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Cause No. 2012-75663
PATRICK O. DEVANEY, — and THE DISTRICT COURT
TRIDENT VENTURES,INC,
Plaintiffs,
VS. HARRIS COUNTY,
QUANTA SERVICES, INC.; QUANTA
GOVERNMENT SOLUTIONS, INC.;
QUANTA GOVERNMENT SERVICES,
INC.;QUANT A INTERNATIONAL JUDICIAL DISTRICT
LIMITED;and JOHN R. COLSON,
Defendants.
PLAINTIFFS’ THIRD AMENDED PETITION
TO THE HONORABLE COURT:
Plaintiffs, Patrick © Devaney, and Trident Ventures, Inc., file this Third Amended
Petition complaining of Defendants Quanta Services, Inc., Quanta Govemment Solutions, Inc.
(“QGS”), Quanta Govemment Services, Inc., Quanta Intemational Limited (“QIL”) and John
Colson (“Colson”) (collectively “Quanta” and/or“Defendants”), and for causewould show:
DISCOVERY CONTROLPLAN
Pursuant Rule 190 of the Texas Rules of Civil Procedure, discovery is intended
to be conducted
under Level 3.
OVERVIEW
This matter is encapsulated a single phrase - “My word is bond.” Devaney
applied this principal to his business dealings; Quanta did not. Plaintiff Patrick Devaney built his
entire life around honoring
his word
and was led _ believe that Colson and Quanta would do the
same. Instead, Colson and Quanta’s words, actions, inactions, and representations were used.
“1
break and sever the bond that was created between Devaney and Quanta from 2011.
Quanta encouraged action Devaney only later take the fruits his work and capital,
all
while ignoring thefoundation
of any newrelationshi —_trust,confidence, andloyalty.
Prior rescuing Quanta Devaney served commanding officer and executive
for various SEAL Teams and U.S. Special Operation groups. During that time, — was entrusted
coordinate, implement and execute large scale, sensitive global special operation projects.
Devaney dedicated most his life protecting national security zealously while also
liberating sovereign people from unscrupulous regimes and rebuilding tom citizens and tom
economies.
Devaney was enticed merge his intemational and govemment platform with the private
infrastructure resources Quanta Services. Devaney breathed new life into Quanta and Colson
through companies Devaney was told were “his” Quanta Govemment Solutions and = anta
Intemational. —_ retum, Quanta and Colson engaged in parasitic actions and preyed
Devaney’s personal and ethical business code. some point after Devaney shook Colson’s hand
and committed Quanta, Colson and his cohorts began dishonor ir words and promises
Devaney andfailed to inform him of their change _ heart.
This case concems greed and self promotion the highest
order through the
intentional, reckless, and unlawful actions and inactions — the executives Quanta Services
Inc. cut Plaintiff Patrick Devaney his rightful share and compensation the
substantial revenue and value that brought =the Quanta companies and shareholders,
including the CEO and Chairman John Colson. Since going public 1998, Quan specialized
in infrastructure construction, upgrade and maintenance services in the electric power and
References herein Mr. Devaney include his company, Trident Ventures, Inc.
telecommumications industries. But approximately with focus thus far limited
North America, Quanta decided wanted expand into the intemational arena where nation
rebuilding projects offered opportunities for lucrative contracts and subcontracts with foreign
govemments, the United States govemment, and large general contractors. Devaney had what
Quanta needed. lead this new direction. decorated former Navy SEAL and Special
Operations commander with strong financial and management background and _ established
residence _ the Middle East, together with U.S. govemment
and Middle East contacts whose
trust had eamed from years of service. Defendant Colson enticed Devaney join forces with
Quanta with the representation, and/or future representations, that Devaney would
organize and lead Quanta’s new govemment and intemational services companies, that Quanta
had the ability
and desire engage large intemational contracts that would Devaney’s
focus, and that Devaney would receive the benefits that with such position. Devaney trusted
Colson and Quanta to honortheir actions and words.
Devaney accepted the mission, ceased operations and plans his own company
Trident Ventures, Inc., which also had govemment and intemational focus Defendants’
request, and spent the next seven years his life creating, marketing, and operating Quanta’s
intemational and govemment based business primarily through Quanta Govemment Solutions
(“QGS”) and Quanta Intemational Limit (“QIL”). Through Devaney’s efforts, QGS, QIL and
affiliated entities generated assisted generatingdozens millions dollas revenues for
themselves other Quanta entities, with hundreds millions dollars additional venture
opportunitiesbrought bear Devaney prior his “terminatio in 2012.
Devaney was awarded The Presidential Unit Citation with Bronze Star (twice), the Bronze Star, the Joint Service
Commendationwith Oak Leaf, and the Navy and Marine Corp Commendation with Bronze Star for his
extraordinary commitment
and service this Country.
There was problem. Despite being formally held the President
andQIL U.S. and foreign govemment officials and private contractors, the Quanta Defendants
ever actually provided Devaney the position and benefits that they represented would have.
Devaney was left with obtaining payment for his services and those hisemployee Kuwait
per diem “consultant” early after using Devaney for they could, Colson’s crony
told Devaney that was longer needed, terminated Quanta’s relationship
with him, and took
over control the companies
from him. None this would have happened Devaney had the
Quanta Defendants, including Colson, mad good their representations merely use
Devaney __ their de facto president
and hold him such — the govemment and intemational
community for their selfish business purposes, but — actually compensate him for his role
founderand isktaker theirventures.
Devaney sues for the wrongful conduct that the Defendants have perpetrated
him, and for the damages resulting from that conduct including limited lost
compensation and other benefits, well for the damages this conduct
has caused
Devaney’
scareer and Trident’s business.
PARTIES
Plaintiff Patrick Devaney, is individual residing in Califomia.
Plaintiff Trident Ventures, Inc. Nevada company operated Patrick
Devaney.
John Colson sident | Hanis County, Texas, and _has appeared and
answeredin this case.
Quanta Services Inc. publicly traded Delaware corporation (“PWR” the
NYSE) headquartered Harris County, Texas, Post Oak Blvd., Suite Houston,
Texasand ithas appeared andanswered this case.
Quanta Govemment Services, Inc. Delaware corporation headquartered
Hanis County, Texas, Post Oak Blvd., Suite Houston, Texas and has
appearedand answered this case.
anta Govemment Solutions, Inc. currently d/b/a Quanta Services Inc.,
Delaware corporation headquartered § Haris County, Texas Post Oak Blvd., Suite
Houston, Texas77056, and hasappeared
and answered in this case.
Quanta Intemational Limited currently d/b/a Quanta Services
Inc. _ part
their Philippines Division, British Virgin Islands entity headquartered Hamis County,
Texas Post Oak Blvd, Suite Houston, Texas and has appeared and
answered n this case.
JURISDICTION AND VENUE
Venue is proper Harris County, Texas, pursuant
to § seq., T IV
RAC ODE, because the Quanta Defendants are located Harris County and all ora
substantialpart the events made the subject _ this suit occurred in Haris County, Texas.
FACTS
Devaney served
in the US Navy on active duty from 1987 until 1992, and again
from 2001 until 2003. In between, and after these dates, he served in the US Navy Reserve
until 2011. His civilian occupation
began with Wall Street investment
bank Kidder Peabody &
Co. in 1983 as a NASD (now FINRA) registered representative. After leaving military activity
duty in 1992, he re registered with the NASD and rejoined his former Kidder Peabody & Co.
colleagues at Canterbury Capital in Newport Beach, CA. In 1996, he started Trident Ventures
and moved to Kuwait to join a boutique investment management company whose clients
included the Govemment of Kuwait, the Govemment of Abu Dhabi, and several wealthy
families in the region. Devaney was chief investment officer for a multi billion portfolio of
teal estate, publicly
traded stocks, and private
equity investments. In September 2001 he was
recalled to active duty and served until August 2003. From August to December 2003 he
worked in Kuwait to re establish his business.
Quanta approached Plaintiff in December 2003, while he was in his Kuwait
office, and induced him to join Quanta in January 2004. Defendants wanted to leverage his
regional presence, his US govemment, and foreign govemment contacts in order to open doors
to anew potential revenue streams
Quanta desired.
