1044-00007 · Client 1044 · Administration

matter-status-summary.docx DOCUMENT Litigation

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PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT — PREPARED IN ANTICIPATION OF LITIGATION

CALDERWOOD & HARKNESS LLP — MATTER STATUS SUMMARY

MATTER IDENTIFICATION

This Matter Status Summary is an internal work-product document prepared by Calderwood & Harkness LLP ("C&H") for the exclusive use of the professionals staffed on the above-referenced matter. It is intended to provide a comprehensive, single-source reference for all material factual, financial, and procedural information bearing on the current posture of the engagement. This summary is protected by the attorney-client privilege and the work-product doctrine and should not be disclosed to any person outside of C&H without the express prior authorization of the Responsible Partner. All information is current as of the date indicated in the administrative block at the conclusion of this document unless otherwise noted.

ENGAGEMENT STATUS

ENGAGEMENT OPENED: June 30, 2022

CURRENT STATUS: DORMANT (since September 30, 2022)

REASON FOR DORMANCY: The client has not completed the document production requested in the Document Request Letter of August 8, 2022 (Doc 4). Only a partial production of approximately 340 pages was received on September 2, 2022. The controlling shareholder of Thalassa Shipping & Logistics SA, Nikolaos Karavelis (Chairman of the Board and holder of approximately 68% of TSL's outstanding equity), directly requested that all external legal spend on this matter be paused pending the completion of an internal budget review at the parent company level. Mr. Karavelis communicated this request through General Counsel Dimitra Karavelis-Stavrou during a telephone call with Victoria Chambers on September 28, 2022. C&H memorialized the dormancy in a Hold-Status Letter dated September 30, 2022 (Doc 6), which expressly noted that the passage of time would not eliminate or reduce the legal risks identified in the Interim Status Memorandum of September 12, 2022 (Doc 5) and that certain time-sensitive deadlines would continue to run during the dormancy period.

NEXT TICKLER: December 1, 2022 (60-day follow-up) — Completed. A follow-up email was transmitted to Dimitra Karavelis-Stavrou on December 1, 2022 (Doc 11). As of the date of this summary, no substantive response has been received. Ms. Karavelis-Stavrou acknowledged receipt of the email and indicated that Mr. Karavelis would be "reviewing the situation after the holidays."

SUBSEQUENT TICKLER: March 1, 2023 (90-day follow-up). This date also coincides with the effective date through which the Goldenshore Maritime Consultants Ltd. Agency Agreement will auto-renew if notice of non-renewal was not provided by December 1, 2022. As set forth in the Key Risk Factors section below, C&H recommended in the Interim Status Memorandum that TSL deliver notice of non-renewal prior to the December 1, 2022 deadline. As of this writing, C&H has not been informed whether such notice was delivered. This issue should be raised at the earliest opportunity upon reactivation of the matter or, if warranted, by separate communication to the client prior to the March 1, 2023 tickler.

FEES AND BILLING

The outstanding accounts receivable amount of $27,500 pertains to the September 2022 billing cycle, which was the final active billing period prior to the matter being placed on dormant status. The invoice was transmitted to Dimitra Karavelis-Stavrou on October 3, 2022, with a net-30 payment term. As of October 31, 2022, the invoice had not been paid. The Billing Partner, Howard Quinn, has been advised and has authorized one additional follow-up communication before escalation to the firm's collections protocol. The 60-day follow-up email of December 1, 2022 (Doc 11) included a reminder regarding the outstanding balance. No payment has been received as of the date of this summary.

The fee estimate range of $400,000–$600,000 was developed in the Preliminary Scoping Memorandum (Doc 3) and is predicated on a number of assumptions, including: (i) client cooperation and timely document production; (ii) the voluntary self-disclosure pathway being pursued, rather than a response to a government subpoena or formal investigation; (iii) no contested enforcement proceedings; and (iv) reasonable scope of forensic accounting review. The extended dormancy period introduces additional risk that these assumptions may no longer hold, and the estimate should be revisited upon reactivation.

Third-party cost estimates reflect preliminary scoping conversations with Northpoint Forensic Advisors LLC and the three identified local counsel firms. Northpoint has been formally retained pursuant to a sub-engagement letter dated August 15, 2022, but its work has not been activated. No fees have been incurred with Northpoint to date. Local counsel in Greece (Papadakis & Lekkas LLP) and Nigeria (Okafor Bassey & Partners) have been identified and have conducted preliminary conflicts checks, but neither firm has been formally retained. Dossou & Mensah Avocats in Abidjan was consulted informally regarding Ivorian anti-corruption law and local procedural requirements; a consultation memorandum was prepared (Doc 9), but no formal engagement has been entered into.

RELATED ENTITIES

The following entities are connected to this matter. Each entry includes the entity's full legal name, short name or abbreviation used in matter documents, role in the matter, entity type, and address.

1. Thalassa Shipping & Logistics SA ("TSL")

• Role: Client

• Entity Type: Société Anonyme (Greek law)

• Address: 14 Poseidonos Avenue, Piraeus 185 31, Greece

• Description: TSL is the parent entity of the Thalassa group and the direct client in this engagement. TSL operates a fleet of dry-bulk carriers primarily serving West African ports and is the contracting party under the Goldenshore Agency Agreement and the Meridian Atlantic revolving credit facility. TSL is a privately held company; Nikolaos Karavelis holds approximately 68% of its outstanding equity.

2. Thalassa West Africa SARL ("TWA")

• Role: Subsidiary of TSL

• Entity Type: Société à Responsabilité Limitée (Ivorian law)

• Address: Rue des Lagunes 27, Zone Portuaire, Abidjan, Côte d'Ivoire

• Description: TWA is TSL's wholly owned Ivorian subsidiary and serves as the primary operating entity for TSL's port-calling activities in Côte d'Ivoire. TWA is the entity through which the majority of the port-facilitation payments at issue in this review were processed. TWA maintains its primary operating bank account at Banque Equatoriale de Commerce SA in Abidjan. Key personnel include Managing Director Cédric Anouma, Finance Manager Yves Kouadio, and Operations Coordinator Adama Coulibaly.

3. Thalassa Nigeria Limited ("TNL")

• Role: Subsidiary of TSL

• Entity Type: Private Limited Company (Nigerian law)

• Address: 5B Apapa-Oshodi Expressway, Apapa, Lagos, Nigeria

• Description: TNL is TSL's wholly owned Nigerian subsidiary and manages port-calling activities at the Port of Apapa and Tin Can Island Port in Lagos. Preliminary review suggests that TNL's exposure to the port-facilitation payment scheme is more limited than TWA's, but certain transactions routed through Goldenshore may implicate TNL operations. The Country Manager is Emeka Obiora.

4. Goldenshore Maritime Consultants Ltd. ("Goldenshore")

• Role: Third-party port agent

• Entity Type: Limited Company (Ghanaian law)

• Address: 12 Independence Avenue, Tema New Town, Tema, Ghana

• Description: Goldenshore is the third-party port agent retained by TSL under an Agency Agreement dated March 1, 2018, to provide port-clearance, customs-facilitation, and logistics-coordination services at West African ports, principally Abidjan and Lagos. Goldenshore is the primary conduit through which the "expediting fees" at issue in this review were paid. The principal and sole named director is Kofi Mensah Asante. As described in the Key Risk Factors section, Moussa Diallo, who holds a 40% equity interest in Goldenshore as a silent partner, is the brother-in-law of Captain Ibrahim Touré, the Director of Port Operations at the Port Autonome d'Abidjan. This relationship was not disclosed to TSL at the time of contract execution or at any subsequent point. The Goldenshore Agency Agreement contains a 90-day notice provision for non-renewal, with a renewal date of March 1 of each year; the notice deadline for the current cycle was December 1, 2022.

5. Meridian Atlantic Bank, National Association ("Meridian Atlantic" or "MAB")

• Role: Lender / Agent bank on TSL's revolving credit facility

• Entity Type: National Association (U.S. federal banking charter)

• Address: 383 Madison Avenue, New York, NY 10179

• Description: Meridian Atlantic serves as the administrative agent and one of the lenders under TSL's $120 million senior secured revolving credit facility, dated as of April 12, 2021. The facility is governed by New York law. As of the date of dormancy, approximately $74 million was outstanding under the facility. Each draw on the facility requires the borrower to reaffirm certain representations and warranties, including an anti-corruption representation under Section 5.18 of the credit agreement. C&H's Credit Facility Anti-Corruption Covenant Analysis (Doc 8) concluded that the continued existence of the Goldenshore payment scheme at the time of any draw could constitute a breach of Section 5.18 and potentially trigger an Event of Default under Section 8.01(d). The facility matures on January 15, 2025. The key relationship contact at Meridian Atlantic is Gerald Fontaine, Managing Director, Shipping & Offshore Finance.

