Preview
FILED
12/29/2022 8:30 PM
FELICIA PITRE
2 CIT ESERVE DISTRICT CLERK
JURY DEMAND K§§aLnL§§o§EbE§fi¢$
DC-22-1 7865
CAUSE N0.
VicNRG, LLC, § IN THE DISTRICT COURT OF
§
Plaintiff, §
§ 14th
V. § JUDICIAL DISTRICT
§
VICTORY RENEWABLES, LLC, and §
CONESTOGA ENERGY HOLDINGS, §
LLC, § DALLAS COUNTY, TEXAS
Defendants.
PLAINTIFF’S ORIGINAL PETITION
Plaintiff VicNRG, LLC (“VicNRG” or “P1aintiff’) files this its Original Petition
complaining of Defendant Victory Renewables, LLC (“Victory Renewables”) and Conestoga
Energy Holdings, LLC (“Conestoga” and, collectively, “Defendants”) and would respectfully
show the Court as follows:
I. NATURE OF THE CASE
VicNRG brings this action against Victory Renewables related to Victory Renewables’
failure to perform under the Asset Purchase Agreementl between the parties, as well as Victory
Renewables’ and Conestoga’s fraud in failure to perform its obligations in the transaction. Among
other things, Victory Renewables promised that itwould pay VicNRG the Estimated Closing
Working Capital Overage and pay the Additional Purchase Price described in the APA. Victory
Renewables failed to perform each of these promises. Plaintiff contends that not only does Victory
Renewables’ failures constitute breach of contract but also Victory Renewables’ and Conestoga’s
false representations and unfulfilled promises constitute fraud, promissory estoppel, and negligent
1
The Asset Purchase Agreement by and among VicNRG, LLC (Seller), Victory Renewables, LLC (Buyer), and
each of the parties listed on the signature pages thereto, dated effective as of March 1, 2017, as amended by the
Amendment to Asset Purchase Agreement, dated January 31, 2020, between VicNRG, LLC and Victory
Renewables, LLC (collectively, the “APA).
PLAINTIFF’S ORIGINAL PETITION — Page l
misrepresentation. Additionally, VicNRG also seeks a declaration from this court that Victory
Renewables must provide it with certain documents so that VicNRG may determine Whether
calculations Victory Renewables has made that affect VicNRG’s earn out were correct.
II. DISCOVERY CONTROL PLAN AND RULE 47 STATEMENT
1. Pursuant to the Texas Rules of Civil Procedure 190, Plaintiff intends discovery to
be conducted by a Level 3 discovery control plan and affirmatively pleads that this suit is not
governed by the expedited actions process.
2. Plaintiff seeks monetary relief great than $1,000,000.00, inclusive of damages,
attorneys’ fees, and costs, in addition to all other relief to which Plaintiff is justly entitled.
III. PARTIES
3. VicNRG is a Texas limited liability company with itsprincipal offices in Dallas
County, Texas.
4. Victory Renewables is a Kansas limited liability company. Victory Renewables
may be served with process through its registered Texas agent of service, Capitol Corporate
Services, Inc., at its registered address of 1501 S. Mopac Expressway, Suite 220, Austin, Texas
78746, or wherever it may be found. Additionally, pursuant to Texas Civil Practices and
Remedies Code §17.044(b), the Texas Secretary of State is a proper agent for service of process
for Victory Renewables. The Texas Secretary of State may be served with citation for Victory
Renewables at Service of Process, Texas Secretary of State, P.O. Box 12079, Austin, Texas 7871 l-
2079. Upon receipt of the Citation by the Secretary of State, process should be immediately
forwarded by certified mail, return receipt requested to Victory Renewables’ registered agent for
service of process Capitol Corporate Services, Inc. at 700 S.W. Jackson Street, Suite 100, Topeka,
Kansas 66603.