Colson was CEO of Quanta Services, an infrastructure construction company
that he founded. Colson was a Vietnam wer veteran. According to Colson’s “Band of
Brother's” colloquialism, his handshake to another vet was stronger than a contract. “Thank
you for your service” rhetoric by Colson, and his repeated assurances to Devaney that if he
forsook his plans for his intemational business, and transferred his business infrastructure and.
contacts to Defendant’s purposes, Colson could ensure Quanta would smooth a transition
“home” for a decorated Navy SEAL .-in Texas where customarily such assurances are
upheld with care and social importance.
This case concems the concerted conduct the Quanta Defendants cut
Plaintiff Patrick Devaney, acting individually and through his company Trident Ventures, Inc.
Devaney
was head operations for the task force that spearheaded 60,000 maninvasionforce South Iraq
has been decorated for his ability plan and brief complex military operations star level commanders,
well execute combat ground force commander.Devaney was awarded _ Presidential Unit Citation with
(collectively “Devaney”), rightful share the substantial revenue and value that
vaney brought the Quanta companies and shareholders, including the CEO and Chairman.
Quanta, John Colson.
Leading the creation Quanta November Colson was president
and the majority owner ParElectrical. the Colson sold Par Electrical form Quanta
and take public, Par had approximately million annual sales and small profit margin.
Colson personally retained approximately million shares Quanta’s stock the transaction
that effectively transferred his rsonal financial
interest from Par Quanta Along the way,
Quanta acquired numerous local electrical and telecom contractor companies and entered into
two strategic investment partnerships, with Enron and second with Utilicorp/Aquila which
was Par/Colson’s long customer. the ensuing years, Enron went bankrupt
and Utilicorp
purchased Enron’s shares Quanta private transaction making Utilicorp the largest single
shareholder Quanta.
Quanta’s largest shareholder, Utilicorp became ssatisfied with Quanta’s
performance. Starting approximately Utilicorp announced __intention take over the
Management Quanta. response, Quanta’s Board adopted “poison pill” tactics that would
result in any changein management control aking any takeovermore expensiveto Utilicorp.
After staving off Utilicorp’s takeover bid, Quanta’s stock value plummeted
Quanta’s stock value and low profitability the company jeopardy. Quanta lost
auditor, Arthur Anderson, bankruptcy. The new auditor, Price Waterhouse Coopers, made
Quanta write off hundreds millions dollars — goodwill (meaning Quanta had overpaid for
the North American companies) and had difficulties with Quanta’s prior financial statements.
Bronze Star (twice), the Bronze Star, the Joint Service Commendation with Oak Leaf Cluster and the Navy and Marine
Quanta’s value dropped from over billion about million. The company
effectively lost its lifeline to new cost effective financing that it needed _ sustain operations, and
cash position dwindled dangerously low levels. The value executive stock ans
Quanta haddropped dramatically well
approximately Quanta made the strategic decision expand labor
intensive business which focused _ infrastructure construction, upgrade and maintenance
services _ the electric power and telecommumications industries into more profitable work
involving U.S. govemment contacts and infrastructure building (or building) projects _ the
Middle East among other places. This decision was made following the initial thrust _ the post
Iraq’ vasion, when the U.S. also was getting involved plans rebuild infrastructure Iraq
and other countries the region, well Africa, which would involve significant govemment
contract work. Quanta saw this potentially new and lucrative portunity, also knew
that Quanta needed outsider
who had the credibility give Defendants access _ these
commercial opportunities (which tum, would appease concems among the Board _ Directors
about Quanta’s dwindling domestic business). So, the fourth quarter Defendants
formed new entity, Quanta Govemment Solutions (“QGS”), which would later become
the govemment and intemational services vehicles that Devaney organized and operated the
benefit — most allthe Quanta companies.
However, prior Devaney’s collaboration with Quanta, from November
Apil Quanta incurred approximately million losses associated with unsuccessful
govemment contract bidding. Quanta’s entire approach U.S. govemment contracting,
particularly offshore, was ineffective and overly costly. This prompted Colson ask Oliver
Corp Commendation with Bronze Star for his extraordinary commitment and service _ this Country
North recommend individual capable procuring and delivering the contracts Defendants
badly wanted. Oliver North wes guest speaker Quanta’s annual gathering senior
management
and presidents the companies owned. North consulted about this request
with Duane Claridge, who was the founding director the CIA’s Counterterrorist Center, and
also General Wayne Downing, the ormer head U.S. Special Operations. Following that,
Patrick Devaney
was recommended the man who could lead Quanta _ their goverment and.
intemationalcontract endeavors.
Acting that recommendation, Defendants Colson and Quanta enticed Devaney
join forces with Quanta Devaney had skill set that Quanta needed for new
govemment and intemational focus. was decorated Navy SEAL and special operations
commander with strong financial and management background and —_establishe residence
the Middle East, together with U.S. govemment and Middle East contacts whose trust — had
eamed from years service. Beginning = early Devaney dedicated the next years
his life organizing and developing Quanta’s intemational and govemment based business,
including through two = Quanta’s newest companies Quanta Govemment Solutions (and
Services, Inc.) and Quanta Intemational Limited. retum, the parent company,
Quanta
Services, Inc., and Colson, the CEO, represented Devaney
that he would __ the president
and lead and organize the govemment and intemational businesses Quanta, which would
operate separately, that Quanta had the capacity, financial wherewithal and willingness engage
large intemation contracts with all they encompassed, and that Devaney would receive the
benefits that with such venture. These types _ representations, and similar ones, were
reiteratedto Devaney continuously during his associationwith Quanta at least until 201
Consistent with these material representations, Defendants’ request, Devaney
ceased operation his own company, Trident Ventures, which had been organized for its own
intemational and govemment business focus. Beginning Devaney oversaw
organization and operations + Quanta’s govemment and intemational services entities. Devaney
hired employees and drafted policies for these new companies. Devaney maintained his existing
residence Kuwait takeadvantage business opportunities for Quanta, and that address
was
used the business addresses the Quanta goverment solutions and intemational services
entities well. Quanta issued business
cards Devaney
that identified him —_ President
Quanta Govemment Solutions and Quanta Intemational, Ltd., and Devaney was regularly held
such U.S. and foreign govemment officials. Devaney attended and made presentations
Presidents’ meetings with Colson and the heads other Quanta companies, and also the
Quanta Board Directors. Organizational
charts identified Devaney the President Quanta
Govemment Solutions, and Devaney reported directly John Colson the Chairman and CEO
the parent company, Quanta Services, Inc. (“PWR’"on the NY SE).
Colson was founder Quanta Services and, had become
the face and
undisputed leader the company. Devaney developed close business and personal
relationship with Colson. They traveled various parts _—‘ the world and made marketing
presentations together. Colson openly acknowledged and introduced Devaney the President
Quanta Govemment Solutions and Quanta Intemational. With that title, Devaney opened
doors for Colson and the Quanta Services brand and technology/know U.S. govemment
and foreig leaders and dignitaries. Colson held Devaney
negotiations and presentations abroad. Devaney shared his business plans and strategies with
Colson
and others senior management Quanta, well the Board Directors. Among
other things, Colson knew that Devaney had taken many __ the plans and strategies
that had
for Trident Ventures and redirected them, and his own energies, skills and talents, the
development Quanta Govemment Solutions and Quanta Intemational. Because Devaney was
Operating through Quanta, rather than through his own company Trident, — spent and
the years after focusing procurement govemment and foreign contracts that the Quanta
Defendants
claimed they had the willingne and financial wherewithal handle
(as opposed
the broader range —_ projects
that Devaney had planned
to execute through his company Trident).
Through all this, Colson continued promote Devaney the President andleader Quanta
Govemment Solutions and Quanta Intemational intemally Quanta, including Board.
Directors, and extemally to Devaney’s contacts and clients. _ short, Colson, using his influence
and power the CEO/Chairman Quanta Services and his ability deliver the
representations made (which continued make and reinforce) Devaney, fostered and
encouraged the confidential relationship and/or joint business venture that developed and
continued between Devaney, Colson and the other Quanta Defendants throu the years.
retum and trust
and reliance __ the representations
made _— the Quanta Defendants, Devaney
gave opportunities that could have pursued individually and/or through Trident, and
continued his mission promote and benefit Quanta through Quanta Govemment Solutions
and Quanta Intemational. All this inured ___ the benefit Colson and other senior executives
Quanta and its affiliates.