6. Banque Equatoriale de Commerce SA ("BEC")

• Role: TWA's operating bank in Côte d'Ivoire

• Entity Type: Société Anonyme (Ivorian law)

• Address: Abidjan, Côte d'Ivoire

• Description: BEC is the bank at which TWA maintains its primary operating account. Bank statements from BEC for the period March 2018 through the present are among the outstanding document requests that TSL has not yet fulfilled. These records are critical to tracing the flow of funds from TWA to Goldenshore and to identifying whether any payments were made directly to individuals affiliated with the Port Autonome d'Abidjan or other government entities.

7. Ashanti Continental Bank ("ACB")

• Role: Goldenshore's bank

• Entity Type: Banking institution (Ghanaian law)

• Address: Tema, Ghana

• Description: ACB is the bank at which Goldenshore maintains its principal operating account. Wire transfer records obtained in the partial production indicate that payments from TWA and TNL to Goldenshore were received into an ACB account. Certain payments from Goldenshore to unidentified third parties were also routed through ACB, but the ultimate beneficiaries of those payments have not been identified due to the incomplete state of the document production.

8. Northpoint Forensic Advisors LLC ("Northpoint")

• Role: Forensic accountants (retained but not activated)

• Entity Type: Limited Liability Company (Delaware)

• Address: 1700 K Street NW, Suite 600, Washington, DC 20006

• Description: Northpoint was retained under a sub-engagement letter dated August 15, 2022, to provide forensic accounting services in connection with this review. The scope of work, as contemplated in the Preliminary Scoping Memorandum (Doc 3), includes reconstruction of the payment flow from TSL and its subsidiaries through Goldenshore, identification of ultimate payment recipients, analysis of the commercial reasonableness of commissions and expediting fees, and quantification of potential gain/loss for purposes of penalty calculation under the FCPA. No work has been performed and no fees have been incurred to date, as activation was dependent on receipt of the complete document production from the client. The lead forensic accountant assigned to the matter is Sandra Bellingham, CPA, CFE.

9. Kouvalis & Demopoulos SA ("K&D")

• Role: TSL's statutory external auditor

• Entity Type: Société Anonyme (Greek law)

• Address: 10 Stadiou Street, Athens 105 62, Greece

• Description: K&D serves as the statutory external auditor for TSL and has issued unqualified audit opinions for TSL's consolidated financial statements for each fiscal year during the relevant period. The treatment of Goldenshore commissions and expediting fees in TSL's books and records — including whether such payments were properly characterized and disclosed in the audited financial statements — is a relevant area of inquiry. K&D has not been contacted by C&H and is not a party to the engagement.

10. Papadakis & Lekkas LLP ("P&L")

• Role: Greek local counsel

• Entity Type: Law Partnership (Greek law)

• Address: 28 Vasilissis Sofias Avenue, Athens 106 74, Greece

• Description: P&L has been identified as local counsel in Greece to advise on Greek anti-bribery and corporate governance law, as well as any implications arising under Greek data protection law (GDPR and implementing legislation) with respect to the document preservation and production process. A preliminary conflicts check has been completed. The lead partner is Stavros Lekkas. P&L has not been formally retained as of the date of this summary.

11. Okafor Bassey & Partners ("OB&P")

• Role: Nigerian local counsel

• Entity Type: Law Partnership (Nigerian law)

• Address: 4th Floor, Marina Towers, 22 Marina Street, Lagos Island, Lagos, Nigeria

• Description: OB&P has been identified as local counsel in Nigeria to advise on Nigerian anti-corruption law, including the Corrupt Practices and Other Related Offences Act, 2000, and to assist with any document collection or witness interview logistics in Lagos. A preliminary conflicts check has been completed. The lead partner is Ngozi Okafor. OB&P has not been formally retained as of the date of this summary.

12. Dossou & Mensah Avocats

• Role: Ivorian local counsel (consulted, not formally retained)

• Entity Type: Law Firm (Ivorian law)

• Address: Abidjan, Côte d'Ivoire

• Description: Dossou & Mensah Avocats was consulted informally in early October 2022 regarding Ivorian anti-corruption law, the legal status of "facilitation payments" under Ivorian law, and the operations of the Port Autonome d'Abidjan. A consultation memorandum was prepared by Liam Donahue based on these discussions (Doc 9). The lead contact is Amadou Dossou. No formal engagement has been entered into, and no engagement letter has been executed. If the matter is reactivated, a determination should be made as to whether formal retention is warranted.

13. Hartwell & Crane PLLC ("H&C")

• Role: Whistleblower's counsel

• Entity Type: Professional Limited Liability Company (District of Columbia law)

• Address: 1225 Connecticut Avenue NW, Suite 800, Washington, DC 20036

• Description: H&C represents the individual who filed the SEC whistleblower tip (TCR No. 2022-WB-08341) that prompted TSL's engagement of C&H. The identity of the whistleblower has not been confirmed, though circumstantial indicators suggest the individual has or had direct access to TWA or Goldenshore financial records. The lead attorney at H&C is Marcus Hartwell. C&H has had no direct communication with H&C. All information regarding the whistleblower tip was conveyed to C&H by TSL's General Counsel, Dimitra Karavelis-Stavrou, who was informed of the tip's existence by TSL's statutory auditors, K&D, in late June 2022.

KEY INDIVIDUALS (NON-C&H)

The following table identifies all individuals outside of Calderwood & Harkness LLP who are relevant to the matter, their organizational affiliation, and their role.

Notes on Key Individuals:

Nikolaos Karavelis is the controlling shareholder and the individual who authorized the retention of C&H. He is also the individual who directed that external legal spend be paused pending completion of an internal budget review, resulting in the current dormancy. Mr. Karavelis is not believed to have had direct knowledge of or involvement in the expediting fee payments, but this has not been confirmed through interview, as no witness interviews were conducted prior to dormancy.

Dimitra Karavelis-Stavrou is the daughter of Nikolaos Karavelis and serves as TSL's General Counsel and Chief Compliance Officer. She is the primary day-to-day contact for all C&H communications on this matter. Ms. Karavelis-Stavrou's dual role as General Counsel and CCO is noted as a governance concern in the Preliminary Scoping Memorandum (Doc 3), as it creates a potential conflict between her obligation to oversee the investigation and her reporting relationship to the controlling shareholder.

Cédric Anouma, Yves Kouadio, and Adama Coulibaly are the three TWA personnel most directly involved in the operational relationship with Goldenshore and the processing of expediting-fee payments. All three are priority interview subjects. The Upjohn Warning Script (Doc 10) was drafted in anticipation of interviews with these individuals, which were to be conducted in Abidjan. These interviews have not taken place.

Moussa Diallo's undisclosed 40% ownership interest in Goldenshore, and his familial relationship to Captain Ibrahim Touré, are central to the FCPA analysis. If Touré is a "foreign official" within the meaning of 15 U.S.C. § 78dd-1(f)(1)(A) — and as Director of Port Operations of the Port Autonome d'Abidjan, a government instrumentality, he almost certainly is — then payments to Goldenshore that inured to the benefit of Diallo, and through him potentially to Touré, may constitute prohibited payments under the FCPA anti-bribery provisions.

KEY RISK FACTORS

The following risk factors are identified as active and material as of the date of the most recent update to this summary. Each risk factor should be treated as a priority item for discussion upon reactivation of the matter.

• SEC Whistleblower Tip Pending. A whistleblower tip was filed with the Securities and Exchange Commission under TCR No. 2022-WB-08341. The tip was filed by an unidentified individual represented by Hartwell & Crane PLLC (Washington, DC). As of the date of dormancy (September 30, 2022), neither the Department of Justice nor the SEC had opened a formal investigation. However, the pendency of the tip creates a material risk that a formal investigation could be initiated at any time, including during the dormancy period, without notice to TSL or C&H. The passage of time since the tip was filed (approximately six months as of the date of this summary) does not eliminate this risk; SEC whistleblower tips are routinely held in queue for extended periods before action is taken.

