Powers Taylor Forces Production of Documents in Suspected Investor Fraud Case

On November 5, 2014, Mark Taylor obtained a Writ of Mandamus from a Collin County judge, ordering that Sethi Petroleum, LLC allow the inspection of its books and records related to an oil and gas joint venture.  Plano-based Sethi Petroleum had raised approximately $1,000,000 from individual investors to form the Bakken Patriot 5-8 Joint Venture, including a substantial investment from the Arizona resident who hired Powers Taylor to investigate.  When Sethi Petroleum failed to respond adequately to requests to inspect the books and records, and instead claimed that a former officer had stolen their accounting records, Mr. Taylor started a court action to obtain all business records related to the joint venture.  When the court issued the Writ of Mandamus, Sethi Petroleum was required to produce bank statements, property acquisition records, investor records, and financial statements.

When investigating claims of potential investment fraud, attorneys often overlook the opportunity to obtain records directly from the target of the investigation prior to the lawsuit.  Because most partnership agreements and corporate bylaws permit co-owners to examine the books and records of the venture, it is possible to force an inspection in an expedited proceeding, even before a lawsuit is filed. Having key documents available before the lawsuit permits the investors to evaluate their chances of success before they commit to a lengthy and expensive lawsuit for fraud.  “The mechanisms in Texas for the production of corporate records are unique, and many litigators overlook that opportunity,” said Mr. Taylor.  “We are pleased with the action taken by the Collin County court, and believe that the documents we have obtained will help our client enforce his legal rights.”


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