There was problem. Quanta never followed through much the high
margin business Quanta claimed wanted. The prospective contracts and ventures that
Devaney originated totaled hundreds millions dollars which, closed, would likely have
subjected aspects Quanta’s business practices __ the violation loan covenants. Perhaps
avoid that scrutiny, for other reasons never explained Devaney, Quanta jettisoned some
the largest and most public opportunities
that had enlisted Devaney procure both home
and abroad. Quanta concealed from Devaney its need kee secret certain aspects its
business practices debt structure, without regard for Devaney _ his business relationships.
Devaney, along with other members _ the QGS team, prepared = detailed
business plan that reflected prior representations and which served as the basis for future
representations = well. The plan included details such six month start —_ period, the two
year ramp period, contemplated two years —_ backlog including million “small jobs”
and million “big jobs,” and cumulative revenue approximately million the
end year two. The plan included further specifics, such the fact that members __ the profit
sharing plan would “own shares the event that Quanta Services ‘spun off’ either OpCo
third party” and. adjusted profit sharing based Quanta Services’ profit less capital cost.”
Devaney fully performed his tems theEquity Agreement.
Consistent with the representations and commitments that were made him
the Defendants, which tumed false, Devaney produced his end the bargain
Devaney generated govemment and intemational contracts and business opportunities for the
Quanta companies that totaled dozens millions dollars actual business, with the potential
for more. Examples some the successes and opportunities that Devaney _his efforts
through the years was instrumental bringing about, assisted _— bringing about, for the
Quanta Defendantsinclude:
Obtainedhundreds workvisas short notice to import Canadianunion
linemenfor restoration work following HumicaneKatrina in 2005, andother
similar projects since then;
U.S.govemment subcontractforU.S. Air Force global indefinite delivery
indefinite quantity Heavy Engineeri Repairing Construction(“HERC”);
Energy servicescontract performed in Chad, Africa with KelloggBrown _—_ Root
andExxon Mobil;
Consulting contractforsmart grid in Karachi, Pakistan;
ized upgradecontract
with City Powerin
South African advance the
2010 World Cup;
Jointventure with Edison Power Group in South Africa and pan Africa;
Securedcompartmented informationfacility contract subcontractor Alutiig;
Subcontractingand. small businesscompliance PG&E contracts + with Quanta
subsidiaries;
Jointventure between Underground Construction (a Quantacompany) and Nova
Groupinvolving upgrading theNavy Fuel Supply System Point Loma, with
U.S.Navy — client;
Underground Construction (_ Quanta company) projectto upgrade Andre Air
ForveBase fuel system; and
Providedestimates and/or secured contract commitments for large projects
Kuwait, India Saudi Arabia, and Iraq.
The revenue Quanta and its shareholders from the projects that went forward exceed
million (notto mention the projectsthat Quanta nixed).
Devaney spent years successfully executing the mission that brought him Quanta,
all the while being touted Quanta the President Quanta’s Intemational
and Quanta
Govemmoent Services, even though ultimately based —_ the empty representations Colson
and others compensatehim thesameway _ they held him extemally the head the
intemational and govemment based businesses that Devaney had come define. early
after using Devaney for all they could including diverting profitable business opportunities from
Plaintiffs, and with the Quanta govemment and intemational services companies poised for
further successes, Colson’s crony told Devaney that wes longer needed, terminated
Quanta’ s relationship with him, and took over control the companies from
ADDITIONAL ESSENTIAL FACTS
Quanta Services, Inc. was and is a publicly traded investment holding company
similar to the portfolio Devaney managed for the Govemment of Kuwait prior to his recall to
active duty in 2001. Quanta’s assets consisted of stock ownership in an underlying federation of
dozens of companies. Quanta’s enterprise value had dropped to $850 million from $4.5 billion.
Quanta
lost $650 milli of investor money, writing off nearly as much as it had paid to
purchase 85 companies in the Quanta federation. Colson lost control of his board to First Reserve
Corporation, a private equity fimn who owned 36% of Quanta’s outstanding stock. Quanta’s
primary industry
was in despair, and the only growth prospects for the company were in non
traditional markets Devaney was hired to pursue.
Colson assured Devaney that in exchange for Devaney’s business strategy,
Devaney’s detailed business plans, Devaney’s govemment, and intemational business contacts to
be adopted by and used by Quanta’s federation of companies Colson promised to deliver to
Devaney an employment contract, and Devaney’ s performance
based compensation plan. Quanta’s
Board approved Devaney’s employment contract in March 2004. Colson approved Devaney’ s
performance compensation plan in July 2005.
Devaney’s performance compensation plan was similar to the acquisition plan
Colson approved for 85 other companies in the Quanta federation, albeit in reverse order.
Nonmally the owners received Quanta shares for the value of a company they built at the time of
acquisition by Quanta. Owing to the green field “start up” characteristics of Quanta’s business
mission headed by Devaney, Colson and Quanta agreed to a percentage value to be set aside in the
form of a carried interest, customary to similarly situated sponsors and promoters of new ventures
Plaintiff's incorporates, factsand reference, all Quanta’s submissions, including but not limited to, form
and definitive proxy soliciting materials filed with the United States Securities and Exchange Commission.
across many industries
in the USA.
Colson told Devaney to develop and set the course for Quanta’s enterprise wide
expansion into uncharted govemment and intemational business, and drop his plans and ongoing
projects at his own company.
Quanta responded in kind to Devaney’s promises. They made Devaney president
of the enterprise wide initiative to forge Quanta’s federation, both by individual operating
company and by combinations of operating companies, into these two new markets. Quanta
repurposed one existing company, Quanta LI Acquisition, Inc. (Delaware) into Quanta
Govemment Solutions, Inc., and purchased an off shore shell entity, Seglow Limited, to become
Quanta Intemational Limited (BVI).
As stated above, on March 17, 2004 Quanta’s independent Executive
Compensation Committee approved Devaney’s employment contract, making him the second
ighest paid employee in the company
next to John Colson. The committee ratified
the contract by
watten resolution. There was one problem, however Colson never delivered the contract to
Devaney.
Instead, Colson and Quanta said one thing to their Investorsabout Devaney’s
mission for QGS, and then sent Devaney down a different path to subsume his expertise, his
valuable contacts, his goodwill, and his valuable
time to create a new performance based business
model that took Quanta 18 months to approve. Quanta
paid nearly $1 million
to Emst and Y oung
to develop a 6 month roadmap, with 590 individual tasks to be accomplished, for the
Quanta Services, Inc. filing and “Company Profile.” Page expenses necessary for Quanta _ establish
Quanta Govemment Solutions business created pursue the significant opportunities the govemment project arena.
To date 2004, Quanta has made important investments _ people, processes, and systems for this initiative which
Quanta believes offers significant near and long term opportunities.Quanta’s strategic decision pursue goverment
contracts long term nature and the Company does not intend abandon this initiative once spending its other
establishment of QGS. Colson demanded one more thing of Devaney, which was for Devaney to
go get the business that would pay for this business plan, amounting
to about $5 million
in net
profit. And Devaney delivered a plethora of opportunities.
Yet, another problem arose unknown
to Devaney. The very same week in July
2005 when Colson approved Devaney’s business plan, including a budget and performance
compensation plan, plans also previously approved by Quanta’s CFO James Haddox, Colson told.
Haddox he never intended to execute Devaney’s performance compensation plan portion of the
broader enterprise initiative.
Instead, Colson and Haddox conspired to keep Devaney bringing in new business
opportunities. Colson and Haddox reviewed and approved the Plan’s annual budgets every year
since, until 2011 when Colson announced publicly that he was assuming Devaney’s role and
responsibilities inside Quanta and made millions for himself in retum.
Starting in 2008, and into 2009 , Quanta purposely began to divert and hide
significant govemment and intemational business that originated from Devaney and his business
Plans and platfonms, to avoid an accounting owed Devaney.
In October 2010, Quanta converted Devaney’s proprietary intellectual and
business property in Kuwait, subsumed for its own benefit in an attempt to acquire a Kuwait
govemment contract, and then abandoned the project without notice in violation of its own
Sarbanes Oxley policies.