• Undisclosed Government Affiliation of Goldenshore Beneficial Owner. Moussa Diallo, who holds a 40% equity interest in Goldenshore Maritime Consultants Ltd. as a silent partner, is the brother-in-law of Captain Ibrahim Touré, the Director of Port Operations at the Port Autonome d'Abidjan. This relationship was not disclosed to TSL at the time of execution of the Goldenshore Agency Agreement in March 2018 or at any subsequent point. The existence of this relationship transforms what might otherwise be characterized as arms-length commercial commissions into potential payments to a conduit for a foreign official, substantially heightening TSL's FCPA exposure. C&H became aware of this relationship through information provided by TSL's General Counsel, who indicated that the relationship was discovered by a TSL employee (believed to be Adama Coulibaly) in approximately April 2022.

• Expediting Fees May Not Have Been Suspended During Dormancy. In the Interim Status Memorandum of September 12, 2022 (Doc 5), C&H recommended that TSL immediately suspend all "expediting fee" payments to Goldenshore pending the outcome of the internal review. C&H has not received confirmation that this recommendation was implemented. If expediting-fee payments have continued during the dormancy period (October 2022 through the present), the aggregate exposure will have increased, and the evidentiary record of knowing continuation of potentially corrupt payments after being placed on notice will substantially undermine any future voluntary self-disclosure to the DOJ. Based on the annualized 2022 run-rate of approximately €379,200 (approximately $398,160 at €1 = $1.05), each month of continued payments adds approximately €31,600 ($33,180) to the exposure.

• Credit Facility Anti-Corruption Covenant Reaffirmation Risk. Each draw on the Meridian Atlantic $120 million revolving credit facility requires the borrower (TSL) to reaffirm certain representations and warranties, including the anti-corruption representation under Section 5.18 of the credit agreement. C&H's Credit Facility Anti-Corruption Covenant Analysis (Doc 8) concluded that the continued existence of the Goldenshore payment scheme at the time of any draw could constitute a breach of Section 5.18 and potentially trigger an Event of Default under Section 8.01(d) of the credit agreement. As of the date of dormancy, approximately $74 million was outstanding under the facility. An Event of Default could result in acceleration of all amounts outstanding and termination of the revolving commitment. The facility matures on January 15, 2025, and any FCPA-related disclosure prior to that date could impair TSL's ability to refinance.

• Goldenshore Agency Agreement Auto-Renewal Deadline. The Goldenshore Agency Agreement contains a provision requiring 90 days' written notice of non-renewal prior to the annual renewal date of March 1. For the current cycle, the notice deadline was December 1, 2022. C&H recommended in the Interim Status Memorandum (Doc 5) that TSL deliver notice of non-renewal to preserve the option to terminate the Goldenshore relationship as part of any remediation plan. As of the date of this summary, C&H has not been informed whether such notice was delivered. If notice was not given by December 1, 2022, the Goldenshore Agency Agreement will automatically renew for an additional term through February 28, 2024, and TSL will not have the ability to terminate without cause until the next notice window.

• Incomplete Document Production. The Document Request Letter of August 8, 2022 (Doc 4) requested production of 23 categories of documents. A partial production of approximately 340 pages was received on September 2, 2022. Key categories of documents that remain outstanding include: (i) TWA bank statements from Banque Equatoriale de Commerce SA for the period March 2018 through the present; (ii) TWA petty-cash records and disbursement logs; (iii) the complete set of Goldenshore invoices, including all supporting documentation and approvals; (iv) internal correspondence between TWA personnel and Goldenshore representatives; and (v) any records reflecting due diligence conducted on Goldenshore prior to or at the time of execution of the Agency Agreement. The absence of these records has prevented activation of the Northpoint forensic accounting engagement and has materially impeded C&H's ability to assess the full scope of the exposure.

• Materially Deficient Compliance Program. TSL's existing anti-corruption compliance program consists of a 14-page document titled "Global Anti-Bribery Policy," dated November 2016. The policy does not reference the FCPA by name. It does not include any requirements for due diligence on third-party agents, consultants, or intermediaries. It does not include a gifts-and-hospitality policy, a facilitation-payments policy, or a mechanism for reporting suspected violations. The policy has not been updated since its adoption in November 2016. The absence of a meaningful compliance program will be a significant negative factor in any DOJ or SEC assessment of TSL's culpability and will substantially reduce any credit available under the DOJ's Corporate Enforcement Policy.

• Potential FCPA Anti-Bribery Exposure. Based on the information available as of the date of dormancy, the potential exposure under the FCPA anti-bribery provisions is estimated as follows: DOJ fine range of $920,000 to $1,840,000 (up to 2× gross gain or loss, calculated on the basis of approximately $920,000 equivalent of €876,000 in aggregate expediting fees paid from March 2018 through May 2022, converted at €1 = $1.05). This estimate is preliminary and is subject to material revision based on the outcome of the forensic accounting review and the determination of whether the expediting fees have continued during the dormancy period.

• Potential SEC Disgorgement. The potential SEC disgorgement exposure is estimated at $1,260,000 to $3,675,000 (based on €1.2 million to €3.5 million, converted at €1 = $1.05). The range reflects uncertainty regarding the SEC's methodology for calculating ill-gotten gains in port-facilitation cases, which may extend beyond the expediting fees themselves to encompass profits attributable to contracts obtained or retained through the corrupt payments.

• Estimated Remediation Costs. Total remediation costs, including forensic accounting, development and implementation of an enhanced compliance program, and potential engagement of a third-party compliance monitor (if required by a DOJ or SEC resolution), are estimated at $350,000 to $750,000.

• Credit Facility Cross-Default Risk. As noted above, approximately $74 million is outstanding under TSL's $120 million revolving credit facility with Meridian Atlantic Bank, NA. A breach of the anti-corruption representation under Section 5.18, if discovered or disclosed, could constitute an Event of Default under Section 8.01(d), potentially resulting in acceleration of all amounts outstanding and termination of the revolving commitment. A cross-default provision in any other TSL debt instrument (which has not yet been fully analyzed due to incomplete document production) could amplify this risk.

• Delay Reduces Voluntary Self-Disclosure Credit. The DOJ's Corporate Enforcement Policy (formerly the FCPA Corporate Enforcement Policy, updated September 2022) provides substantial incentive for companies that voluntarily self-disclose FCPA violations, cooperate with the investigation, and remediate in a timely manner. Delay in the investigation, and in particular any delay in voluntary self-disclosure, may reduce the credit available to TSL under this policy. If the DOJ or SEC opens a formal investigation independently — for example, based on the whistleblower tip — before TSL has had the opportunity to self-disclose, the voluntary-self-disclosure path will be foreclosed entirely.

• Aggregate Goldenshore Payments. Total payments from TSL and its subsidiaries to Goldenshore Maritime Consultants Ltd. from March 2018 through May 2022 aggregate to approximately €3,016,000, comprising €2,140,000 in commissions (calculated at a rate of 3.5% on applicable cargo-handling and port-service revenues) and €876,000 in "expediting fees." The expediting fees by calendar year are as follows:

The escalating trend in expediting fees from 2018 through 2021, with a decline in 2020 likely attributable to pandemic-related disruptions to shipping volumes, and the sharp annualized increase in 2022, are notable and will be areas of focus for the forensic accounting review.

• U.S. Jurisdictional Nexus. The U.S. jurisdictional basis for FCPA enforcement is established through two independent nexus points. First, approximately 14 wire transfers aggregating approximately $423,000 were routed through Meridian Atlantic Bank, NA, New York, as the USD correspondent bank for transactions between TWA/TNL and Goldenshore. Each such wire transfer constitutes the use of the "mails or any means or instrumentality of interstate commerce" within the meaning of 15 U.S.C. § 78dd-1(a). Second, TSL derives annual charter revenue of approximately $34 million from two U.S.-domiciled companies: Ironwood Commodity Trading LLC (Houston, TX) and Cascadia Grain Exports Inc. (Portland, OR). These commercial relationships establish TSL's status as an "issuer" or "domestic concern" for FCPA purposes, or at minimum support personal jurisdiction over TSL in a U.S. enforcement action.

• Refinancing Risk. The Meridian Atlantic revolving credit facility matures on January 15, 2025. If the FCPA breach is disclosed or discovered prior to the maturity date — whether through voluntary self-disclosure, a government investigation, or a credit-agreement compliance inquiry — TSL's ability to refinance the facility on commercially reasonable terms will be materially impaired. This creates a tension between the legal imperative to self-disclose promptly and the commercial imperative to maintain access to credit.

CONFLICTS NOTES

No conflicts of interest were identified at the time the engagement was opened on June 30, 2022. The standard new-matter conflicts check was conducted in accordance with C&H's conflicts-clearance procedures and was completed on June 28, 2022.

