Dear Dimitra:
I hope this message finds you well and that the fall has been a productive period for you and the team in Piraeus. I wanted to reach out directly, as it has now been approximately sixty days since our hold-status letter of September 30, 2022, and I thought it would be useful to check in on the status of the outstanding document production and the internal budget discussions that prompted the pause in our work.
I fully appreciate the Company's need to manage external legal spend, and we have respected the request to hold further substantive work pending resolution of those discussions. That said, I want to flag several developments and deadlines that, in our view, warrant prompt attention. I have organized these below for ease of reference.
1. **SEC Whistleblower Tip Remains Pending.** The whistleblower tip filed with the SEC (TCR No. 2022-WB-08341, submitted on or about May 15, 2022) remains pending with the SEC's Division of Enforcement. To our knowledge, the SEC has not yet opened a formal investigation, but it retains the authority to do so at any time and without advance notice to the Company. As a general matter, it is far preferable to have a completed — or at minimum, substantially advanced — internal investigation in hand before any government outreach occurs. A credible factual narrative positions the Company to control the dialogue and, if the facts warrant it, to pursue a voluntary self-disclosure on the most favorable terms available. In this regard, I would note that the DOJ's Corporate Enforcement Policy provides significant sentencing credit for timely voluntary self-disclosure, full cooperation, and timely and appropriate remediation. The operative word is "timely." The longer the interval between the Company's awareness of the issue and any affirmative steps taken to investigate and remediate, the less credit is likely to be available.
2. **Continued Expediting-Fee Payments to Goldenshore.** We are not currently aware whether Thalassa West Africa has suspended the "expediting fee" payments to Goldenshore Maritime Consultants Ltd., as we recommended in the Interim Status Memorandum of September 12, 2022. If such payments have continued since that date, each additional payment increases the Company's aggregate FCPA exposure — both in terms of the quantum of potentially improper payments and the duration of the conduct. Continued payments would also substantially undermine any future argument that the Company acted promptly upon learning of the issue, and would likely be viewed unfavorably by both the DOJ and the SEC in any future enforcement proceeding. I would appreciate an update on the current status of these payments at your earliest convenience.
3. **Goldenshore Agency Agreement Auto-Renewal Deadline.** I want to draw your urgent attention to a contractual deadline. The Port Agency and Facilitation Services Agreement with Goldenshore auto-renewed on March 1, 2022, for a one-year term running through February 28, 2023. Under the agreement, 90 days' written notice is required to terminate or to prevent automatic renewal for an additional one-year term. By our calculation, notice must be given no later than today — December 1, 2022 — to prevent the agreement from auto-renewing through February 28, 2024. If the Company intends to terminate or elect not to renew this agreement, action is needed immediately. I would be happy to assist with drafting an appropriate notice if that would be useful, but given the time sensitivity, I wanted to flag this without delay.
4. **Outstanding Document Production.** As you will recall, we transmitted a detailed document request on August 8, 2022. While we received a partial production of approximately 340 pages on September 2, 2022, several key categories of documents remain outstanding. These include, among other items: TWA bank statements from Banque Equatoriale de Commerce SA (for all periods), TNL bank statements, petty-cash records and cash-disbursement vouchers, the complete set of Goldenshore invoices (encompassing both commissions and expediting fees — we have received only 23 of an estimated 150 to 200 invoices), wire-transfer confirmations, vessel-call logs, and customs-clearance records. I want to be candid: the investigation cannot be meaningfully advanced without these materials. Additionally, Sandra Bellingham and her team at Northpoint Forensic Advisors LLC remain on standby and cannot be activated to begin the forensic accounting workstream until the underlying bank records are produced. Every week of delay extends the overall timeline for completion of the review.
5. **Meridian Atlantic Credit Facility — Continuing Anti-Corruption Representations.** I also want to reiterate a concern we have previously analyzed regarding the Company's $120 million revolving credit facility with Meridian Atlantic Bank, National Association (executed January 15, 2020; maturity January 15, 2025). The anti-corruption representations set forth in Section 5.18 of the credit agreement are reaffirmed by the Company with each borrowing request submitted under Section 4.02(c). As of June 30, 2022, the Company had approximately $74 million outstanding under the facility. If the Company has drawn additional funds since that date, its exposure under Section 5.18 continues to accrue. Each additional draw, to the extent the underlying anti-corruption representation is inaccurate, constitutes a separate potential breach that could trigger an Event of Default under Section 8.01(d) of the credit agreement. This is a matter that warrants careful monitoring in the interim, even while the broader investigation remains paused.
As a brief reminder, the litigation hold issued on July 5, 2022, remains in full force and effect, and the Company should continue to ensure that all potentially relevant documents and electronic data are being preserved in accordance with its terms.
Dimitra, I recognize that these are complex matters and that the budgetary considerations on your end are real. We are fully prepared to reactivate the engagement promptly upon receipt of the outstanding documents and appropriate client authorization, and we remain committed to working with you to manage this process as efficiently as possible. I am available any day next week to schedule a call at your convenience, and I would be happy to arrange a time that works for both you and Alexandros, given that the path forward will likely involve budgetary considerations within his purview.
Please do not hesitate to reach out if you would like to discuss any of the above in the interim.
With best regards,
Victoria Chambers Partner