Quanta breached its confidential relations with Devaney in October 2010. From.
core industry segments resume. Quanta believes other company strongly positioned leverage these
Opportunities Quanta.
March 2012 Jim O'Neil, Quanta’s new CEO, held investor day conference. The transcript includes
materially misleading quote O'Neil: One __ the strategic initiatives expand internationally outside the
United States vel. will deliberate cautious international expansion strategies. have been
working __ this initiative for the better years
its Houston headquarters, and other US based offices of Quanta, Quanta induced Devaney, who
was physically in Kuwait at the time, to obtain Kuwait’s State secret proprietary information
pertaining to the region power grid so that Quanta could properly pre bid for work for the Kuwait
govemment. Quanta never retumed the secret information to Devaney or the Kuwait govemment.
Quanta put Devaney at great personal risk and destroyed his credibility built over a fifteen year
period.
Further to their cover up in Kuwait, Quanta and its agent defamed Devaney by
accusing him, orally and in a letter addressed
to a Kuwait minister, of fraud and misrepresentation
to the Kuwait Govemment, a crime punishable by seven years in jail. Quanta expressly and
impliedly disclosed to the Kuwait govemment and other interested Kuwait businesses and
individuals that Devaney was not President of Quanta Govemment Solutions, Inc., a title he held
for 7 previous years.
VENTS. DING PTOTHE IDDEN OARD_ PPROVED OMPENSATION _GREEMENT
On December 19, 2003, Doug Link of Quanta Services contacted Devaney via
email in follow
up to a phone call he placedto Devaney
on the same day stating:
Patrick, First of all do you prefer Patrick or Pat? Would it be possible for you to fit a trip to
Houston in while you are back here? We would like you to come into our corporate office
the aftemoon of the 5th of January if possible. We would of course, have an e ticket
waiting for you as well as a carin Houston. Regard Doug Link
On December 30, 2003, Jodi Gehrs of Quanta Services contacted Devaney via email, in
follow up to Doug Link’ sinvitation:
Hi Patrick, I will be forwardingyou two emails. The hotel reservation
is under your name,
but held with Doug's credit card. We will be having a limousine company called “Tiger
Town Car” pick you up from the Airport. On Monday you may contact the Hotel front desk
and ask them about a ride to Quanta Services. They will provide this service for you.
(Quanta is just a few blocks down the road)
On January
2, 2004 Colson agreed to pay Devaney $1,500 per day to assist Quanta bid th
Iraq Reconstruction contract Doug Link of Quanta Services contacted Devaney via email on that
Just in case we miss each other, 11:00@ Quanta's offices at 1360 Post Oak Blvd., Suite
2100, Houston, Texas 77056. Your meeting John Colson CEO, John Wilson President
and me. Colson's secretary is Mary at 713 6401.
On February 5, 2004, Colson submitted to the US Govemment its certified
proposal for two Iraq Reconstruction contracts with a combined value of $1 billion. On page
of Volume III, Quanta detail its organization chart showing Devaney as President, Quanta
Govemment Solutions, Inc. Quanta claimed, as its own, Devaney’s offices in Kuwait and
Baghdad.
On February 26, 2004, Emst & Y oung circulates
the 590 line item task list to get
QGS up and mmning in six months, from notice of award from the US Govemment for the
potential Iraq Reconstruction contract. At that time, Quanta’s largest subsidiary, PAR Electric,
only had revenues of $300 million at that time, making Devaney’s work/venture with Quanta
more than 3 times larger.
On March 15, 2004, Quanta s notified of its unsuccessful
bid for the Iraq
Reconstruction contracts.On March 17, 2004, Colson invites Devaney to make a presentation to
the Quanta Board of Directors, detailing his vision to continue and build QGS. Later the same
day, in Devaney’s absence, Quanta’s independent compensation committee of the Board of
Directors approves, and ratifies by vote and written resolution, Devaney’s employment contract
for $360,000 per annum salary (approximately $1350 per day based on a 5 day, 52 week work
year). The terms include Devaney’ s participation in Quanta’s various executive officer benefits,
perquisites, and stock ownership plans also approved by the Compensation Committee.
olson eamed approximately $612,000.00 in 2004 and Haddox eamed
approximately $322,500.00in 2004. The approved compensation package made Devaney the
second highest paid executive at Quanta as President of Quanta Govemment Solutions, Inc. and a
direct report to the then CEO, John Colson.
EVANEY DISCOVERS HAT OLSON ID THE RITTEN XECUTIVE GREEMENT THAT AD _ EEN
ATIFIED BY THE OARDAND_ REPARED FOR _XECUTION
Colson hid the executive agreement from Devaney and never delivered the
approved contract to Devaney. With executive agreement in hand, on Apmil 7, 2004, Colson
instead requires Devaney to tum over even more details of Devaney’s strategic plan to Colson and
Haddox to “study.” On May 20 2004 Colson incredibly and without disclosure of the approved
compensation agreement unilaterally demands Devaney reduce his monthly consulting retainer fee
from $1500 to $1000 per day.
Devaney continued to press the compensation agreement that the Board had
approved
but not disclosed to Devaney. Devaney did his job despite the hiddenrevenues
an d back
room insider deals. Devaney only discovered the minutes of the Compensation Committee
meeting discussing and ratifying his executive agreement (Devaney still had no knowledge
of the
attached executive agreement
at this time) November, 2013 when Quanta produced the redacted
Board Minutes and compensation agreement in the leventh round of production in this litigation
and buried in over 64,000 separate documents. Colson and Quanta never disclosed the agreement
despite knowledge of its existence and terms.
The first time Devaney could have become aware of the specific contract, with
specific and definite terms, was on February 21 2014, when Quanta produced documents ordered.
by the Court which were previously subject
to the in came _ nspection
Back in 2004, Quanta and Colson engaged in parasitic actions and preyed upon
See Quanta’s definitive proxy statement for Executive Compensation section. reference.
Plaintiff's good faith work product and human capital. At some point after Devaney shook
Colson’s hand and committed to Quanta, Colson and his cohorts began to dishonor their words
and promises to Devaney and failed to inform him of their change of heart when they had a duty
to do so, then and afterward.
HE _ERFORMANCE BASED OMPENSATION LAN
In the aftermath of losing the Iraq Reconstruction bids, Quanta fired its outside
consultants, booked over $1.7 million in attributable losses into Quanta Govemment Solutions, Inc.
in order to shield the other participating sister subsidiaries from expenses that affected their annual
performance bonus, and tumed
to Devaney
to build the business.
he first affirmative step on the road to the Colson approved Performance
Compensation Plan was the presentation Devaney made to Colson and Haddox on April 7, 2004.
Colson approved a comprehensive plan, outlined by Devaney that included a search for suitable
acquisition candidates, the hiring of a govemment contract administrator, and business
development in the Middle East.
The same day, Quanta’s treasurer sent Devaney a business model to work with in
order to value a potential acquisition candidate in the context of Quanta’s consolidated financial
statements.Two days later, on April 9th 2004, Devaney and Quanta made an employment offer to
Ginger James, to be the govemment contract administrator.
On May 4, 2004, Quanta’s general counsel for operations was reporting their
progress toward a joint venture agreement with a potential Middle East businessman
and business
contact Devaney brought to Quant
At the Quanta board meeting held on May 20, 2004 Colson gives an update to the
directors that, a) management still saw opportunity
for work in the middle east, b) the Company
was working with a “sheik” in the middle east who was providing potential opportunities to the
Company, c) the Company may pursue an acquisition of a govemment contractor.
On June 10, 2014 Devaney conducts a meeting with Quanta’s primary functional
department heads, including Treasury, Tax, Human Resources, Accounting, Intemal Controls and
Legal for the start
up of QGS/QIL. A summary
of the progress is provided
to Colson days later.
At the Quanta board meeting held on August 19, 2004, Quanta’s CFO James
Haddox gives an update to the directors that QGS start up costs had decreased, it had two
individuals working for it, and QGS intended to set up a foreign holding company (QIL), and
possibly an additional subsidiary in Dubai.
On September 20, 2004, Quanta’s general counsel for operations provided Devaney
with an update on the set up process, according to the plan Devaney had set forth in coordination
and approval of Colson.