C&H has represented Meridian Atlantic Bank, National Association, in unrelated commercial lending matters. Given Meridian Atlantic's role as lender and agent bank under TSL's revolving credit facility, a specific conflict inquiry was directed to the Calderwood & Harkness General Counsel's Office. The General Counsel's Office confirmed, by memorandum dated June 28, 2022 (reference CC-2022-1194), that no conflict exists, on the basis that (i) C&H is not currently representing Meridian Atlantic in any matter related to the TSL credit facility, the FCPA, or any anti-corruption compliance matter; (ii) the engagement for TSL does not involve any adverse claim against Meridian Atlantic; and (iii) the engagement is not reasonably likely to require C&H to take a position adverse to Meridian Atlantic's interests. However, if the matter develops in a direction that creates a potential adversity — for example, if TSL were to dispute the enforceability of the anti-corruption covenant or seek to prevent acceleration of the credit facility — a re-evaluation of the conflict determination would be required.

A periodic re-check of the conflicts determination is recommended, particularly in light of the following considerations: (i) the potential for the credit-facility covenant issue to become contested; (ii) the possibility that Meridian Atlantic may itself be approached by the DOJ or SEC in connection with the correspondent-banking nexus; and (iii) the potential for C&H to be engaged by Meridian Atlantic in an unrelated new matter during the dormancy period that could create a concurrent-client conflict. The next periodic re-check should be conducted upon reactivation of the matter or at the March 1, 2023 tickler date, whichever is earlier.

DOCUMENT INDEX

The following documents are contained in the matter file for 1044-00007, listed in chronological order:

Notes on Document Index:

Document 1 (Engagement Letter) sets forth the scope of the engagement, the fee arrangement, the identity of the responsible partner and billing partner, and the terms governing confidentiality, conflicts, and termination. The engagement letter was executed by Dimitra Karavelis-Stavrou on behalf of TSL.

Document 2 (Document Preservation & Litigation Hold Memorandum) was transmitted to TSL's General Counsel on July 5, 2022, and directed the preservation of all documents, communications, and electronically stored information potentially relevant to the review, including all records relating to the Goldenshore relationship, port-facilitation activities, and communications with government officials at West African ports.

Document 3 (Preliminary Scoping Memorandum) was prepared by Victoria Chambers and Jasmine Thornton and sets forth the proposed scope, methodology, and timeline for the internal review, including the planned phases of document collection, forensic accounting, witness interviews, legal analysis, and reporting. It also identifies preliminary risk factors and provides the initial fee and cost estimates.

Document 5 (Interim Status Memorandum) is the most substantive analytical document in the file to date and contains C&H's preliminary legal analysis of the FCPA exposure, including the jurisdictional nexus analysis, the anti-bribery exposure assessment, the books-and-records and internal-controls analysis, and the credit-facility covenant analysis. It also contains C&H's recommendations for immediate action, including suspension of expediting-fee payments and delivery of notice of non-renewal of the Goldenshore Agency Agreement.

Document 8 (Credit Facility Anti-Corruption Covenant Analysis) is a focused analysis of Section 5.18 (Anti-Corruption Laws representation) and Section 8.01(d) (Event of Default) of the Meridian Atlantic credit agreement, with specific application to the facts of the Goldenshore payment scheme.

Document 10 (Upjohn Warning Script — Draft) is the draft script for corporate Miranda warnings (Upjohn warnings) to be administered to TWA and TNL employees at the outset of any witness interview, advising them that C&H represents the company and not the individual, that the interview is privileged, and that the company may choose to waive the privilege in the future.

ADMINISTRATIVE

PREPARED BY: Jasmine Thornton, Lead Associate

LAST UPDATED: December 1, 2022

NEXT SCHEDULED UPDATE: March 1, 2023 (or upon reactivation of the matter, whichever is earlier)

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT — This document was prepared by Calderwood & Harkness LLP in anticipation of litigation and in connection with the provision of legal advice to Thalassa Shipping & Logistics SA. It is protected from disclosure by the attorney-client privilege, the work-product doctrine, and all other applicable privileges and protections. Any unauthorized review, use, disclosure, or distribution is strictly prohibited.

Field	Detail
MATTER NUMBER	1044-00007
MATTER NAME	Thalassa Shipping & Logistics SA — FCPA Internal Review (Port-Facilitation Payments)
CLIENT	Thalassa Shipping & Logistics SA, 14 Poseidonos Avenue, Piraeus 185 31, Greece
CLIENT CONTACT	Dimitra Karavelis-Stavrou, General Counsel & Chief Compliance Officer; email: d.karavelis@thalassasl.gr
PRACTICE GROUP	White Collar & Investigations
RESPONSIBLE PARTNER	Victoria Chambers
BILLING PARTNER	Howard Quinn
LEAD ASSOCIATE	Jasmine Thornton
WORKING ASSOCIATE	Liam Donahue
MATTER TYPE	FCPA Investigation / Internal Review
CLIENT ROLE	Respondent
Item	Detail
FEES BILLED TO DATE	Approximately $110,000 (through September 30, 2022)
OUTSTANDING ACCOUNTS RECEIVABLE	$27,500 (September 2022 invoice; 30 days past due as of October 31, 2022)
FEE ARRANGEMENT	Hourly — Partner: $1,450/hr; Senior Associate: $975/hr; Associate: $725/hr. A 10% volume discount on aggregate fees applies once total fees exceed $500,000 in a single calendar year.
ESTIMATED TOTAL FEES (C&H ONLY)	$400,000 – $600,000, assuming the investigation proceeds through completion, including preparation of a final report and any voluntary self-disclosure to the DOJ or SEC, but excluding representation in any contested enforcement proceeding.
ESTIMATED THIRD-PARTY COSTS	$225,000 – $400,000 (comprising Northpoint Forensic Advisors LLC forensic accounting engagement, and engagement of local counsel in Greece (Papadakis & Lekkas LLP), Côte d'Ivoire (Dossou & Mensah Avocats, if formally retained), and Nigeria (Okafor Bassey & Partners)).
Name	Title / Role	Affiliation
Nikolaos Karavelis	Chairman of the Board; approximately 68% shareholder	Thalassa Shipping & Logistics SA
Dimitra Karavelis-Stavrou	General Counsel & Chief Compliance Officer	Thalassa Shipping & Logistics SA
Alexandros Fitsakis	Chief Financial Officer	Thalassa Shipping & Logistics SA
Cédric Anouma	Managing Director	Thalassa West Africa SARL
Emeka Obiora	Country Manager	Thalassa Nigeria Limited
Yves Kouadio	Finance Manager	Thalassa West Africa SARL

Adama Coulibaly	Operations Coordinator	Thalassa West Africa SARL
Kofi Mensah Asante	Principal / Director	Goldenshore Maritime Consultants Ltd.
Moussa Diallo	40% shareholder (silent partner); brother-in-law of Captain Ibrahim Touré	Goldenshore Maritime Consultants Ltd.
Captain Ibrahim Touré	Director of Port Operations	Port Autonome d'Abidjan
Marcus Hartwell	Lead attorney (whistleblower's counsel)	Hartwell & Crane PLLC
Sandra Bellingham	Lead forensic accountant (CPA, CFE)	Northpoint Forensic Advisors LLC
Stavros Lekkas	Lead partner	Papadakis & Lekkas LLP
Ngozi Okafor	Lead partner	Okafor Bassey & Partners
Amadou Dossou	Lead	Dossou & Mensah Avocats
Gerald Fontaine	Managing Director, Shipping & Offshore Finance	Meridian Atlantic Bank, National Association
Period	Expediting Fees (€)
2018 (March – December)	127,000
2019	189,000
2020	164,000
2021	238,000
2022 (January – May)	158,000
Total	876,000
2022 Annualized Run-Rate	379,200
Doc. No.	Document Title	Date
1	Engagement Letter	June 30, 2022
2	Document Preservation & Litigation Hold Memorandum	July 5, 2022
3	Preliminary Scoping Memorandum	August 1, 2022
4	Document Request Letter to Client	August 8, 2022
5	Interim Status Memorandum	September 12, 2022
6	Dormancy / Hold-Status Letter	September 30, 2022

7	Internal Team Email — Matter Dormancy	September 30, 2022
8	Credit Facility Anti-Corruption Covenant Analysis	September 9, 2022
9	Ivorian Local-Counsel Consultation Memo	October 5, 2022
10	Upjohn Warning Script — Draft	August 22, 2022
11	60-Day Follow-Up Email to Client	December 1, 2022
12	Internal Matter-Status Summary (this document)	Current as of December 1, 2022

