JIM FUGLIE: View From The Prairie — Refinery Company’s Employees Sue For $600,000 In Unpaid Wages

A group of seven former and current (but likely to soon be former) employees of Meridian Energy Group, the California company that wants to build an oil refinery next to Theodore Roosevelt National Park in the North Dakota Bad Lands, has filed a lawsuit against Meridian seeking to recover more than $600,000 in unpaid wages, salaries and bonuses.

The lawsuit is the second legal action filed against the company in eight months. In November, the giant engineering firm SEH filed a mechanic’s lien against the company and some of its officers, seeking payment of about $2.2 million in unpaid bills for work done in planning, engineering and site preparation for the proposed refinery.

The lawsuit by the employees was filed last week in a Texas court, where five of the seven plaintiffs in the case reside. The other two live in Minnesota, which is also the headquarters of SEH. The lawsuit is the latest indication of the company’s shaky financial situation, which has put it about five years behind the original schedule for building the controversial refinery.

According to the “facts” stated in the suit, “As early as the spring of 2018, Defendant (Meridian) began to sporadically defer payment of weekly payroll to employees due to alleged financial woes.” Since then, the company has claimed to be unable to make payroll on a regular basis, the suit alleges, and has enticed some employees to remain in their jobs by telling them their unpaid wages would be doubled, as a “bonus” for their patience, with the bonus to be paid when the company receives project financing.

That “project financing,” the company announced with a big splash of publicity in late 2018, is supposed to come from the giant Manhattan investment banking firm Morgan Stanley, which had signed an agreement to become the lead lender for the project. But that agreement expired in December. As of today, the “project financing” still hasn’t happened. And the employees still haven’t been paid. Hence the lawsuit.

The largest claims against the company are by two current employees.

Julia Olguin, who the suit states was hired by the company as vice president of Marketing and Strategy in 2016, with a $60,000 sign-on bonus and a salary of $161,200 per year, started missing her paychecks in September 2018 and claims to be owed $247,630.28. Olguin no longer is listed as a vice president on the company’s website, but the lawsuit says she is still employed, even though she didn’t get her paycheck as recently as July 10 — just 10 days ago. She lives in Spring, Texas, a suburb of Houston.

Todd Tooley was hired as the company’s operations manager in 2016, at a salary of $135,000 per year, and also started missing paychecks in September 2018. The suit says he is still employed in that role at a salary of $160,000 but also didn’t get his July 10 paycheck. He claims to be owed $192,813.88. Tooley answers the phone when you call the company’s phone at its “corporate offices” in Belfield, N.D., but the number you call, listed on the company’s website, is a Minnesota cell phone. He’s apparently the company’s lone North Dakota employee, although he lives in Minnesota.

If that’s not enough to get you shaking your head, read about the rest of the plaintiffs.

  • Curtis Smith, Cleveland, Texas, who was hired by the company as project manager in November 2018, at a salary of $195,000 a year, started missing paychecks just four months later, and resigned in September 2019 after missing several more paychecks. He was one of the smart ones, getting out quickly, and is owed $57,350.71.
  • Shane Frazier, Houston, was hired as a civil engineer in February 2019, but when his first payday came around a few weeks later in March, he didn’t get a check. He was promised the “bonus” but resigned in September, just seven months after he started, after missing a bunch more paychecks. The company owes him $28,767.18.
  • Thomas Johnson, Duluth, was hired as executive vice president of operations in April 2016, at a salary of $195,000 a year. He started missing paychecks in March 2018 but hung around until May 2019, waiting for his “bonus,” which never happened. He wants $26,197.14.
  • Peter Long, Brookeland, Texas, came on board as planning manager for the company in January 2019. He missed his March paycheck but remained with the company until December 2019. He’s claiming the company owes him $53,084.62.
  • And finally, Celestina Olguin, Huntsville, Texas, is a lowly paid $20 per hour junior analyst who started work for the company in January 2017 and who’s still working at the company despite missing many paychecks. She’s owed $29,482.04, the lawsuit says.

My guess is that Tooley and the two Olguins are soon to be former employees. Pretty hard to go to work when you’re suing your boss. The three are not the only ones who haven’t been paid, I’ve been told. There are others still employed at the company, still missing paychecks, waiting patiently for their back pay and their “bonus.”

And SEH Design/Build is still waiting for its $2.2 million, as far as I can tell. The last time I checked, a couple of weeks ago, the lien is still in place.

My other sources inside the company tell me that Meridian also hasn’t paid the engineering firm McDermott International, which is supposed to be doing the Front End Engineering and Design for the refinery. McDermott quit working on the project last year, I’m told, and filed for bankruptcy this past January, although the company said in a press release a couple of weeks ago it has sold off a bunch of assets, retired some debt and now has emerged from bankruptcy. There’s no word on whether they’re back at work on the refinery project.

Meanwhile, I got a call and a couple of e-mails this past week from another company insider, a senior executive with an investment banking company retained by Meridian to raise institutional funds for the Davis Refinery project. This fellow worked for one of several investment firms hired by Meridian to sell stock in its company that have now bailed out on offering the company’s stock to potential investors because of the company’s shoddy business practices.

I’m still doing a little checking on some of the things he had to say, and I want to talk to the lawyer who represents the seven employees suing Meridian, so I’ll be writing about this a little more in the next couple of days.

I’ll also tell you about one of the company’s executive vice presidents (at least he was as of March of this year), and the corporation’s former general counsel, a lawyer who got disbarred for eating stolen salami. He’s an interesting character. This whole company is full of interesting characters. I hope they just go away one of these days. We don’t need these kinds of people in North Dakota.

Here’s the cover sheet of the lawsuit.

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