On September 27, 2004, Dana Gordon , Quanta’s general counsel provided
Devaney with an update on the coordinated set up process, with copies to Colson (Chairmana
CEO), Haddox (CFO), Grindstaff (Treasurer), and O’ Brien (Tax).
The week of March 6, 2005, Devaney in coordination with Quanta’s Electric Power
Division, participate as an exhibitor at the Dubai Energy Expo.On April 13, 2005, Devaney
presents an updated business plan, and business capture strategy to Quanta’s executive
Management committee. In the plan is a request for funding, which the CFO requests
a related,
Dana Gordon O’Brien now General Counsel Centerpoint Energy, and married Pete O’ Brien, Quanta’s vice
president for Tax.
Preview
Cause No. 2012-75663 PATRICK O. DEVANEY, — and THE DISTRICT COURT TRIDENT VENTURES,INC, Plaintiffs, VS. HARRIS COUNTY, QUANTA SERVICES, INC.; QUANTA GOVERNMENT SOLUTIONS, INC.; QUANTA GOVERNMENT SERVICES, INC.;QUANT A INTERNATIONAL JUDICIAL DISTRICT LIMITED;and JOHN R. COLSON, Defendants. PLAINTIFFS’ THIRD AMENDED PETITION TO THE HONORABLE COURT: Plaintiffs, Patrick © Devaney, and Trident Ventures, Inc., file this Third Amended Petition complaining of Defendants Quanta Services, Inc., Quanta Govemment Solutions, Inc. (“QGS”), Quanta Govemment Services, Inc., Quanta Intemational Limited (“QIL”) and John Colson (“Colson”) (collectively “Quanta” and/or“Defendants”), and for causewould show: DISCOVERY CONTROLPLAN Pursuant Rule 190 of the Texas Rules of Civil Procedure, discovery is intended to be conducted under Level 3. OVERVIEW This matter is encapsulated a single phrase - “My word is bond.” Devaney applied this principal to his business dealings; Quanta did not. Plaintiff Patrick Devaney built his entire life around honoring his word and was led _ believe that Colson and Quanta would do the same. Instead, Colson and Quanta’s words, actions, inactions, and representations were used. “1 break and sever the bond that was created between Devaney and Quanta from 2011. Quanta encouraged action Devaney only later take the fruits his work and capital, all while ignoring thefoundation of any newrelationshi —_trust,confidence, andloyalty. Prior rescuing Quanta Devaney served commanding officer and executive for various SEAL Teams and U.S. Special Operation groups. During that time, — was entrusted coordinate, implement and execute large scale, sensitive global special operation projects. Devaney dedicated most his life protecting national security zealously while also liberating sovereign people from unscrupulous regimes and rebuilding tom citizens and tom economies. Devaney was enticed merge his intemational and govemment platform with the private infrastructure resources Quanta Services. Devaney breathed new life into Quanta and Colson through companies Devaney was told were “his” Quanta Govemment Solutions and = anta Intemational. —_ retum, Quanta and Colson engaged in parasitic actions and preyed Devaney’s personal and ethical business code. some point after Devaney shook Colson’s hand and committed Quanta, Colson and his cohorts began dishonor ir words and promises Devaney andfailed to inform him of their change _ heart. This case concems greed and self promotion the highest order through the intentional, reckless, and unlawful actions and inactions — the executives Quanta Services Inc. cut Plaintiff Patrick Devaney his rightful share and compensation the substantial revenue and value that brought =the Quanta companies and shareholders, including the CEO and Chairman John Colson. Since going public 1998, Quan specialized in infrastructure construction, upgrade and maintenance services in the electric power and References herein Mr. Devaney include his company, Trident Ventures, Inc. telecommumications industries. But approximately with focus thus far limited North America, Quanta decided wanted expand into the intemational arena where nation rebuilding projects offered opportunities for lucrative contracts and subcontracts with foreign govemments, the United States govemment, and large general contractors. Devaney had what Quanta needed. lead this new direction. decorated former Navy SEAL and Special Operations commander with strong financial and management background and _ established residence _ the Middle East, together with U.S. govemment and Middle East contacts whose trust had eamed from years of service. Defendant Colson enticed Devaney join forces with Quanta with the representation, and/or future representations, that Devaney would organize and lead Quanta’s new govemment and intemational services companies, that Quanta had the ability and desire engage large intemational contracts that would Devaney’s focus, and that Devaney would receive the benefits that with such position. Devaney trusted Colson and Quanta to honortheir actions and words. Devaney accepted the mission, ceased operations and plans his own company Trident Ventures, Inc., which also had govemment and intemational focus Defendants’ request, and spent the next seven years his life creating, marketing, and operating Quanta’s intemational and govemment based business primarily through Quanta Govemment Solutions (“QGS”) and Quanta Intemational Limit (“QIL”). Through Devaney’s efforts, QGS, QIL and affiliated entities generated assisted generatingdozens millions dollas revenues for themselves other Quanta entities, with hundreds millions dollars additional venture opportunitiesbrought bear Devaney prior his “terminatio in 2012. Devaney was awarded The Presidential Unit Citation with Bronze Star (twice), the Bronze Star, the Joint Service Commendationwith Oak Leaf, and the Navy and Marine Corp Commendation with Bronze Star for his extraordinary commitment and service this Country. There was problem. Despite being formally held the President andQIL U.S. and foreign govemment officials and private contractors, the Quanta Defendants ever actually provided Devaney the position and benefits that they represented would have. Devaney was left with obtaining payment for his services and those hisemployee Kuwait per diem “consultant” early after using Devaney for they could, Colson’s crony told Devaney that was longer needed, terminated Quanta’s relationship with him, and took over control the companies from him. None this would have happened Devaney had the Quanta Defendants, including Colson, mad good their representations merely use Devaney __ their de facto president and hold him such — the govemment and intemational community for their selfish business purposes, but — actually compensate him for his role founderand isktaker theirventures. Devaney sues for the wrongful conduct that the Defendants have perpetrated him, and for the damages resulting from that conduct including limited lost compensation and other benefits, well for the damages this conduct has caused Devaney’ scareer and Trident’s business. PARTIES Plaintiff Patrick Devaney, is individual residing in Califomia. Plaintiff Trident Ventures, Inc. Nevada company operated Patrick Devaney. John Colson sident | Hanis County, Texas, and _has appeared and answeredin this case. Quanta Services Inc. publicly traded Delaware corporation (“PWR” the NYSE) headquartered Harris County, Texas, Post Oak Blvd., Suite Houston, Texasand ithas appeared andanswered this case. Quanta Govemment Services, Inc. Delaware corporation headquartered Hanis County, Texas, Post Oak Blvd., Suite Houston, Texas and has appearedand answered this case. anta Govemment Solutions, Inc. currently d/b/a Quanta Services Inc., Delaware corporation headquartered § Haris County, Texas Post Oak Blvd., Suite Houston, Texas77056, and hasappeared and answered in this case. Quanta Intemational Limited currently d/b/a Quanta Services Inc. _ part their Philippines Division, British Virgin Islands entity headquartered Hamis County, Texas Post Oak Blvd, Suite Houston, Texas and has appeared and answered n this case. JURISDICTION AND VENUE Venue is proper Harris County, Texas, pursuant to § seq., T IV RAC ODE, because the Quanta Defendants are located Harris County and all ora substantialpart the events made the subject _ this suit occurred in Haris County, Texas. FACTS Devaney served in the US Navy on active duty from 1987 until 1992, and again from 2001 until 2003. In between, and after these dates, he served in the US Navy Reserve until 2011. His civilian occupation began with Wall Street investment bank Kidder Peabody & Co. in 1983 as a NASD (now FINRA) registered representative. After leaving military activity duty in 1992, he re registered with the NASD and rejoined his former Kidder Peabody & Co. colleagues at Canterbury Capital in Newport Beach, CA. In 1996, he started Trident Ventures and moved to Kuwait to join a boutique investment management company whose clients included the Govemment of Kuwait, the Govemment of Abu Dhabi, and several wealthy families in the region. Devaney was chief investment officer for a multi billion portfolio of teal estate, publicly traded stocks, and private equity investments. In September 2001 he was recalled to active duty and served until August 2003. From August to December 2003 he worked in Kuwait to re establish his business. Quanta approached Plaintiff in December 2003, while he was in his Kuwait office, and induced him to join Quanta in January 2004. Defendants wanted to leverage his regional presence, his US govemment, and foreign govemment contacts in order to open doors to anew potential revenue streams Quanta desired. Colson was CEO of Quanta Services, an infrastructure construction company that he founded. Colson was a Vietnam wer veteran. According to Colson’s “Band of Brother's” colloquialism, his handshake to another vet was stronger than a contract. “Thank you for your service” rhetoric by Colson, and his repeated assurances to Devaney that if he forsook his plans for his intemational business, and transferred his business infrastructure and. contacts to Defendant’s purposes, Colson could ensure Quanta would smooth a transition “home” for a decorated Navy SEAL .