5. Conestoga Energy Holdings, LLC is a Kansas limited liability company. Pursuant
PLAINTIFF’S ORIGINAL PETITION — Page 2
to Texas Civil Practices and Remedies Code §17.044(b), the Texas Secretary of State is a proper
agent for service of process for Conestoga. The Texas Secretary of State may be served with
citation for Victory Renewables at Service of Process, Texas Secretary of State, P.O. Box 12079,
Austin, Texas 78711-2079. Upon receipt of the Citation by the Secretary of State, process should
be immediately forwarded by certified mail, return receipt requested to Conestoga’s registered
mailing address at 1701 N. Kansas Ave, Liberal, Kansas 67901.
IV. JURISDICTION AND VENUE
6. The controversy that is the subject of this suit falls Within the Court’s general
jurisdiction as Plaintiff seeks monetary relief in excess of the minimum jurisdictional limits of this
Court. Further support for jurisdiction is provided in Article 5, Sections l and 8 of the Texas
Constitution and Sections 24.007 and 24.008 of the Texas Government Code.
7. This Court has personal jurisdiction over Victory Renewables because it consented
to personal jurisdiction of a state court located in Dallas County, Texas as part of the APA it
signed? The Court possesses personal jurisdiction over Conestoga because it has engaged in
systematic contacts with Texas and purposefully availed itself of the opportunity to conduct
business in Texas such that itshould reasonably expect to be sued in Texas in connection with
such contacts.
8. Venue is proper because Victory Renewables consented to venue in Dallas
County, Texas in as part of the APA it signed.3 Further, venue is proper because all or a
substantial part of the events or omissions giving rise to the claims occurred in Dallas County,
Texas.
2
APA §12.6.
3
1d.
PLAINTIFF’S ORIGINAL PETITION — Page 3
V-
9. Prior to its purchase by Victory Renewables, VicNRG was in the business of (i)
wholesale distribution and marketing of biodiesel, biodiesel blends, diesel, dyed and undyed
biodiesel and biodiesel blends, gasoline, gasohol, kerosene, glycerin, renewable energy credits,
and other similar Wholesale transactions, (ii) marketing, transportation, blending, production and
storage of biofuels, and (iii) buying, selling or trading of biodiesel gallons, low carbon fuel
standard and biodiesel tax-credits and Renewable Identification Numbers (“RINs”). Victory
Renewables was formed to purchase VicNRG and run its former business under that name post-
closing.
10. On or about March 1, 2017, VicNRG and Victory Renewables entered into the
APA, in which VicNRG agreed to sell its business to Victory Renewables in exchange for (i)
$20,000,000 in currently available cash; (ii) seller financing in the forrn of an $8,000,000 loan
from VicNRG to Victory Renewables that is evidenced by the a Promissory Note,4 and (iii) pay
VicNRG the “Estimated Working Capital Overage.”5 While Victory Renewables made the initial
cash payment at closing, it has failed to properly account for and pay VicNRG the Working Capital
Overage.
11. Furthermore, Victory Renewables agreed to pay VicNRG an “Additional Purchase
Price” consisting of three additional payments based on one-half “adjusted EBITDA” for the years
2017, 2018, and 2019.6 Victory Renewables has not only failed to pay all amounts owed as
additional payments to VicNRG, but it has also failed to provide it with the documentation that
Victory Renewables relied upon to make the calculations it says shows VicNRG is not entitled to
additional payments.
4
The Promissory Note between Victory Renewables, LLC (Borrower) and VicNRG, LLC (Lender) in the amount
of $8,000,000 dated March 10, 2017 (the “Note”).
5
APA § 3.1.
6
APA § 3.1(b).
PLAINTIFF’S ORIGINAL PETITION — Page 4
Victory Renewables’ Failure to Properly Refund the Working Capital Overage
12. VicNRG made a “Good Faith Statement” of VicNRG’s Working Capital as of the
day before the APA closed.7 The APA describes how Victory Renewables is to calculate “Actual
”
Working Capita post-closings The parties were to true up any discrepancy between the amounts
by making payments to one another if there had been an “Excess Amount” or a “Deficiency
Amount.” Finally, the parties agreed that if there was a disagreement about the Actual Working
”9 which would then result in
Capital calculation, VicNRG could serve a “Notice of Disagreement,
Victory Renewables providing the books and records necessary to examine the calculation.
