Stephen Baldwin Sues Kevin Costner in BP Oil Spill Investment Drama
In the midst of the oil spill in the Gulf of Mexico by BP drilling rig, Deepwater Horizon, a number of news outlets got a bunch of yuks with news that Kevin Costner was the potential savior for the crisis -- that his company, CINC ("Costner in Nevada Corporation"), had developed a technology that separated oil from water.
In a new lawsuit filed in Louisiana District Court, actor Stephen Baldwin and a friend named Spyridon Contogouris claim they were tricked into selling shares of the company that marketed CINC's technology.
According to the complaint, Contogouris was approached in the early 2000s by Costner's representatives to market the actor's technology to various customers. He says he entered into an agreement in which he would receive a commission on sales of units.
Flash forward to April 17, 2010.
Costner had Contogouris had a meal together in Biloxi, Mississippi, where Costner's band, Modern West, was playing a gig.
By that time, says the complaint, Costner's attempts to market his technology had proven unsuccessful, and he sold all his rights and ownership in CINC to a man named Bret Shelton.
Three days after Costner and Contogouris had gotten together, Deepwater Horizon exploded, which would eventually lead to the leak of nearly 5 million gallons of oil into the Gulf of Mexico before the wellhead was capped.
Contogouris knew it was a big opportunity for CINC. He says he attempted to contact Costner, but couldn't, because the actor was filming a movie in Canada. Instead, Contogouris spoke to one of Costner's friends, who advised him that the actor's stock in the company had already been sold. So Contogouris spoke with Shelton, and then tried unsuccessfully to get in touch with BP.
Now, Baldwin enters the picture.
In late April, Contogouris and Baldwin got together in New Orleans with a local attorney, John Houghtaling, and discussed making a documentary film based on the BP oil spill. Costner's technology was then discussed.
Houghtaling mentioned he could make an introduction to BP, and before long, a joint venture agreement was confected between Baldwin, Contogouris, Houghtaling, and others to market the CINC technology to BP. On May 13, the joint venture, Ocean Therapies Solutions (OTS), signed an agreement with CINC, whereby Contogouris got a 28 percent ownership and Baldwin got a 10 percent ownership in the new company.
That same day, BP agreed to test the CINC technology for possible use in cleaning up the Deepwater Horizon spill.
Then, things went south.
Members of the joint venture, OTS, began disagreeing about how to license the technology to BP -- whether it should be a long-term relationship or a one-time sale for a "quick kill" of the Gulf of Mexico disaster. Plus, there was said to be a falling out over the failed documentary about the oil spill, which soon resulted in a separate lawsuit.
The disagreements threatened to blow up OTS, until Costner got involved again, testifying before Congress on June 9 about his technology.
Soon after that, BP agreed to meet.
But Contogouris and Baldwin claim in their new lawsuit that they were purposefully excluded from the meeting with BP, which resulted in an $18 million deposit for a larger purchase price of the technology. Contogouris and Baldwin says they were kept out of the loop about this money and were instead told that BP had placed no such order.
Having believed that OTS had failed, Contogouris says he sold his interest in CINC's new partner company. It's alleged that the money that came from BP was used by Costner and one of his associates to buy Contogouris and Baldwin out of their interest in the venture.
The deal was executed on June 11 in a "Transfer, Withdrawal, Release and Indemnity Agreement" whereby Contogouris gave up his 28% share and Baldwin gave up his 10% share in OTS for about $2 million total.
A day later, BP purchased 32 units of the CINC technology for a gross price alleged to be in excess of $52 million. Two days after that, Costner and his associates/co-defendants "clandestinely, secretly and wrongfully caused an unauthorized bank account to be opened" without the knowledge of Contogouris and Baldwin. The account was allegedly used by Costner and an associate as "their own personal piggy bank."
The plaintiffs say they didn't discover what had happened, how they had been supposedly tricked out of their involvement in OTS, until mid-July.
They are now suing for securities fraud and misrepresentation. Contogouris claims $10.64 million in damages. Baldwin claims $3.8 million in damages.