DALLAS (CN) - White Rock Advisors stiffed a consultant for $4.2 million in fees he earned during a metals company merger, the man claims in court.
Bernard V. Carrico sued the corporate and capital advisory firm in Dallas County Court.
Carrico claims he worked for White Rock as an independent consultant since 2007 and spent a year on Metals USA's acquisition of metals distributor The Richardson Trident Co.
"The Trident matter lasted for a year and three days and during that time, Carrico's time was devoted almost exclusively to the project," the complaint states. "Through White Rock's affiliate company Chapman Hext Co. P.C., Carrico was designated the chief restructuring officer on the Trident matter."
Carrico says he handled all day-to-day aspects of the matter and consulted with White Rock managing member Greg Hext.
Hext is not a defendant. The only defendant is White Rock Advisors LLC.
"Carrico's role included preparing the financing memorandum, negotiating forbearance and other agreements with the banks, locating and negotiating with potential lenders and investors, communicating with corporate management, the board of directors, the sole shareholder of Trident and the various professional services firms engaged by Trident, answering the due diligence questions, negotiating the terms of the stock purchase agreement by Metals USA, managing the closing process of the sale to Metals USA and calculating the consulting fees and success fees," the complaint states.
Carrico claims that in the days before the deal closed, he and White Rock were informed that the client was not going to pay the success fees agreed to in the engagement contract.
Closing occurred as scheduled, but the fee dispute went to arbitration and on Oct. 5, 2012, the client was ordered to pay White Rock $6.37 million in success fees, $253,000 in attorneys' fees and $92,000 for costs, according to the complaint.
"Despite efforts to discuss allocation of the fees, no agreement has been reached between Carrico and Hext and no distributions from the award of the success fees have been made to Carrico," the complaint states.
"Additionally, Carrico has not been paid for consulting fees earned during the final pay period of the Trident matter. The estimated total fees owed to Carrico on these matters are approximately $4,276,988.69."
Carrico claims White Rock also owes him for consulting services on several other projects, including those involving First National Bank Southwest, a division of First National Bank of Omaha; ME BioEnergy LLC; Knight & Carver Yacht Center Inc., Integrity Gaming Inc. and Electronics Transaction Consultants Corp. He estimates the company owes him $170,000 for theses.
White Rock, based in Richardson, Texas, provides corporations merger and acquisition services, capital and debt funding services and advisory board membership, according to its website. The firm is affiliated with the accounting firm of Chapman, Hext & Co. P.C. and private equity fund White Rock Venture Fund L.P.
Carrico seeks declaratory and injunctive relief, imposition of a constructive trust, an accounting, and damages for breach of contract.
He is represented by James Drakely with Hiersche Hayward, of Addison.
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