13. Victory Renewables calculated Actual Working Capital and paid in accordance
with its calculation. VicNRG noticed its disagreement with this payment and requested books and
records sufficient to examine Victory Renewables’ calculation. Victory Renewables has refused
to provide all the information requested by VicNRG and its accountants, thereby, breaching the
APA.
Victory Renewables’ Failure to Pay the Additional Purchase Price
14. Victory Renewables has failed to fully pay the owed Additional Purchase Price
payments based on EBITDA for 2017, 2018, and 2019. VicNRG has repeatedly requested that
Victory Renewables comply with Section 3.2(a) of the APA and provide VicNRG with its audited
financials, the work product of Victory Renewables’ auditor, KCoe Isom, related to the calculation
of EBITDA for the fiscal year ended December 31, 2019, as well as access to Victory Renewables’
personnel and all records and work papers related to Victory Renewables’ calculation of EBITDA
in 2017, 2018, and 2019. Victory Renewables has failed to do so to date. Victory Renewables has
7
APA § 3.6.
8
APA § 3.6.
9
APA § 3.6(c).
PLAINTIFF’S ORIGINAL PETITION — Page 5
breached the APA as a result.
15. On information and belief, Victory Renewables has provided different entities
different calculations of EBITDA and other financials for the company than it has provided to
VicNRG. Victory Renewables represented the false financials to VicNRG, knowing they were
false, with the intention that VicNRG rely on the incorrect numbers to its detriment. Further, Andy
Wilson on behalf of Victory Renewables expressly represented in 2017 to Mark Paliotta, formerly
of VicNRG, that the EBIDTA calculations would not allocate any corporate overhead to VicNRG.
This promise was repeated in personal meetings between Mr. Paliotta of VicNRG and Defendants
and confirmed in a written memorandum on December 20, 2018 2018 from Fred Raynor, Chief
Financial Officer of Conestoga, to VicNRG. However, Victory Renewables and Conestoga
subsequently took a contrary position to claim a price reduction of $2,529,071.31.
16. Victory Renewables has breached its contract with VicNRG, been unjustly
enriched, and, with Conestoga, committed fraud against VicNRG by not paying the agreed upon
amounts and rightfully earned additional payments for its business, making false representations
to VicNRG, and/or refusing to provide the books and records so that VicNRG may validate
amounts to which it is entitled. VicNRG has been substantially damaged by Victory Renewables’
and Conestoga’s improper conduct that is the subject of this lawsuit.
VI. CAUSES OF ACTION
First Cause of Action: Breach of Contract (Victory Renewables)
17. All the foregoing allegations are incorporated by reference for all purposes.
18. Plaintiff agreed to sell its business to Victory Renewables in exchange for the
promises of valuable consideration. Plaintiff performed its obligations under the APA by, among
other things, allowing transferring all the assets of VicNRG to Victory Renewables at closing.
Victory Renewables failed to perform each of its above enumerated obligations under the APA by
PLAINTIFF’S ORIGINAL PETITION — Page 6
failing to provide the appropriate requested information related to the calculation of Actual
Working Capital, and to make the Additional Purchase Price payments. Victory Renewables has
further refused Plaintiff access to Victory Renewables’ financial books and records in breach of
the APA. Plaintiff has been harmed by Victory Renewables’ breaches. Victory Renewables’
breach of contract has directly and proximately caused damages to Plaintiff that are in excess of
the minimum jurisdictional limits of this Court. Plaintiff is therefore entitled to its damages,
interest, attorneys’ fees and costs.
Second Cause of Action: Promissory Estoppel (All Defendants)
19. All the foregoing allegations are incorporated by reference for all purposes.
20. Victory Renewables and Conestoga made promises to Plaintiff that corporate
overhead would not be allocated to reduce the EBITDA calculations underlying the Additional
Purchase Price payments owed to VicNRG. Plaintiff reasonably and substantially relied on these
representations to its detriment. Plaintiff‘s reliance was foreseeable by Defendants. Injustice can
only by avoided by enforcing Defendants’ promises.