-in Texas where customarily such assurances are upheld with care and social importance. This case concems the concerted conduct the Quanta Defendants cut Plaintiff Patrick Devaney, acting individually and through his company Trident Ventures, Inc. Devaney was head operations for the task force that spearheaded 60,000 maninvasionforce South Iraq has been decorated for his ability plan and brief complex military operations star level commanders, well execute combat ground force commander.Devaney was awarded _ Presidential Unit Citation with (collectively “Devaney”), rightful share the substantial revenue and value that vaney brought the Quanta companies and shareholders, including the CEO and Chairman. Quanta, John Colson. Leading the creation Quanta November Colson was president and the majority owner ParElectrical. the Colson sold Par Electrical form Quanta and take public, Par had approximately million annual sales and small profit margin. Colson personally retained approximately million shares Quanta’s stock the transaction that effectively transferred his rsonal financial interest from Par Quanta Along the way, Quanta acquired numerous local electrical and telecom contractor companies and entered into two strategic investment partnerships, with Enron and second with Utilicorp/Aquila which was Par/Colson’s long customer. the ensuing years, Enron went bankrupt and Utilicorp purchased Enron’s shares Quanta private transaction making Utilicorp the largest single shareholder Quanta. Quanta’s largest shareholder, Utilicorp became ssatisfied with Quanta’s performance. Starting approximately Utilicorp announced __intention take over the Management Quanta. response, Quanta’s Board adopted “poison pill” tactics that would result in any changein management control aking any takeovermore expensiveto Utilicorp. After staving off Utilicorp’s takeover bid, Quanta’s stock value plummeted Quanta’s stock value and low profitability the company jeopardy. Quanta lost auditor, Arthur Anderson, bankruptcy. The new auditor, Price Waterhouse Coopers, made Quanta write off hundreds millions dollars — goodwill (meaning Quanta had overpaid for the North American companies) and had difficulties with Quanta’s prior financial statements. Bronze Star (twice), the Bronze Star, the Joint Service Commendation with Oak Leaf Cluster and the Navy and Marine Quanta’s value dropped from over billion about million. The company effectively lost its lifeline to new cost effective financing that it needed _ sustain operations, and cash position dwindled dangerously low levels. The value executive stock ans Quanta haddropped dramatically well approximately Quanta made the strategic decision expand labor intensive business which focused _ infrastructure construction, upgrade and maintenance services _ the electric power and telecommumications industries into more profitable work involving U.S. govemment contacts and infrastructure building (or building) projects _ the Middle East among other places. This decision was made following the initial thrust _ the post Iraq’ vasion, when the U.S. also was getting involved plans rebuild infrastructure Iraq and other countries the region, well Africa, which would involve significant govemment contract work. Quanta saw this potentially new and lucrative portunity, also knew that Quanta needed outsider who had the credibility give Defendants access _ these commercial opportunities (which tum, would appease concems among the Board _ Directors about Quanta’s dwindling domestic business). So, the fourth quarter Defendants formed new entity, Quanta Govemment Solutions (“QGS”), which would later become the govemment and intemational services vehicles that Devaney organized and operated the benefit — most allthe Quanta companies. However, prior Devaney’s collaboration with Quanta, from November Apil Quanta incurred approximately million losses associated with unsuccessful govemment contract bidding. Quanta’s entire approach U.S. govemment contracting, particularly offshore, was ineffective and overly costly. This prompted Colson ask Oliver Corp Commendation with Bronze Star for his extraordinary commitment and service _ this Country North recommend individual capable procuring and delivering the contracts Defendants badly wanted. Oliver North wes guest speaker Quanta’s annual gathering senior management and presidents the companies owned. North consulted about this request with Duane Claridge, who was the founding director the CIA’s Counterterrorist Center, and also General Wayne Downing, the ormer head U.S. Special Operations. Following that, Patrick Devaney was recommended the man who could lead Quanta _ their goverment and. intemationalcontract endeavors. Acting that recommendation, Defendants Colson and Quanta enticed Devaney join forces with Quanta Devaney had skill set that Quanta needed for new govemment and intemational focus. was decorated Navy SEAL and special operations commander with strong financial and management background and —_establishe residence the Middle East, together with U.S. govemment and Middle East contacts whose trust — had eamed from years service. Beginning = early Devaney dedicated the next years his life organizing and developing Quanta’s intemational and govemment based business, including through two = Quanta’s newest companies Quanta Govemment Solutions (and Services, Inc.) and Quanta Intemational Limited. retum, the parent company, Quanta Services, Inc., and Colson, the CEO, represented Devaney that he would __ the president and lead and organize the govemment and intemational businesses Quanta, which would operate separately, that Quanta had the capacity, financial wherewithal and willingness engage large intemation contracts with all they encompassed, and that Devaney would receive the benefits that with such venture. These types _ representations, and similar ones, were reiteratedto Devaney continuously during his associationwith Quanta at least until 201 Consistent with these material representations, Defendants’ request, Devaney ceased operation his own company, Trident Ventures, which had been organized for its own intemational and govemment business focus. Beginning Devaney oversaw organization and operations + Quanta’s govemment and intemational services entities. Devaney hired employees and drafted policies for these new companies. Devaney maintained his existing residence Kuwait takeadvantage business opportunities for Quanta, and that address was used the business addresses the Quanta goverment solutions and intemational services entities well. Quanta issued business cards Devaney that identified him —_ President Quanta Govemment Solutions and Quanta Intemational, Ltd., and Devaney was regularly held such U.S. and foreign govemment officials. Devaney attended and made presentations Presidents’ meetings with Colson and the heads other Quanta companies, and also the Quanta Board Directors. Organizational charts identified Devaney the President Quanta Govemment Solutions, and Devaney reported directly John Colson the Chairman and CEO the parent company, Quanta Services, Inc. (“PWR’"on the NY SE). Colson was founder Quanta Services and, had become the face and undisputed leader the company. Devaney developed close business and personal relationship with Colson. They traveled various parts _—‘ the world and made marketing presentations together. Colson openly acknowledged and introduced Devaney the President Quanta Govemment Solutions and Quanta Intemational. With that title, Devaney opened doors for Colson and the Quanta Services brand and technology/know U.S. govemment and foreig leaders and dignitaries. Colson held Devaney negotiations and presentations abroad. Devaney shared his business plans and strategies with Colson and others senior management Quanta, well the Board Directors. Among other things, Colson knew that Devaney had taken many __ the plans and strategies that had for Trident Ventures and redirected them, and his own energies, skills and talents, the development Quanta Govemment Solutions and Quanta Intemational. Because Devaney was Operating through Quanta, rather than through his own company Trident, — spent and the years after focusing procurement govemment and foreign contracts that the Quanta Defendants claimed they had the willingne and financial wherewithal handle (as opposed the broader range —_ projects that Devaney had planned to execute through his company Trident). Through all this, Colson continued promote Devaney the President andleader Quanta Govemment Solutions and Quanta Intemational intemally Quanta, including Board. Directors, and extemally to Devaney’s contacts and clients. _ short, Colson, using his influence and power the CEO/Chairman Quanta Services and his ability deliver the representations made (which continued make and reinforce) Devaney, fostered and encouraged the confidential relationship and/or joint business venture that developed and continued between Devaney, Colson and the other Quanta Defendants throu the years. retum and trust and reliance __ the representations made _— the Quanta Defendants, Devaney gave opportunities that could have pursued individually and/or through Trident, and continued his mission promote and benefit Quanta through