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT — PREPARED IN ANTICIPATION OF LITIGATION
CALDERWOOD & HARKNESS LLP — MATTER STATUS SUMMARY
MATTER IDENTIFICATION
This Matter Status Summary is an internal work-product document prepared by Calderwood & Harkness LLP ("C&H") for the exclusive use of the professionals staffed on the above-referenced matter. It is intended to provide a comprehensive, single-source reference for all material factual, financial, and procedural information bearing on the current posture of the engagement. This summary is protected by the attorney-client privilege and the work-product doctrine and should not be disclosed to any person outside of C&H without the express prior authorization of the Responsible Partner. All information is current as of the date indicated in the administrative block at the conclusion of this document unless otherwise noted.
ENGAGEMENT STATUS
ENGAGEMENT OPENED: June 30, 2022
CURRENT STATUS: DORMANT (since September 30, 2022)
REASON FOR DORMANCY: The client has not completed the document production requested in the Document Request Letter of August 8, 2022 (Doc 4). Only a partial production of approximately 340 pages was received on September 2, 2022. The controlling shareholder of Thalassa Shipping & Logistics SA, Nikolaos Karavelis (Chairman of the Board and holder of approximately 68% of TSL's outstanding equity), directly requested that all external legal spend on this matter be paused pending the completion of an internal budget review at the parent company level. Mr. Karavelis communicated this request through General Counsel Dimitra Karavelis-Stavrou during a telephone call with Victoria Chambers on September 28, 2022. C&H memorialized the dormancy in a Hold-Status Letter dated September 30, 2022 (Doc 6), which expressly noted that the passage of time would not eliminate or reduce the legal risks identified in the Interim Status Memorandum of September 12, 2022 (Doc 5) and that certain time-sensitive deadlines would continue to run during the dormancy period.
NEXT TICKLER: December 1, 2022 (60-day follow-up) — Completed. A follow-up email was transmitted to Dimitra Karavelis-Stavrou on December 1, 2022 (Doc 11). As of the date of this summary, no substantive response has been received. Ms. Karavelis-Stavrou acknowledged receipt of the email and indicated that Mr. Karavelis would be "reviewing the situation after the holidays."
SUBSEQUENT TICKLER: March 1, 2023 (90-day follow-up). This date also coincides with the effective date through which the Goldenshore Maritime Consultants Ltd. Agency Agreement will auto-renew if notice of non-renewal was not provided by December 1, 2022. As set forth in the Key Risk Factors section below, C&H recommended in the Interim Status Memorandum that TSL deliver notice of non-renewal prior to the December 1, 2022 deadline. As of this writing, C&H has not been informed whether such notice was delivered. This issue should be raised at the earliest opportunity upon reactivation of the matter or, if warranted, by separate communication to the client prior to the March 1, 2023 tickler.
FEES AND BILLING
The outstanding accounts receivable amount of $27,500 pertains to the September 2022 billing cycle, which was the final active billing period prior to the matter being placed on dormant status. The invoice was transmitted to Dimitra Karavelis-Stavrou on October 3, 2022, with a net-30 payment term. As of October 31, 2022, the invoice had not been paid. The Billing Partner, Howard Quinn, has been advised and has authorized one additional follow-up communication before escalation to the firm's collections protocol. The 60-day follow-up email of December 1, 2022 (Doc 11) included a reminder regarding the outstanding balance. No payment has been received as of the date of this summary.
The fee estimate range of $400,000–$600,000 was developed in the Preliminary Scoping Memorandum (Doc 3) and is predicated on a number of assumptions, including: (i) client cooperation and timely document production; (ii) the voluntary self-disclosure pathway being pursued, rather than a response to a government subpoena or formal investigation; (iii) no contested enforcement proceedings; and (iv) reasonable scope of forensic accounting review. The extended dormancy period introduces additional risk that these assumptions may no longer hold, and the estimate should be revisited upon reactivation.
Third-party cost estimates reflect preliminary scoping conversations with Northpoint Forensic Advisors LLC and the three identified local counsel firms. Northpoint has been formally retained pursuant to a sub-engagement letter dated August 15, 2022, but its work has not been activated. No fees have been incurred with Northpoint to date. Local counsel in Greece (Papadakis & Lekkas LLP) and Nigeria (Okafor Bassey & Partners) have been identified and have conducted preliminary conflicts checks, but neither firm has been formally retained. Dossou & Mensah Avocats in Abidjan was consulted informally regarding Ivorian anti-corruption law and local procedural requirements; a consultation memorandum was prepared (Doc 9), but no formal engagement has been entered into.
RELATED ENTITIES
The following entities are connected to this matter. Each entry includes the entity's full legal name, short name or abbreviation used in matter documents, role in the matter, entity type, and address.
1. Thalassa Shipping & Logistics SA ("TSL")
• Role: Client
• Entity Type: Société Anonyme (Greek law)
• Address: 14 Poseidonos Avenue, Piraeus 185 31, Greece
• Description: TSL is the parent entity of the Thalassa group and the direct client in this engagement. TSL operates a fleet of dry-bulk carriers primarily serving West African ports and is the contracting party under the Goldenshore Agency Agreement and the Meridian Atlantic revolving credit facility. TSL is a privately held company; Nikolaos Karavelis holds approximately 68% of its outstanding equity.
2. Thalassa West Africa SARL ("TWA")
• Role: Subsidiary of TSL
• Entity Type: Société à Responsabilité Limitée (Ivorian law)
• Address: Rue des Lagunes 27, Zone Portuaire, Abidjan, Côte d'Ivoire
• Description: TWA is TSL's wholly owned Ivorian subsidiary and serves as the primary operating entity for TSL's port-calling activities in Côte d'Ivoire. TWA is the entity through which the majority of the port-facilitation payments at issue in this review were processed. TWA maintains its primary operating bank account at Banque Equatoriale de Commerce SA in Abidjan. Key personnel include Managing Director Cédric Anouma, Finance Manager Yves Kouadio, and Operations Coordinator Adama Coulibaly.
3. Thalassa Nigeria Limited ("TNL")
• Role: Subsidiary of TSL
• Entity Type: Private Limited Company (Nigerian law)
• Address: 5B Apapa-Oshodi Expressway, Apapa, Lagos, Nigeria
• Description: TNL is TSL's wholly owned Nigerian subsidiary and manages port-calling activities at the Port of Apapa and Tin Can Island Port in Lagos. Preliminary review suggests that TNL's exposure to the port-facilitation payment scheme is more limited than TWA's, but certain transactions routed through Goldenshore may implicate TNL operations. The Country Manager is Emeka Obiora.
4. Goldenshore Maritime Consultants Ltd. ("Goldenshore")
• Role: Third-party port agent
• Entity Type: Limited Company (Ghanaian law)
• Address: 12 Independence Avenue, Tema New Town, Tema, Ghana
• Description: Goldenshore is the third-party port agent retained by TSL under an Agency Agreement dated March 1, 2018, to provide port-clearance, customs-facilitation, and logistics-coordination services at West African ports, principally Abidjan and Lagos. Goldenshore is the primary conduit through which the "expediting fees" at issue in this review were paid. The principal and sole named director is Kofi Mensah Asante. As described in the Key Risk Factors section, Moussa Diallo, who holds a 40% equity interest in Goldenshore as a silent partner, is the brother-in-law of Captain Ibrahim Touré, the Director of Port Operations at the Port Autonome d'Abidjan. This relationship was not disclosed to TSL at the time of contract execution or at any subsequent point. The Goldenshore Agency Agreement contains a 90-day notice provision for non-renewal, with a renewal date of March 1 of each year; the notice deadline for the current cycle was December 1, 2022.
5. Meridian Atlantic Bank, National Association ("Meridian Atlantic" or "MAB")
• Role: Lender / Agent bank on TSL's revolving credit facility
• Entity Type: National Association (U.S. federal banking charter)
• Address: 383 Madison Avenue, New York, NY 10179
• Description: Meridian Atlantic serves as the administrative agent and one of the lenders under TSL's $120 million senior secured revolving credit facility, dated as of April 12, 2021. The facility is governed by New York law. As of the date of dormancy, approximately $74 million was outstanding under the facility. Each draw on the facility requires the borrower to reaffirm certain representations and warranties, including an anti-corruption representation under Section 5.18 of the credit agreement. C&H's Credit Facility Anti-Corruption Covenant Analysis (Doc 8) concluded that the continued existence of the Goldenshore payment scheme at the time of any draw could constitute a breach of Section 5.18 and potentially trigger an Event of Default under Section 8.01(d). The facility matures on January 15, 2025. The key relationship contact at Meridian Atlantic is Gerald Fontaine, Managing Director, Shipping & Offshore Finance.