Third Cause of Action: Fraud (All Defendants)
21. All the foregoing allegations are incorporated by reference for all purposes.
22. Victory Renewables and Conestoga made one or more material misrepresentations
of fact. Specifically, Defendants represented to VicNRG in both 2017 and 2018 that corporate
overhead would not be allocated to reduce the EBITDA calculations underlying the Additional
Purchase Price payments. The representations were false. When the representations were made,
the speakers knew they were false or made them recklessly without any knowledge of the truth
and as a positive assertion. Defendants made the representations with the intent the Plaintiff should
act upon it. VicNRG reasonably and justifiably relied on these promises and representations. As a
result, Plaintiff suffered injury. Based on the fraudulent nature of the promises and the
PLAINTIFF’S ORIGINAL PETITION — Page 7
representations, Plaintiff seeks damages, interest and costs.
Fourth Cause of Action: Negligent Misrepresentation (All Defendants)
24. A11 the foregoing allegations are incorporated by reference for all purposes.
25. Defendants made representations to Plaintiff in the course of its business or in
pursuit of a transaction in which they have a personal financial interest. Specifically, Victory
Renewables and Conestoga repeatedly represented to VicNRG in 2017 and 2018 that corporate
overhead would not be allocated to reduce the EBITDA calculations underlying the Additional
Purchase Price payments. Defendants supplied false information to guide VicNRG in its business.
Defendants failed to exercise reasonable care in gathering or disseminating the false information.
VicNRG reasonably and justifiably relied on Defendants’ representations. VicNRG suffered a
financial loss due its justified reliance on Defendants’ representations.
Fifth Cause of Action: Declaratory Judgment (Victory Renewables)
26. Pursuant to Chapter 37 of the Texas Civil Practices and Remedies Code, VicNRG
seeks a declaration that the APA requires that Victory Renewables provide VicNRG sufficient
books and records of the company to test Victory Renewables’ calculation of Actual Working
Capital and EBITDA.
VII. ATTORNEYS’ FEES
27. VicNRG has retained the law offices of Lynn Pinker Hurst & Schwegmann, LLP
to represent VicNRG in this action and has agreed to pay the firm reasonable and necessary
attorneys’ fees. An award of reasonable and necessary attorneys’ fees would be equitable and just
and authorized under Texas Civil Practices and Remedies Code §§ 37.009 and 38.001.
VIII. REQUEST FOR DISCLOSURE
28. Under Texas Rules of Civil Procedure 194 and 195, Plaintiff requests that
Defendants disclose, Within 30 days of Defendant’s answer to Plaintiff’ s Original Petition, the
PLAINTIFF’S ORIGINAL PETITION — Page 8
information or material described in Rules 194 and 195.
IX. NOTICE T0 PARTIES
29. Plaintiff hereby gives notice to all parties of its intent to utilize items produced in
discovery in the trialof this matter and the authenticity of said items is self-proven pursuant to
Rule 193.7 of the Texas Rules of Civil Procedure.
X. PRAYER
Plaintiff respectfully prays that the Court enter judgment in its favor and against Victory
Renewables and Conestoga on each of Plaintiffs claims, as set forth above. Plaintiff prays for the
following:
(l) A judgment be rendered against Victory Renewables and Conestoga for Plaintiff’ s
actual damages resulting from the unlawful conduct described in this petition,
exemplary damages, together with prejudgment interest as provided by law;
(2) A declaration that Victory Renewables must provide its financial books and records
so that VicNRG’s accountants can examine Victory Renewables calculation of
Actual Working Capital and EBITDA for 2017, 2018, and 2019;
(3) A judgment be rendered against Victory Renewables for Plaintiff’s attomeys' fees;
and
(4) A judgment that Plaintiff shall recover all costs of court, post-judgment interest,
and such other and further relief, at law or in equity, to which it may be justly
entitled.
PLAINTIFF’S ORIGINAL PETITION — Page 9
Dated: December 29, 2022 Respectfully submitted,
/s/ Alan Dabdoub
Alan Dabdoub
Texas Bar No. 24056836
Daniel C. Polese
Texas Bar No. 24102364
d olese l nll .com
LYNN PINKER HURST & SCHWEGMANN, LLP
2100 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone: (214) 98 1 -3 800
Facsimile: (214) 981 -3839
ATTORNEYS FOR PLAINTIFF
VICNRG, LLC
PLAINTIFF’S ORIGINAL PETITION — Page 10
Preview
FILED 12/29/2022 8:30 PM FELICIA PITRE 2 CIT ESERVE DISTRICT CLERK JURY DEMAND K§§aLnL§§o§EbE§fi¢$ DC-22-1 7865 CAUSE N0. VicNRG, LLC, § IN THE DISTRICT COURT OF § Plaintiff, § § 14th V. § JUDICIAL DISTRICT § VICTORY RENEWABLES, LLC, and § CONESTOGA ENERGY HOLDINGS, § LLC, § DALLAS COUNTY, TEXAS Defendants. PLAINTIFF’S ORIGINAL PETITION Plaintiff VicNRG, LLC (“VicNRG” or “P1aintiff’) files this its Original Petition complaining of Defendant Victory Renewables, LLC (“Victory Renewables”) and Conestoga Energy Holdings, LLC (“Conestoga” and, collectively, “Defendants”) and would respectfully show the Court as follows: I. NATURE OF THE CASE VicNRG brings this action against Victory Renewables related to Victory Renewables’ failure to perform under the Asset Purchase Agreementl between the parties, as well as Victory Renewables’ and Conestoga’s fraud in failure to perform its obligations in the transaction. Among other things, Victory Renewables promised that itwould pay VicNRG the Estimated Closing Working Capital Overage and pay the Additional Purchase Price described in the APA. Victory Renewables failed to perform each of these promises. Plaintiff contends that not only does Victory Renewables’ failures constitute breach of contract but also Victory Renewables’ and Conestoga’s false representations and unfulfilled promises constitute fraud, promissory estoppel, and negligent 1 The Asset Purchase Agreement by and among VicNRG, LLC (Seller), Victory Renewables, LLC (Buyer), and each of the parties listed on the signature pages thereto, dated effective as of March 1, 2017, as amended by the Amendment to Asset Purchase Agreement, dated January 31, 2020, between VicNRG, LLC and Victory Renewables, LLC (collectively, the “APA). PLAINTIFF’S ORIGINAL PETITION — Page l misrepresentation. Additionally, VicNRG also seeks a declaration from this court that Victory Renewables must provide it with certain documents so that VicNRG may determine Whether calculations Victory Renewables has made that affect VicNRG’s earn out were correct. II. DISCOVERY CONTROL PLAN AND RULE 47 STATEMENT 1. Pursuant to the Texas Rules of Civil Procedure 190, Plaintiff intends discovery to be conducted by a Level 3 discovery control plan and affirmatively pleads that this suit is not governed by the expedited actions process. 2. Plaintiff seeks monetary relief great than $1,000,000.00, inclusive of damages, attorneys’ fees, and costs, in addition to all other relief to which Plaintiff is justly entitled. III. PARTIES 3. VicNRG is a Texas limited liability company with itsprincipal offices in Dallas County, Texas. 4. Victory Renewables is a Kansas limited liability company. Victory Renewables may be served with process through its registered Texas agent of service, Capitol Corporate Services, Inc., at its registered address of 1501 S. Mopac Expressway, Suite 220, Austin, Texas 78746, or wherever it may be found. Additionally, pursuant to Texas Civil Practices and Remedies Code §17.044(b), the Texas Secretary of State is a proper agent for service of process for Victory Renewables. The Texas Secretary of State may be served with citation for Victory Renewables at Service of Process, Texas Secretary of State, P.O. Box 12079, Austin, Texas 7871 l- 2079. Upon receipt of the Citation by the Secretary of State, process should be immediately forwarded by certified mail, return receipt requested to Victory Renewables’ registered agent for service of process Capitol Corporate Services, Inc. at 700 S.W. Jackson Street, Suite 100, Topeka, Kansas 66603. 