In Re Cobalt Int’l Energy, Inc. Sec. Litig., No. 14-3428 (S.D. Tex.)
E&C serves as Co-Lead Counsel in this federal securities class action filed on behalf of investors in Cobalt International Energy, Inc. (“Cobalt” or the “Company”), a Texas-based oil and gas exploration company with operations in the Gulf of Mexico and offshore West Africa. The action was filed against Cobalt, certain of its officers and directors, various underwriters of Cobalt securities and Cobalt’s founders. Plaintiffs asserted claims under Sections 10(b), 20(a) and 20A of the Securities Exchange Act of 1934, as well as Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. Specifically, the complaint alleged that Cobalt and its officers and directors failed to disclose that the Company’s Angolan partners were owned by Angolan government officials, which exposed Cobalt to regulatory investigations into potential Foreign Corrupt Practices Act violations. Cobalt also allegedly misrepresented the value of certain of its Angolan wells despite the Company’s knowledge that the wells contained very little or no oil.
E&C successfully opposed multiple motions to dismiss filed by the various Defendant groups, as well as Defendants’ motions seeking interlocutory appeal. Thereafter, the Firm conducted extensive fact discovery of Defendants and related third parties through detailed document requests, interrogatories and more than 30 depositions. In 2017, E&C successfully obtained certification of the Cobalt investor class after engaging in detailed expert discovery and voluminous class certification briefing. The Firm also fully briefed Plaintiffs’ opposition to Defendants’ class certification appeal and argued the opposition before the Fifth Circuit Court of Appeals.
Just prior to the close of fact discovery, Cobalt filed for bankruptcy protection in December 2017. E&C continued to prosecute the underlying securities class action and litigated in the Cobalt bankruptcy proceeding until achieving a series of settlements with all Defendants in the fall of 2018. The Court approved the class settlements on February 13, 2019 and approved final distribution of the settlement proceeds on November 17, 2020. The first distribution of settlement proceeds is expected to occur in 2021.
Insurers for Cobalt and certain of its officers and directors have denied coverage for a portion of the class action settlements. E&C is currently litigating the recovery of those withheld insurance proceeds in Texas state court.
To view the relevant documents in this matter, please use the following links: