with current Dunmore employees must be channeled through counsel — specifically, through Blackthorn & Associates to Calderwood & Harkness — and will be evaluated on a case-by-case basis.
3. Calderwood & Harkness will similarly direct any communications regarding Mr. Fisk to Blackthorn & Associates LLP and will not contact Mr. Fisk directly without prior notice to, and consent of, his counsel. In the event that Calderwood & Harkness needs to communicate with Mr. Fisk regarding any matter, we will contact Blackthorn & Associates in the first instance.
We believe this protocol is consistent with applicable ethical rules and will serve to protect the interests of both Dunmore and Mr. Fisk. We ask that you confirm your agreement to the foregoing communications protocol in writing at your earliest convenience.
V. Indemnification and Advancement of Defense Costs
We wish to address the matter of Mr. Fisk's indemnification and the advancement of defense costs incurred in connection with his personal representation in this matter.
Calderwood & Harkness acknowledges that Dunmore Energy Holdings Ltd. has indemnification and advancement obligations with respect to Mr. Fisk's defense costs arising out of or related to the DOJ inquiry, pursuant to applicable provisions of Dunmore's organizational documents — specifically, the Company's articles of association, as adopted and amended under the laws of the Cayman Islands — as well as the terms of Mr. Fisk's employment agreement with the Company, dated March 2, 2018, as amended on January 15, 2020.
These indemnification and advancement obligations are being analyzed by Calderwood & Harkness on behalf of Dunmore, and we reference in this regard the memorandum dated May 5, 2022, prepared by Jasmine Thornton on indemnification obligations applicable to officers and former officers of the Company (the "Indemnification Memorandum"), which addresses, among other things, the scope and conditions of the Company's advancement obligations under Cayman Islands law and the terms of Mr. Fisk's employment agreement.
Based on our analysis to date, and subject to the Company's continued review, Dunmore intends to honor its advancement obligations in accordance with applicable law and the terms of the relevant contractual provisions. Such advancement will be subject to customary undertakings by Mr. Fisk to repay any amounts advanced by the Company if it is ultimately determined, by final adjudication or otherwise, that Mr. Fisk is not entitled to indemnification under applicable law or the terms of his employment agreement or the Company's organizational documents. We anticipate that a formal undertaking agreement will be circulated to Blackthorn & Associates for Mr. Fisk's execution in the near term, and we ask that you advise us of any concerns regarding such undertaking at your earliest convenience.
With respect to the practicalities of the advancement process, invoices for Mr. Fisk's personal legal fees and expenses should be submitted to Dunmore's General Counsel, Marcus Wellbourne, Esq., at Dunmore Energy Holdings Ltd., 1200 McKinney Street, Suite 3400, Houston, TX 77010, for processing in accordance with the Company's standard procedures. We note that the Company reserves the right to review such invoices for reasonableness and to request additional detail as appropriate, consistent with its obligations.
We wish to state clearly that the advancement of defense costs by Dunmore does not constitute, and should not be construed as, an admission by the Company regarding Mr. Fisk's ultimate entitlement to indemnification on the merits, nor does it constitute an acknowledgment of the propriety or reasonableness of any particular expenditure. Furthermore, the advancement of defense costs does not create, and should not be construed to create, an attorney-client relationship between Calderwood & Harkness LLP and Mr. Fisk, or any fiduciary obligation on the part of Calderwood & Harkness running to Mr. Fisk.
Finally, we note for your awareness that any separation payments or other post-termination compensation that may be payable to Mr. Fisk under his employment agreement or any related arrangements are being handled through Commonwealth Trust Company, located in Wilmington, Delaware, which serves as escrow agent for such payments. The terms and conditions of any such separation payments are governed by the applicable agreements and are separate and distinct from, and should not be conflated with, the advancement of defense costs addressed above. Any inquiries regarding separation payments should likewise be directed to Mr. Wellbourne.
VI. D&O Insurance
For Blackthorn & Associates' awareness, and without any obligation on our part to provide insurance-related advice to Mr. Fisk, we note the following regarding Dunmore's directors' and officers' liability insurance coverage.