5. Conestoga Energy Holdings, LLC is a Kansas limited liability company. Pursuant PLAINTIFF’S ORIGINAL PETITION — Page 2 to Texas Civil Practices and Remedies Code §17.044(b), the Texas Secretary of State is a proper agent for service of process for Conestoga. The Texas Secretary of State may be served with citation for Victory Renewables at Service of Process, Texas Secretary of State, P.O. Box 12079, Austin, Texas 78711-2079. Upon receipt of the Citation by the Secretary of State, process should be immediately forwarded by certified mail, return receipt requested to Conestoga’s registered mailing address at 1701 N. Kansas Ave, Liberal, Kansas 67901. IV. JURISDICTION AND VENUE 6. The controversy that is the subject of this suit falls Within the Court’s general jurisdiction as Plaintiff seeks monetary relief in excess of the minimum jurisdictional limits of this Court. Further support for jurisdiction is provided in Article 5, Sections l and 8 of the Texas Constitution and Sections 24.007 and 24.008 of the Texas Government Code. 7. This Court has personal jurisdiction over Victory Renewables because it consented to personal jurisdiction of a state court located in Dallas County, Texas as part of the APA it signed? The Court possesses personal jurisdiction over Conestoga because it has engaged in systematic contacts with Texas and purposefully availed itself of the opportunity to conduct business in Texas such that itshould reasonably expect to be sued in Texas in connection with such contacts. 8. Venue is proper because Victory Renewables consented to venue in Dallas County, Texas in as part of the APA it signed.3 Further, venue is proper because all or a substantial part of the events or omissions giving rise to the claims occurred in Dallas County, Texas. 2 APA §12.6. 3 1d. PLAINTIFF’S ORIGINAL PETITION — Page 3 V- 9. Prior to its purchase by Victory Renewables, VicNRG was in the business of (i) wholesale distribution and marketing of biodiesel, biodiesel blends, diesel, dyed and undyed biodiesel and biodiesel blends, gasoline, gasohol, kerosene, glycerin, renewable energy credits, and other similar Wholesale transactions, (ii) marketing, transportation, blending, production and storage of biofuels, and (iii) buying, selling or trading of biodiesel gallons, low carbon fuel standard and biodiesel tax-credits and Renewable Identification Numbers (“RINs”). Victory Renewables was formed to purchase VicNRG and run its former business under that name post- closing. 10. On or about March 1, 2017, VicNRG and Victory Renewables entered into the APA, in which VicNRG agreed to sell its business to Victory Renewables in exchange for (i) $20,000,000 in currently available cash; (ii) seller financing in the forrn of an $8,000,000 loan from VicNRG to Victory Renewables that is evidenced by the a Promissory Note,4 and (iii) pay VicNRG the “Estimated Working Capital Overage.”5 While Victory Renewables made the initial cash payment at closing, it has failed to properly account for and pay VicNRG the Working Capital Overage. 11. Furthermore, Victory Renewables agreed to pay VicNRG an “Additional Purchase Price” consisting of three additional payments based on one-half “adjusted EBITDA” for the years 2017, 2018, and 2019.6 Victory Renewables has not only failed to pay all amounts owed as additional payments to VicNRG, but it has also failed to provide it with the documentation that Victory Renewables relied upon to make the calculations it says shows VicNRG is not entitled to additional payments. 4 The Promissory Note between Victory Renewables, LLC (Borrower) and VicNRG, LLC (Lender) in the amount of $8,000,000 dated March 10, 2017 (the “Note”). 5 APA § 3.1. 6 APA § 3.1(b). PLAINTIFF’S ORIGINAL PETITION — Page 4 Victory Renewables’ Failure to Properly Refund the Working Capital Overage 12. VicNRG made a “Good Faith Statement” of VicNRG’s Working Capital as of the day before the APA closed.7 The APA describes how Victory Renewables is to calculate “Actual ” Working Capita post-closings The parties were to true up any discrepancy between the amounts by making payments to one another if there had been an “Excess Amount” or a “Deficiency Amount.” Finally, the parties agreed that if there was a disagreement about the Actual Working ”9 which would then result in Capital calculation, VicNRG could serve a “Notice of Disagreement, Victory Renewables providing the books and records necessary to examine the calculation. 