6. Banque Equatoriale de Commerce SA ("BEC")
• Role: TWA's operating bank in Côte d'Ivoire
• Entity Type: Société Anonyme (Ivorian law)
• Address: Abidjan, Côte d'Ivoire
• Description: BEC is the bank at which TWA maintains its primary operating account. Bank statements from BEC for the period March 2018 through the present are among the outstanding document requests that TSL has not yet fulfilled. These records are critical to tracing the flow of funds from TWA to Goldenshore and to identifying whether any payments were made directly to individuals affiliated with the Port Autonome d'Abidjan or other government entities.
7. Ashanti Continental Bank ("ACB")
• Role: Goldenshore's bank
• Entity Type: Banking institution (Ghanaian law)
• Address: Tema, Ghana
• Description: ACB is the bank at which Goldenshore maintains its principal operating account. Wire transfer records obtained in the partial production indicate that payments from TWA and TNL to Goldenshore were received into an ACB account. Certain payments from Goldenshore to unidentified third parties were also routed through ACB, but the ultimate beneficiaries of those payments have not been identified due to the incomplete state of the document production.
8. Northpoint Forensic Advisors LLC ("Northpoint")
• Role: Forensic accountants (retained but not activated)
• Entity Type: Limited Liability Company (Delaware)
• Address: 1700 K Street NW, Suite 600, Washington, DC 20006
• Description: Northpoint was retained under a sub-engagement letter dated August 15, 2022, to provide forensic accounting services in connection with this review. The scope of work, as contemplated in the Preliminary Scoping Memorandum (Doc 3), includes reconstruction of the payment flow from TSL and its subsidiaries through Goldenshore, identification of ultimate payment recipients, analysis of the commercial reasonableness of commissions and expediting fees, and quantification of potential gain/loss for purposes of penalty calculation under the FCPA. No work has been performed and no fees have been incurred to date, as activation was dependent on receipt of the complete document production from the client. The lead forensic accountant assigned to the matter is Sandra Bellingham, CPA, CFE.
9. Kouvalis & Demopoulos SA ("K&D")
• Role: TSL's statutory external auditor
• Entity Type: Société Anonyme (Greek law)
• Address: 10 Stadiou Street, Athens 105 62, Greece
• Description: K&D serves as the statutory external auditor for TSL and has issued unqualified audit opinions for TSL's consolidated financial statements for each fiscal year during the relevant period. The treatment of Goldenshore commissions and expediting fees in TSL's books and records — including whether such payments were properly characterized and disclosed in the audited financial statements — is a relevant area of inquiry. K&D has not been contacted by C&H and is not a party to the engagement.
10. Papadakis & Lekkas LLP ("P&L")
• Role: Greek local counsel
• Entity Type: Law Partnership (Greek law)
• Address: 28 Vasilissis Sofias Avenue, Athens 106 74, Greece
• Description: P&L has been identified as local counsel in Greece to advise on Greek anti-bribery and corporate governance law, as well as any implications arising under Greek data protection law (GDPR and implementing legislation) with respect to the document preservation and production process. A preliminary conflicts check has been completed. The lead partner is Stavros Lekkas. P&L has not been formally retained as of the date of this summary.
11. Okafor Bassey & Partners ("OB&P")
• Role: Nigerian local counsel
• Entity Type: Law Partnership (Nigerian law)
• Address: 4th Floor, Marina Towers, 22 Marina Street, Lagos Island, Lagos, Nigeria
• Description: OB&P has been identified as local counsel in Nigeria to advise on Nigerian anti-corruption law, including the Corrupt Practices and Other Related Offences Act, 2000, and to assist with any document collection or witness interview logistics in Lagos. A preliminary conflicts check has been completed. The lead partner is Ngozi Okafor. OB&P has not been formally retained as of the date of this summary.
12. Dossou & Mensah Avocats
• Role: Ivorian local counsel (consulted, not formally retained)
• Entity Type: Law Firm (Ivorian law)
• Address: Abidjan, Côte d'Ivoire
• Description: Dossou & Mensah Avocats was consulted informally in early October 2022 regarding Ivorian anti-corruption law, the legal status of "facilitation payments" under Ivorian law, and the operations of the Port Autonome d'Abidjan. A consultation memorandum was prepared by Liam Donahue based on these discussions (Doc 9). The lead contact is Amadou Dossou. No formal engagement has been entered into, and no engagement letter has been executed. If the matter is reactivated, a determination should be made as to whether formal retention is warranted.
13. Hartwell & Crane PLLC ("H&C")
• Role: Whistleblower's counsel
• Entity Type: Professional Limited Liability Company (District of Columbia law)
• Address: 1225 Connecticut Avenue NW, Suite 800, Washington, DC 20036
• Description: H&C represents the individual who filed the SEC whistleblower tip (TCR No. 2022-WB-08341) that prompted TSL's engagement of C&H. The identity of the whistleblower has not been confirmed, though circumstantial indicators suggest the individual has or had direct access to TWA or Goldenshore financial records. The lead attorney at H&C is Marcus Hartwell. C&H has had no direct communication with H&C. All information regarding the whistleblower tip was conveyed to C&H by TSL's General Counsel, Dimitra Karavelis-Stavrou, who was informed of the tip's existence by TSL's statutory auditors, K&D, in late June 2022.
KEY INDIVIDUALS (NON-C&H)
The following table identifies all individuals outside of Calderwood & Harkness LLP who are relevant to the matter, their organizational affiliation, and their role.
Notes on Key Individuals:
Nikolaos Karavelis is the controlling shareholder and the individual who authorized the retention of C&H. He is also the individual who directed that external legal spend be paused pending completion of an internal budget review, resulting in the current dormancy. Mr. Karavelis is not believed to have had direct knowledge of or involvement in the expediting fee payments, but this has not been confirmed through interview, as no witness interviews were conducted prior to dormancy.
Dimitra Karavelis-Stavrou is the daughter of Nikolaos Karavelis and serves as TSL's General Counsel and Chief Compliance Officer. She is the primary day-to-day contact for all C&H communications on this matter. Ms. Karavelis-Stavrou's dual role as General Counsel and CCO is noted as a governance concern in the Preliminary Scoping Memorandum (Doc 3), as it creates a potential conflict between her obligation to oversee the investigation and her reporting relationship to the controlling shareholder.
Cédric Anouma, Yves Kouadio, and Adama Coulibaly are the three TWA personnel most directly involved in the operational relationship with Goldenshore and the processing of expediting-fee payments. All three are priority interview subjects. The Upjohn Warning Script (Doc 10) was drafted in anticipation of interviews with these individuals, which were to be conducted in Abidjan. These interviews have not taken place.
Moussa Diallo's undisclosed 40% ownership interest in Goldenshore, and his familial relationship to Captain Ibrahim Touré, are central to the FCPA analysis. If Touré is a "foreign official" within the meaning of 15 U.S.C. § 78dd-1(f)(1)(A) — and as Director of Port Operations of the Port Autonome d'Abidjan, a government instrumentality, he almost certainly is — then payments to Goldenshore that inured to the benefit of Diallo, and through him potentially to Touré, may constitute prohibited payments under the FCPA anti-bribery provisions.
KEY RISK FACTORS
The following risk factors are identified as active and material as of the date of the most recent update to this summary. Each risk factor should be treated as a priority item for discussion upon reactivation of the matter.
• SEC Whistleblower Tip Pending. A whistleblower tip was filed with the Securities and Exchange Commission under TCR No. 2022-WB-08341. The tip was filed by an unidentified individual represented by Hartwell & Crane PLLC (Washington, DC). As of the date of dormancy (September 30, 2022), neither the Department of Justice nor the SEC had opened a formal investigation. However, the pendency of the tip creates a material risk that a formal investigation could be initiated at any time, including during the dormancy period, without notice to TSL or C&H. The passage of time since the tip was filed (approximately six months as of the date of this summary) does not eliminate this risk; SEC whistleblower tips are routinely held in queue for extended periods before action is taken.