Quanta Govemment Solutions and Quanta Intemational. All this inured ___ the benefit Colson and other senior executives Quanta and its affiliates. There was problem. Quanta never followed through much the high margin business Quanta claimed wanted. The prospective contracts and ventures that Devaney originated totaled hundreds millions dollars which, closed, would likely have subjected aspects Quanta’s business practices __ the violation loan covenants. Perhaps avoid that scrutiny, for other reasons never explained Devaney, Quanta jettisoned some the largest and most public opportunities that had enlisted Devaney procure both home and abroad. Quanta concealed from Devaney its need kee secret certain aspects its business practices debt structure, without regard for Devaney _ his business relationships. Devaney, along with other members _ the QGS team, prepared = detailed business plan that reflected prior representations and which served as the basis for future representations = well. The plan included details such six month start —_ period, the two year ramp period, contemplated two years —_ backlog including million “small jobs” and million “big jobs,” and cumulative revenue approximately million the end year two. The plan included further specifics, such the fact that members __ the profit sharing plan would “own shares the event that Quanta Services ‘spun off’ either OpCo third party” and. adjusted profit sharing based Quanta Services’ profit less capital cost.” Devaney fully performed his tems theEquity Agreement. Consistent with the representations and commitments that were made him the Defendants, which tumed false, Devaney produced his end the bargain Devaney generated govemment and intemational contracts and business opportunities for the Quanta companies that totaled dozens millions dollars actual business, with the potential for more. Examples some the successes and opportunities that Devaney _his efforts through the years was instrumental bringing about, assisted _— bringing about, for the Quanta Defendantsinclude: Obtainedhundreds workvisas short notice to import Canadianunion linemenfor restoration work following HumicaneKatrina in 2005, andother similar projects since then; U.S.govemment subcontractforU.S. Air Force global indefinite delivery indefinite quantity Heavy Engineeri Repairing Construction(“HERC”); Energy servicescontract performed in Chad, Africa with KelloggBrown _—_ Root andExxon Mobil; Consulting contractforsmart grid in Karachi, Pakistan; ized upgradecontract with City Powerin South African advance the 2010 World Cup; Jointventure with Edison Power Group in South Africa and pan Africa; Securedcompartmented informationfacility contract subcontractor Alutiig; Subcontractingand. small businesscompliance PG&E contracts + with Quanta subsidiaries; Jointventure between Underground Construction (a Quantacompany) and Nova Groupinvolving upgrading theNavy Fuel Supply System Point Loma, with U.S.Navy — client; Underground Construction (_ Quanta company) projectto upgrade Andre Air ForveBase fuel system; and Providedestimates and/or secured contract commitments for large projects Kuwait, India Saudi Arabia, and Iraq. The revenue Quanta and its shareholders from the projects that went forward exceed million (notto mention the projectsthat Quanta nixed). Devaney spent years successfully executing the mission that brought him Quanta, all the while being touted Quanta the President Quanta’s Intemational and Quanta Govemmoent Services, even though ultimately based —_ the empty representations Colson and others compensatehim thesameway _ they held him extemally the head the intemational and govemment based businesses that Devaney had come define. early after using Devaney for all they could including diverting profitable business opportunities from Plaintiffs, and with the Quanta govemment and intemational services companies poised for further successes, Colson’s crony told Devaney that wes longer needed, terminated Quanta’ s relationship with him, and took over control the companies from ADDITIONAL ESSENTIAL FACTS Quanta Services, Inc. was and is a publicly traded investment holding company similar to the portfolio Devaney managed for the Govemment of Kuwait prior to his recall to active duty in 2001. Quanta’s assets consisted of stock ownership in an underlying federation of dozens of companies. Quanta’s enterprise value had dropped to $850 million from $4.5 billion. Quanta lost $650 milli of investor money, writing off nearly as much as it had paid to purchase 85 companies in the Quanta federation. Colson lost control of his board to First Reserve Corporation, a private equity fimn who owned 36% of Quanta’s outstanding stock. Quanta’s primary industry was in despair, and the only growth prospects for the company were in non traditional markets Devaney was hired to pursue. Colson assured Devaney that in exchange for Devaney’s business strategy, Devaney’s detailed business plans, Devaney’s govemment, and intemational business contacts to be adopted by and used by Quanta’s federation of companies Colson promised to deliver to Devaney an employment contract, and Devaney’ s performance based compensation plan. Quanta’s Board approved Devaney’s employment contract in March 2004. Colson approved Devaney’ s performance compensation plan in July 2005. Devaney’s performance compensation plan was similar to the acquisition plan Colson approved for 85 other companies in the Quanta federation, albeit in reverse order. Nonmally the owners received Quanta shares for the value of a company they built at the time of acquisition by Quanta. Owing to the green field “start up” characteristics of Quanta’s business mission headed by Devaney, Colson and Quanta agreed to a percentage value to be set aside in the form of a carried interest, customary to similarly situated sponsors and promoters of new ventures Plaintiff's incorporates, factsand reference, all Quanta’s submissions, including but not limited to, form and definitive proxy soliciting materials filed with the United States Securities and Exchange Commission. across many industries in the USA. Colson told Devaney to develop and set the course for Quanta’s enterprise wide expansion into uncharted govemment and intemational business, and drop his plans and ongoing projects at his own company. Quanta responded in kind to Devaney’s promises. They made Devaney president of the enterprise wide initiative to forge Quanta’s federation, both by individual operating company and by combinations of operating companies, into these two new markets. Quanta repurposed one existing company, Quanta LI Acquisition, Inc. (Delaware) into Quanta Govemment Solutions, Inc., and purchased an off shore shell entity, Seglow Limited, to become Quanta Intemational Limited (BVI). As stated above, on March 17, 2004 Quanta’s independent Executive Compensation Committee approved Devaney’s employment contract, making him the second ighest paid employee in the company next to John Colson. The committee ratified the contract by watten resolution. There was one problem, however Colson never delivered the contract to Devaney. Instead, Colson and Quanta said one thing to their Investorsabout Devaney’s mission for QGS, and then sent Devaney down a different path to subsume his expertise, his valuable contacts, his goodwill, and his valuable time to create a new performance based business model that took Quanta 18 months to approve. Quanta paid nearly $1 million to Emst and Y oung to develop a 6 month roadmap, with 590 individual tasks to be accomplished, for the Quanta Services, Inc. filing and “Company Profile.” Page expenses necessary for Quanta _ establish Quanta Govemment Solutions business created pursue the significant opportunities the govemment project arena. To date 2004, Quanta has made important investments _ people, processes, and systems for this initiative which Quanta believes offers significant near and long term opportunities.Quanta’s strategic decision pursue goverment contracts long term nature and the Company does not intend abandon this initiative once spending its other establishment of QGS. Colson demanded one more thing of Devaney, which was for Devaney to go get the business that would pay for this business plan, amounting to about $5 million in net profit. And Devaney delivered a plethora of opportunities. Yet, another problem arose unknown to Devaney. The very same week in July 2005 when Colson approved Devaney’s business plan, including a budget and performance compensation plan, plans also previously approved by Quanta’s CFO James Haddox, Colson told. Haddox he never intended to execute Devaney’s performance compensation plan portion of the broader enterprise initiative. Instead, Colson and Haddox conspired to keep Devaney bringing in new business opportunities. Colson and Haddox reviewed and approved the Plan’s annual budgets every year since, until 2011 when Colson announced publicly that he was assuming Devaney’s role and responsibilities inside Quanta and made millions for himself in retum. Starting in 2008, and into 2009 , Quanta purposely began to divert and hide significant govemment and intemational business that originated from Devaney and his business Plans and platfonms, to avoid an accounting owed Devaney. In October 2010, Quanta converted Devaney’s proprietary intellectual and business property in Kuwait, subsumed for its own benefit in an attempt to acquire a Kuwait govemment contract, and then abandoned the project without notice in violation of its own Sarbanes Oxley policies. Quanta breached its confidential relations with Devaney in October 