13. Victory Renewables calculated Actual Working Capital and paid in accordance with its calculation. VicNRG noticed its disagreement with this payment and requested books and records sufficient to examine Victory Renewables’ calculation. Victory Renewables has refused to provide all the information requested by VicNRG and its accountants, thereby, breaching the APA. Victory Renewables’ Failure to Pay the Additional Purchase Price 14. Victory Renewables has failed to fully pay the owed Additional Purchase Price payments based on EBITDA for 2017, 2018, and 2019. VicNRG has repeatedly requested that Victory Renewables comply with Section 3.2(a) of the APA and provide VicNRG with its audited financials, the work product of Victory Renewables’ auditor, KCoe Isom, related to the calculation of EBITDA for the fiscal year ended December 31, 2019, as well as access to Victory Renewables’ personnel and all records and work papers related to Victory Renewables’ calculation of EBITDA in 2017, 2018, and 2019. Victory Renewables has failed to do so to date. Victory Renewables has 7 APA § 3.6. 8 APA § 3.6. 9 APA § 3.6(c). PLAINTIFF’S ORIGINAL PETITION — Page 5 breached the APA as a result. 15. On information and belief, Victory Renewables has provided different entities different calculations of EBITDA and other financials for the company than it has provided to VicNRG. Victory Renewables represented the false financials to VicNRG, knowing they were false, with the intention that VicNRG rely on the incorrect numbers to its detriment. Further, Andy Wilson on behalf of Victory Renewables expressly represented in 2017 to Mark Paliotta, formerly of VicNRG, that the EBIDTA calculations would not allocate any corporate overhead to VicNRG. This promise was repeated in personal meetings between Mr. Paliotta of VicNRG and Defendants and confirmed in a written memorandum on December 20, 2018 2018 from Fred Raynor, Chief Financial Officer of Conestoga, to VicNRG. However, Victory Renewables and Conestoga subsequently took a contrary position to claim a price reduction of $2,529,071.31. 16. Victory Renewables has breached its contract with VicNRG, been unjustly enriched, and, with Conestoga, committed fraud against VicNRG by not paying the agreed upon amounts and rightfully earned additional payments for its business, making false representations to VicNRG, and/or refusing to provide the books and records so that VicNRG may validate amounts to which it is entitled. VicNRG has been substantially damaged by Victory Renewables’ and Conestoga’s improper conduct that is the subject of this lawsuit. VI. CAUSES OF ACTION First Cause of Action: Breach of Contract (Victory Renewables) 17. All the foregoing allegations are incorporated by reference for all purposes. 18. Plaintiff agreed to sell its business to Victory Renewables in exchange for the promises of valuable consideration. Plaintiff performed its obligations under the APA by, among other things, allowing transferring all the assets of VicNRG to Victory Renewables at closing. Victory Renewables failed to perform each of its above enumerated obligations under the APA by PLAINTIFF’S ORIGINAL PETITION — Page 6 failing to provide the appropriate requested information related to the calculation of Actual Working Capital, and to make the Additional Purchase Price payments. Victory Renewables has further refused Plaintiff access to Victory Renewables’ financial books and records in breach of the APA. Plaintiff has been harmed by Victory Renewables’ breaches. Victory Renewables’ breach of contract has directly and proximately caused damages to Plaintiff that are in excess of the minimum jurisdictional limits of this Court. Plaintiff is therefore entitled to its damages, interest, attorneys’ fees and costs. Second Cause of Action: Promissory Estoppel (All Defendants) 19. All the foregoing allegations are incorporated by reference for all purposes. 20. Victory Renewables and Conestoga made promises to Plaintiff that corporate overhead would not be allocated to reduce the EBITDA calculations underlying the Additional Purchase Price payments owed to VicNRG. Plaintiff reasonably and substantially relied on these representations to its detriment. Plaintiff‘s reliance was foreseeable by Defendants. Injustice can only by avoided by enforcing Defendants’ promises. Third Cause of Action: Fraud (All Defendants) 21. All the foregoing allegations are incorporated by reference for all purposes. 