• Undisclosed Government Affiliation of Goldenshore Beneficial Owner. Moussa Diallo, who holds a 40% equity interest in Goldenshore Maritime Consultants Ltd. as a silent partner, is the brother-in-law of Captain Ibrahim Touré, the Director of Port Operations at the Port Autonome d'Abidjan. This relationship was not disclosed to TSL at the time of execution of the Goldenshore Agency Agreement in March 2018 or at any subsequent point. The existence of this relationship transforms what might otherwise be characterized as arms-length commercial commissions into potential payments to a conduit for a foreign official, substantially heightening TSL's FCPA exposure. C&H became aware of this relationship through information provided by TSL's General Counsel, who indicated that the relationship was discovered by a TSL employee (believed to be Adama Coulibaly) in approximately April 2022.
• Expediting Fees May Not Have Been Suspended During Dormancy. In the Interim Status Memorandum of September 12, 2022 (Doc 5), C&H recommended that TSL immediately suspend all "expediting fee" payments to Goldenshore pending the outcome of the internal review. C&H has not received confirmation that this recommendation was implemented. If expediting-fee payments have continued during the dormancy period (October 2022 through the present), the aggregate exposure will have increased, and the evidentiary record of knowing continuation of potentially corrupt payments after being placed on notice will substantially undermine any future voluntary self-disclosure to the DOJ. Based on the annualized 2022 run-rate of approximately €379,200 (approximately $398,160 at €1 = $1.05), each month of continued payments adds approximately €31,600 ($33,180) to the exposure.
• Credit Facility Anti-Corruption Covenant Reaffirmation Risk. Each draw on the Meridian Atlantic $120 million revolving credit facility requires the borrower (TSL) to reaffirm certain representations and warranties, including the anti-corruption representation under Section 5.18 of the credit agreement. C&H's Credit Facility Anti-Corruption Covenant Analysis (Doc 8) concluded that the continued existence of the Goldenshore payment scheme at the time of any draw could constitute a breach of Section 5.18 and potentially trigger an Event of Default under Section 8.01(d) of the credit agreement. As of the date of dormancy, approximately $74 million was outstanding under the facility. An Event of Default could result in acceleration of all amounts outstanding and termination of the revolving commitment. The facility matures on January 15, 2025, and any FCPA-related disclosure prior to that date could impair TSL's ability to refinance.
• Goldenshore Agency Agreement Auto-Renewal Deadline. The Goldenshore Agency Agreement contains a provision requiring 90 days' written notice of non-renewal prior to the annual renewal date of March 1. For the current cycle, the notice deadline was December 1, 2022. C&H recommended in the Interim Status Memorandum (Doc 5) that TSL deliver notice of non-renewal to preserve the option to terminate the Goldenshore relationship as part of any remediation plan. As of the date of this summary, C&H has not been informed whether such notice was delivered. If notice was not given by December 1, 2022, the Goldenshore Agency Agreement will automatically renew for an additional term through February 28, 2024, and TSL will not have the ability to terminate without cause until the next notice window.
• Incomplete Document Production. The Document Request Letter of August 8, 2022 (Doc 4) requested production of 23 categories of documents. A partial production of approximately 340 pages was received on September 2, 2022. Key categories of documents that remain outstanding include: (i) TWA bank statements from Banque Equatoriale de Commerce SA for the period March 2018 through the present; (ii) TWA petty-cash records and disbursement logs; (iii) the complete set of Goldenshore invoices, including all supporting documentation and approvals; (iv) internal correspondence between TWA personnel and Goldenshore representatives; and (v) any records reflecting due diligence conducted on Goldenshore prior to or at the time of execution of the Agency Agreement. The absence of these records has prevented activation of the Northpoint forensic accounting engagement and has materially impeded C&H's ability to assess the full scope of the exposure.
• Materially Deficient Compliance Program. TSL's existing anti-corruption compliance program consists of a 14-page document titled "Global Anti-Bribery Policy," dated November 2016. The policy does not reference the FCPA by name. It does not include any requirements for due diligence on third-party agents, consultants, or intermediaries. It does not include a gifts-and-hospitality policy, a facilitation-payments policy, or a mechanism for reporting suspected violations. The policy has not been updated since its adoption in November 2016. The absence of a meaningful compliance program will be a significant negative factor in any DOJ or SEC assessment of TSL's culpability and will substantially reduce any credit available under the DOJ's Corporate Enforcement Policy.
• Potential FCPA Anti-Bribery Exposure. Based on the information available as of the date of dormancy, the potential exposure under the FCPA anti-bribery provisions is estimated as follows: DOJ fine range of $920,000 to $1,840,000 (up to 2× gross gain or loss, calculated on the basis of approximately $920,000 equivalent of €876,000 in aggregate expediting fees paid from March 2018 through May 2022, converted at €1 = $1.05). This estimate is preliminary and is subject to material revision based on the outcome of the forensic accounting review and the determination of whether the expediting fees have continued during the dormancy period.
• Potential SEC Disgorgement. The potential SEC disgorgement exposure is estimated at $1,260,000 to $3,675,000 (based on €1.2 million to €3.5 million, converted at €1 = $1.05). The range reflects uncertainty regarding the SEC's methodology for calculating ill-gotten gains in port-facilitation cases, which may extend beyond the expediting fees themselves to encompass profits attributable to contracts obtained or retained through the corrupt payments.
• Estimated Remediation Costs. Total remediation costs, including forensic accounting, development and implementation of an enhanced compliance program, and potential engagement of a third-party compliance monitor (if required by a DOJ or SEC resolution), are estimated at $350,000 to $750,000.
• Credit Facility Cross-Default Risk. As noted above, approximately $74 million is outstanding under TSL's $120 million revolving credit facility with Meridian Atlantic Bank, NA. A breach of the anti-corruption representation under Section 5.18, if discovered or disclosed, could constitute an Event of Default under Section 8.01(d), potentially resulting in acceleration of all amounts outstanding and termination of the revolving commitment. A cross-default provision in any other TSL debt instrument (which has not yet been fully analyzed due to incomplete document production) could amplify this risk.
• Delay Reduces Voluntary Self-Disclosure Credit. The DOJ's Corporate Enforcement Policy (formerly the FCPA Corporate Enforcement Policy, updated September 2022) provides substantial incentive for companies that voluntarily self-disclose FCPA violations, cooperate with the investigation, and remediate in a timely manner. Delay in the investigation, and in particular any delay in voluntary self-disclosure, may reduce the credit available to TSL under this policy. If the DOJ or SEC opens a formal investigation independently — for example, based on the whistleblower tip — before TSL has had the opportunity to self-disclose, the voluntary-self-disclosure path will be foreclosed entirely.
• Aggregate Goldenshore Payments. Total payments from TSL and its subsidiaries to Goldenshore Maritime Consultants Ltd. from March 2018 through May 2022 aggregate to approximately €3,016,000, comprising €2,140,000 in commissions (calculated at a rate of 3.5% on applicable cargo-handling and port-service revenues) and €876,000 in "expediting fees." The expediting fees by calendar year are as follows:
The escalating trend in expediting fees from 2018 through 2021, with a decline in 2020 likely attributable to pandemic-related disruptions to shipping volumes, and the sharp annualized increase in 2022, are notable and will be areas of focus for the forensic accounting review.
• U.S. Jurisdictional Nexus. The U.S. jurisdictional basis for FCPA enforcement is established through two independent nexus points. First, approximately 14 wire transfers aggregating approximately $423,000 were routed through Meridian Atlantic Bank, NA, New York, as the USD correspondent bank for transactions between TWA/TNL and Goldenshore. Each such wire transfer constitutes the use of the "mails or any means or instrumentality of interstate commerce" within the meaning of 15 U.S.C. § 78dd-1(a). Second, TSL derives annual charter revenue of approximately $34 million from two U.S.-domiciled companies: Ironwood Commodity Trading LLC (Houston, TX) and Cascadia Grain Exports Inc. (Portland, OR). These commercial relationships establish TSL's status as an "issuer" or "domestic concern" for FCPA purposes, or at minimum support personal jurisdiction over TSL in a U.S. enforcement action.