Dunmore Energy Holdings Ltd. maintains a directors' and officers' liability insurance policy with Garrison Mutual Insurance Co. (Policy No. GM-DO-2021-08734). The policy provides aggregate coverage of $50 million, subject to a per-claim limit of $10 million and a retention (deductible) of $2.5 million. The policy covers current and former directors and officers of the Company, subject to its terms, conditions, and exclusions.
A claim has been submitted by Dunmore to Garrison Mutual in connection with the DOJ inquiry. The claim is being administered by Garrison Mutual's designated claims adjuster, Patricia Holbrook.
Mr. Fisk may have independent rights under the D&O policy as a former officer of Dunmore Energy Holdings Ltd. We encourage Blackthorn & Associates to conduct its own independent assessment of Mr. Fisk's coverage rights under the policy and to submit any separate notice of claim on Mr. Fisk's behalf directly to Garrison Mutual Insurance Co. at the following address:
Garrison Mutual Insurance Co.
Attn: Claims Department
Cedar House, 41 Cedar Avenue Hamilton HM 12, Bermuda
Calderwood & Harkness does not represent Mr. Fisk with respect to any claim under the D&O policy, and we express no opinion regarding Mr. Fisk's rights or entitlements under the policy. We provide the foregoing information solely as a courtesy.
VII. Preservation of Rights
Nothing in this letter constitutes, or should be construed to constitute, a waiver of any rights, privileges, claims, defenses, or remedies of Dunmore Energy Holdings Ltd. or any of its subsidiaries, whether arising under contract, statute, common law, equity, or otherwise.
Dunmore Energy Holdings Ltd. expressly reserves all of its rights, including without limitation any claims that it may have against Mr. Fisk arising out of or related to his tenure as Chief Compliance Officer of the Company, whether for breach of fiduciary duty, breach of contract, negligence, contribution, indemnification, or otherwise. The reservation of rights set forth in this paragraph is not intended to be, and should not be construed as, an assertion that any such claims exist or will be pursued; rather, it is intended to preserve the Company's rights in full pending the completion of the investigation and a full assessment of the facts.
This letter does not create any obligation on the part of Dunmore Energy Holdings Ltd., Calderwood & Harkness LLP, or any of their respective affiliates, partners, officers, employees, or agents beyond what is expressly set forth herein. Except as expressly stated in this letter, no representations, warranties, or commitments of any kind are made or implied.
VIII. Request for Confirmation
We respectfully request that you confirm in writing the following at your earliest convenience:
1. Your receipt of this letter and your acknowledgment of the matters set forth herein;
2. Your agreement to the communications protocol set forth in Section IV.D above;
3. The scope of Blackthorn & Associates' representation of Mr. Fisk — specifically, whether your representation is limited to the DOJ National Security Division inquiry, or whether it extends to other potential proceedings, including without limitation any enforcement action by OFAC, any proceedings before other regulatory bodies, or any potential civil claims that may arise in connection with the matters under investigation; and
4. A current mailing address, telephone number, and email address for Blackthorn & Associates LLP, to be used for service of any future notices, correspondence, or process in connection with this matter.
A written response within ten (10) business days of your receipt of this letter would be appreciated.
IX. Closing
We recognize that the circumstances giving rise to this letter are complex, and we are committed to conducting ourselves in a manner consistent with our respective ethical obligations and the interests of our clients. To the extent consistent with Dunmore's interests and our obligations as counsel to the Company, Calderwood & Harkness is prepared to cooperate with Blackthorn & Associates in an orderly and professional manner as this matter proceeds.
Should you have any questions regarding the protocols and limitations outlined in this letter, or should you wish to discuss any aspect of this correspondence, please do not hesitate to contact me directly at (202) 555-7100 or vchambers@calderwoodharkness.com. I am available to discuss these matters at your convenience.
We appreciate your attention to this letter and look forward to your prompt response.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Victoria Chambers Partner, White Collar & Investigations 1750 Pennsylvania Avenue NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7100
Email: vchambers@calderwoodharkness.com
cc: (via email)
Marcus Wellbourne, Esq., General Counsel, Dunmore Energy Holdings Ltd.
Howard Quinn, Partner, Calderwood & Harkness LLP (Billing Partner)
Jasmine Thornton, Associate, Calderwood & Harkness LLP (Lead Associate)