22. Victory Renewables and Conestoga made one or more material misrepresentations of fact. Specifically, Defendants represented to VicNRG in both 2017 and 2018 that corporate overhead would not be allocated to reduce the EBITDA calculations underlying the Additional Purchase Price payments. The representations were false. When the representations were made, the speakers knew they were false or made them recklessly without any knowledge of the truth and as a positive assertion. Defendants made the representations with the intent the Plaintiff should act upon it. VicNRG reasonably and justifiably relied on these promises and representations. As a result, Plaintiff suffered injury. Based on the fraudulent nature of the promises and the PLAINTIFF’S ORIGINAL PETITION — Page 7 representations, Plaintiff seeks damages, interest and costs. Fourth Cause of Action: Negligent Misrepresentation (All Defendants) 24. A11 the foregoing allegations are incorporated by reference for all purposes. 25. Defendants made representations to Plaintiff in the course of its business or in pursuit of a transaction in which they have a personal financial interest. Specifically, Victory Renewables and Conestoga repeatedly represented to VicNRG in 2017 and 2018 that corporate overhead would not be allocated to reduce the EBITDA calculations underlying the Additional Purchase Price payments. Defendants supplied false information to guide VicNRG in its business. Defendants failed to exercise reasonable care in gathering or disseminating the false information. VicNRG reasonably and justifiably relied on Defendants’ representations. VicNRG suffered a financial loss due its justified reliance on Defendants’ representations. Fifth Cause of Action: Declaratory Judgment (Victory Renewables) 26. Pursuant to Chapter 37 of the Texas Civil Practices and Remedies Code, VicNRG seeks a declaration that the APA requires that Victory Renewables provide VicNRG sufficient books and records of the company to test Victory Renewables’ calculation of Actual Working Capital and EBITDA. VII. ATTORNEYS’ FEES 27. VicNRG has retained the law offices of Lynn Pinker Hurst & Schwegmann, LLP to represent VicNRG in this action and has agreed to pay the firm reasonable and necessary attorneys’ fees. An award of reasonable and necessary attorneys’ fees would be equitable and just and authorized under Texas Civil Practices and Remedies Code §§ 37.009 and 38.001. VIII. REQUEST FOR DISCLOSURE 28. Under Texas Rules of Civil Procedure 194 and 195, Plaintiff requests that Defendants disclose, Within 30 days of Defendant’s answer to Plaintiff’ s Original Petition, the PLAINTIFF’S ORIGINAL PETITION — Page 8 information or material described in Rules 194 and 195. IX. NOTICE T0 PARTIES 29. Plaintiff hereby gives notice to all parties of its intent to utilize items produced in discovery in the trialof this matter and the authenticity of said items is self-proven pursuant to Rule 193.7 of the Texas Rules of Civil Procedure. X. PRAYER Plaintiff respectfully prays that the Court enter judgment in its favor and against Victory Renewables and Conestoga on each of Plaintiffs claims, as set forth above. Plaintiff prays for the following: (l) A judgment be rendered against Victory Renewables and Conestoga for Plaintiff’ s actual damages resulting from the unlawful conduct described in this petition, exemplary damages, together with prejudgment interest as provided by law; (2) A declaration that Victory Renewables must provide its financial books and records so that VicNRG’s accountants can examine Victory Renewables calculation of Actual Working Capital and EBITDA for 2017, 2018, and 2019; (3) A judgment be rendered against Victory Renewables for Plaintiff’s attomeys' fees; and (4) A judgment that Plaintiff shall recover all costs of court, post-judgment interest, and such other and further relief, at law or in equity, to which it may be justly entitled. PLAINTIFF’S ORIGINAL PETITION — Page 9 Dated: December 29, 2022 Respectfully submitted, /s/ Alan Dabdoub Alan Dabdoub Texas Bar No. 24056836 Daniel C. Polese Texas Bar No. 24102364 d olese l nll .com LYNN PINKER HURST & SCHWEGMANN, LLP 2100 Ross Avenue, Suite 2700 Dallas, Texas 75201 Telephone: (214) 98 1 -3 800 Facsimile: (214) 981 -3839 ATTORNEYS FOR PLAINTIFF VICNRG, LLC PLAINTIFF’S ORIGINAL PETITION — Page 10