• Refinancing Risk. The Meridian Atlantic revolving credit facility matures on January 15, 2025. If the FCPA breach is disclosed or discovered prior to the maturity date — whether through voluntary self-disclosure, a government investigation, or a credit-agreement compliance inquiry — TSL's ability to refinance the facility on commercially reasonable terms will be materially impaired. This creates a tension between the legal imperative to self-disclose promptly and the commercial imperative to maintain access to credit.
CONFLICTS NOTES
No conflicts of interest were identified at the time the engagement was opened on June 30, 2022. The standard new-matter conflicts check was conducted in accordance with C&H's conflicts-clearance procedures and was completed on June 28, 2022.
C&H has represented Meridian Atlantic Bank, National Association, in unrelated commercial lending matters. Given Meridian Atlantic's role as lender and agent bank under TSL's revolving credit facility, a specific conflict inquiry was directed to the Calderwood & Harkness General Counsel's Office. The General Counsel's Office confirmed, by memorandum dated June 28, 2022 (reference CC-2022-1194), that no conflict exists, on the basis that (i) C&H is not currently representing Meridian Atlantic in any matter related to the TSL credit facility, the FCPA, or any anti-corruption compliance matter; (ii) the engagement for TSL does not involve any adverse claim against Meridian Atlantic; and (iii) the engagement is not reasonably likely to require C&H to take a position adverse to Meridian Atlantic's interests. However, if the matter develops in a direction that creates a potential adversity — for example, if TSL were to dispute the enforceability of the anti-corruption covenant or seek to prevent acceleration of the credit facility — a re-evaluation of the conflict determination would be required.
A periodic re-check of the conflicts determination is recommended, particularly in light of the following considerations: (i) the potential for the credit-facility covenant issue to become contested; (ii) the possibility that Meridian Atlantic may itself be approached by the DOJ or SEC in connection with the correspondent-banking nexus; and (iii) the potential for C&H to be engaged by Meridian Atlantic in an unrelated new matter during the dormancy period that could create a concurrent-client conflict. The next periodic re-check should be conducted upon reactivation of the matter or at the March 1, 2023 tickler date, whichever is earlier.
DOCUMENT INDEX
The following documents are contained in the matter file for 1044-00007, listed in chronological order:
Notes on Document Index:
Document 1 (Engagement Letter) sets forth the scope of the engagement, the fee arrangement, the identity of the responsible partner and billing partner, and the terms governing confidentiality, conflicts, and termination. The engagement letter was executed by Dimitra Karavelis-Stavrou on behalf of TSL.
Document 2 (Document Preservation & Litigation Hold Memorandum) was transmitted to TSL's General Counsel on July 5, 2022, and directed the preservation of all documents, communications, and electronically stored information potentially relevant to the review, including all records relating to the Goldenshore relationship, port-facilitation activities, and communications with government officials at West African ports.
Document 3 (Preliminary Scoping Memorandum) was prepared by Victoria Chambers and Jasmine Thornton and sets forth the proposed scope, methodology, and timeline for the internal review, including the planned phases of document collection, forensic accounting, witness interviews, legal analysis, and reporting. It also identifies preliminary risk factors and provides the initial fee and cost estimates.
Document 5 (Interim Status Memorandum) is the most substantive analytical document in the file to date and contains C&H's preliminary legal analysis of the FCPA exposure, including the jurisdictional nexus analysis, the anti-bribery exposure assessment, the books-and-records and internal-controls analysis, and the credit-facility covenant analysis. It also contains C&H's recommendations for immediate action, including suspension of expediting-fee payments and delivery of notice of non-renewal of the Goldenshore Agency Agreement.
Document 8 (Credit Facility Anti-Corruption Covenant Analysis) is a focused analysis of Section 5.18 (Anti-Corruption Laws representation) and Section 8.01(d) (Event of Default) of the Meridian Atlantic credit agreement, with specific application to the facts of the Goldenshore payment scheme.
Document 10 (Upjohn Warning Script — Draft) is the draft script for corporate Miranda warnings (Upjohn warnings) to be administered to TWA and TNL employees at the outset of any witness interview, advising them that C&H represents the company and not the individual, that the interview is privileged, and that the company may choose to waive the privilege in the future.
ADMINISTRATIVE
PREPARED BY: Jasmine Thornton, Lead Associate
LAST UPDATED: December 1, 2022
NEXT SCHEDULED UPDATE: March 1, 2023 (or upon reactivation of the matter, whichever is earlier)
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT — This document was prepared by Calderwood & Harkness LLP in anticipation of litigation and in connection with the provision of legal advice to Thalassa Shipping & Logistics SA. It is protected from disclosure by the attorney-client privilege, the work-product doctrine, and all other applicable privileges and protections. Any unauthorized review, use, disclosure, or distribution is strictly prohibited.
Field | Detail
MATTER NUMBER | 1044-00007
MATTER NAME | Thalassa Shipping & Logistics SA — FCPA Internal Review (Port-Facilitation Payments)
CLIENT | Thalassa Shipping & Logistics SA, 14 Poseidonos Avenue, Piraeus 185 31, Greece
CLIENT CONTACT | Dimitra Karavelis-Stavrou, General Counsel & Chief Compliance Officer; email: d.karavelis@thalassasl.gr
PRACTICE GROUP | White Collar & Investigations
RESPONSIBLE PARTNER | Victoria Chambers
BILLING PARTNER | Howard Quinn
LEAD ASSOCIATE | Jasmine Thornton
WORKING ASSOCIATE | Liam Donahue
MATTER TYPE | FCPA Investigation / Internal Review
CLIENT ROLE | Respondent
Item | Detail
FEES BILLED TO DATE | Approximately $110,000 (through September 30, 2022)
OUTSTANDING ACCOUNTS RECEIVABLE | $27,500 (September 2022 invoice; 30 days past due as of October 31, 2022)
FEE ARRANGEMENT | Hourly — Partner: $1,450/hr; Senior Associate: $975/hr; Associate: $725/hr. A 10% volume discount on aggregate fees applies once total fees exceed $500,000 in a single calendar year.
ESTIMATED TOTAL FEES (C&H ONLY) | $400,000 – $600,000, assuming the investigation proceeds through completion, including preparation of a final report and any voluntary self-disclosure to the DOJ or SEC, but excluding representation in any contested enforcement proceeding.
ESTIMATED THIRD-PARTY COSTS | $225,000 – $400,000 (comprising Northpoint Forensic Advisors LLC forensic accounting engagement, and engagement of local counsel in Greece (Papadakis & Lekkas LLP), Côte d'Ivoire (Dossou & Mensah Avocats, if formally retained), and Nigeria (Okafor Bassey & Partners)).
Name | Title / Role | Affiliation
Nikolaos Karavelis | Chairman of the Board; approximately 68% shareholder | Thalassa Shipping & Logistics SA
Dimitra Karavelis-Stavrou | General Counsel & Chief Compliance Officer | Thalassa Shipping & Logistics SA
Alexandros Fitsakis | Chief Financial Officer | Thalassa Shipping & Logistics SA
Cédric Anouma | Managing Director | Thalassa West Africa SARL
Emeka Obiora | Country Manager | Thalassa Nigeria Limited
Yves Kouadio | Finance Manager | Thalassa West Africa SARL
Adama Coulibaly | Operations Coordinator | Thalassa West Africa SARL
Kofi Mensah Asante | Principal / Director | Goldenshore Maritime Consultants Ltd.
Moussa Diallo | 40% shareholder (silent partner); brother-in-law of Captain Ibrahim Touré | Goldenshore Maritime Consultants Ltd.
Captain Ibrahim Touré | Director of Port Operations | Port Autonome d'Abidjan
Marcus Hartwell | Lead attorney (whistleblower's counsel) | Hartwell & Crane PLLC
Sandra Bellingham | Lead forensic accountant (CPA, CFE) | Northpoint Forensic Advisors LLC
Stavros Lekkas | Lead partner | Papadakis & Lekkas LLP
Ngozi Okafor | Lead partner | Okafor Bassey & Partners
Amadou Dossou | Lead | Dossou & Mensah Avocats
Gerald Fontaine | Managing Director, Shipping & Offshore Finance | Meridian Atlantic Bank, National Association
Period | Expediting Fees (€)
2018 (March – December) | 127,000
2019 | 189,000
2020 | 164,000
2021 | 238,000
2022 (January – May) | 158,000
Total | 876,000
2022 Annualized Run-Rate | 379,200
Doc. No. | Document Title | Date
1 | Engagement Letter | June 30, 2022
2 | Document Preservation & Litigation Hold Memorandum | July 5, 2022
3 | Preliminary Scoping Memorandum | August 1, 2022
4 | Document Request Letter to Client | August 8, 2022
5 | Interim Status Memorandum | September 12, 2022
6 | Dormancy / Hold-Status Letter | September 30, 2022
7 | Internal Team Email — Matter Dormancy | September 30, 2022
8 | Credit Facility Anti-Corruption Covenant Analysis | September 9, 2022
9 | Ivorian Local-Counsel Consultation Memo | October 5, 2022
10 | Upjohn Warning Script — Draft | August 22, 2022
11 | 60-Day Follow-Up Email to Client | December 1, 2022
12 | Internal Matter-Status Summary (this document) | Current as of December 1, 2022