2010. From. core industry segments resume. Quanta believes other company strongly positioned leverage these Opportunities Quanta. March 2012 Jim O'Neil, Quanta’s new CEO, held investor day conference. The transcript includes materially misleading quote O'Neil: One __ the strategic initiatives expand internationally outside the United States vel. will deliberate cautious international expansion strategies. have been working __ this initiative for the better years its Houston headquarters, and other US based offices of Quanta, Quanta induced Devaney, who was physically in Kuwait at the time, to obtain Kuwait’s State secret proprietary information pertaining to the region power grid so that Quanta could properly pre bid for work for the Kuwait govemment. Quanta never retumed the secret information to Devaney or the Kuwait govemment. Quanta put Devaney at great personal risk and destroyed his credibility built over a fifteen year period. Further to their cover up in Kuwait, Quanta and its agent defamed Devaney by accusing him, orally and in a letter addressed to a Kuwait minister, of fraud and misrepresentation to the Kuwait Govemment, a crime punishable by seven years in jail. Quanta expressly and impliedly disclosed to the Kuwait govemment and other interested Kuwait businesses and individuals that Devaney was not President of Quanta Govemment Solutions, Inc., a title he held for 7 previous years. VENTS. DING PTOTHE IDDEN OARD_ PPROVED OMPENSATION _GREEMENT On December 19, 2003, Doug Link of Quanta Services contacted Devaney via email in follow up to a phone call he placedto Devaney on the same day stating: Patrick, First of all do you prefer Patrick or Pat? Would it be possible for you to fit a trip to Houston in while you are back here? We would like you to come into our corporate office the aftemoon of the 5th of January if possible. We would of course, have an e ticket waiting for you as well as a carin Houston. Regard Doug Link On December 30, 2003, Jodi Gehrs of Quanta Services contacted Devaney via email, in follow up to Doug Link’ sinvitation: Hi Patrick, I will be forwardingyou two emails. The hotel reservation is under your name, but held with Doug's credit card. We will be having a limousine company called “Tiger Town Car” pick you up from the Airport. On Monday you may contact the Hotel front desk and ask them about a ride to Quanta Services. They will provide this service for you. (Quanta is just a few blocks down the road) On January 2, 2004 Colson agreed to pay Devaney $1,500 per day to assist Quanta bid th Iraq Reconstruction contract Doug Link of Quanta Services contacted Devaney via email on that Just in case we miss each other, 11:00@ Quanta's offices at 1360 Post Oak Blvd., Suite 2100, Houston, Texas 77056. Your meeting John Colson CEO, John Wilson President and me. Colson's secretary is Mary at 713 6401. On February 5, 2004, Colson submitted to the US Govemment its certified proposal for two Iraq Reconstruction contracts with a combined value of $1 billion. On page of Volume III, Quanta detail its organization chart showing Devaney as President, Quanta Govemment Solutions, Inc. Quanta claimed, as its own, Devaney’s offices in Kuwait and Baghdad. On February 26, 2004, Emst & Y oung circulates the 590 line item task list to get QGS up and mmning in six months, from notice of award from the US Govemment for the potential Iraq Reconstruction contract. At that time, Quanta’s largest subsidiary, PAR Electric, only had revenues of $300 million at that time, making Devaney’s work/venture with Quanta more than 3 times larger. On March 15, 2004, Quanta s notified of its unsuccessful bid for the Iraq Reconstruction contracts.On March 17, 2004, Colson invites Devaney to make a presentation to the Quanta Board of Directors, detailing his vision to continue and build QGS. Later the same day, in Devaney’s absence, Quanta’s independent compensation committee of the Board of Directors approves, and ratifies by vote and written resolution, Devaney’s employment contract for $360,000 per annum salary (approximately $1350 per day based on a 5 day, 52 week work year). The terms include Devaney’ s participation in Quanta’s various executive officer benefits, perquisites, and stock ownership plans also approved by the Compensation Committee. olson eamed approximately $612,000.00 in 2004 and Haddox eamed approximately $322,500.00in 2004. The approved compensation package made Devaney the second highest paid executive at Quanta as President of Quanta Govemment Solutions, Inc. and a direct report to the then CEO, John Colson. EVANEY DISCOVERS HAT OLSON ID THE RITTEN XECUTIVE GREEMENT THAT AD _ EEN ATIFIED BY THE OARDAND_ REPARED FOR _XECUTION Colson hid the executive agreement from Devaney and never delivered the approved contract to Devaney. With executive agreement in hand, on Apmil 7, 2004, Colson instead requires Devaney to tum over even more details of Devaney’s strategic plan to Colson and Haddox to “study.” On May 20 2004 Colson incredibly and without disclosure of the approved compensation agreement unilaterally demands Devaney reduce his monthly consulting retainer fee from $1500 to $1000 per day. Devaney continued to press the compensation agreement that the Board had approved but not disclosed to Devaney. Devaney did his job despite the hiddenrevenues an d back room insider deals. Devaney only discovered the minutes of the Compensation Committee meeting discussing and ratifying his executive agreement (Devaney still had no knowledge of the attached executive agreement at this time) November, 2013 when Quanta produced the redacted Board Minutes and compensation agreement in the leventh round of production in this litigation and buried in over 64,000 separate documents. Colson and Quanta never disclosed the agreement despite knowledge of its existence and terms. The first time Devaney could have become aware of the specific contract, with specific and definite terms, was on February 21 2014, when Quanta produced documents ordered. by the Court which were previously subject to the in came _ nspection Back in 2004, Quanta and Colson engaged in parasitic actions and preyed upon See Quanta’s definitive proxy statement for Executive Compensation section. reference. Plaintiff's good faith work product and human capital. At some point after Devaney shook Colson’s hand and committed to Quanta, Colson and his cohorts began to dishonor their words and promises to Devaney and failed to inform him of their change of heart when they had a duty to do so, then and afterward. HE _ERFORMANCE BASED OMPENSATION LAN In the aftermath of losing the Iraq Reconstruction bids, Quanta fired its outside consultants, booked over $1.7 million in attributable losses into Quanta Govemment Solutions, Inc. in order to shield the other participating sister subsidiaries from expenses that affected their annual performance bonus, and tumed to Devaney to build the business. he first affirmative step on the road to the Colson approved Performance Compensation Plan was the presentation Devaney made to Colson and Haddox on April 7, 2004. Colson approved a comprehensive plan, outlined by Devaney that included a search for suitable acquisition candidates, the hiring of a govemment contract administrator, and business development in the Middle East. The same day, Quanta’s treasurer sent Devaney a business model to work with in order to value a potential acquisition candidate in the context of Quanta’s consolidated financial statements.Two days later, on April 9th 2004, Devaney and Quanta made an employment offer to Ginger James, to be the govemment contract administrator. On May 4, 2004, Quanta’s general counsel for operations was reporting their progress toward a joint venture agreement with a potential Middle East businessman and business contact Devaney brought to Quant At the Quanta board meeting held on May 20, 2004 Colson gives an update to the directors that, a) management still saw opportunity for work in the middle east, b) the Company was working with a “sheik” in the middle east who was providing potential opportunities to the Company, c) the Company may pursue an acquisition of a govemment contractor. On June 10, 2014 Devaney conducts a meeting with Quanta’s primary functional department heads, including Treasury, Tax, Human Resources, Accounting, Intemal Controls and Legal for the start up of QGS/QIL. A summary of the progress is provided to Colson days later. At the Quanta board meeting held on August 19, 2004, Quanta’s CFO James Haddox gives an update to the directors that QGS start up costs had decreased, it had two individuals working for it, and QGS intended to set up a foreign holding company (QIL), and possibly an additional subsidiary in Dubai. On September 20, 2004, Quanta’s general counsel for operations provided Devaney with an update on the set up process, according to the plan Devaney had set forth in coordination and approval of Colson. On September 27, 2004, Dana Gordon , Quanta’s general counsel provided Devaney with an update on the coordinated set up process, with copies to Colson (Chairmana CEO), Haddox (CFO), Grindstaff (Treasurer), and O’ Brien (Tax). The week of March 6, 2005, Devaney in coordination with Quanta’s Electric Power Division, participate as an exhibitor at the Dubai Energy Expo.On April 13, 2005, Devaney presents an updated business plan, and business capture strategy to Quanta’s executive Management committee. In the plan is a request for funding, which the CFO requests a related, Dana Gordon O’Brien now General Counsel Centerpoint Energy, and married Pete O’ Brien, Quanta’s vice president for Tax.