Porter Hedges Secures $143M+ Victory for Founder of Downhole Technology
Porter Hedges has secured a $143 million courtroom victory representing James Duke VanLue - a Houston inventor, entrepreneur, and founder/CEO of Downhole Technology, LLC (“Downhole”) - against Downhole and its Austrian-owned parent company, Schoeller Bleckmann America, Inc. (SBA). The suit followed Downhole’s firing of VanLue as Downhole’s CEO and refusal to pay him for his share of the company. On November 12, 2020, Judge Caroline Baker entered judgment in Downhole Technology, LLC, et al. v. James Duke VanLue, Civil Action No. 2018-47418, Harris County District Court, rejecting all of Downhole’s claims against Mr. VanLue, holding that Downhole had acted in bad faith, breached fiduciary and contractual duties owed to Mr. VanLue, and that Mr. VanLue prevailed on all of his declaratory judgment and actual damages claims against Downhole and SBA. Judge Baker’s judgment follows a four-week bench trial that concluded in March.
Porter Hedges partner Eric Wade, lead counsel for VanLue said, “Duke VanLue invented a better mousetrap – downhole plugs used in well fracking operations – and built Downhole Technology from startup to an immensely profitable company. We had the great privilege of representing Mr. VanLue, an amazing entrepreneur, and vindicating him against the scurrilous claims made against him to cheat him out of what he was due.”
SBA, a subsidiary of Austrian public company Schoeller Bleckmann Oilfield Equipment AG (SBO), bought a controlling interest in Downhole in 2016 through SBA, and in the following two years under VanLue’s leadership, Downhole’s profits rose over 700%. Downhole then fired VanLue as CEO and SBA reneged on its promise to buy out his 26% interest in the company at a contract price calculated at seven times Downhole’s EBITDA.
At trial, the Porter Hedges team demonstrated Downhole’s outstanding success under VanLue’s leadership increased so exponentially that SBA’s contract obligation to purchase VanLue’s interest in Downhole caused SBO to report losses in its public filings. SBA and Downhole improperly concocted their scheme to terminate VanLue, discredit him by falsely accusing him of theft, deceit, and failure to execute his duties as CEO, and claimed this negated SBA’s obligation to pay the contract price for his interest in Downhole. Instead, SBA wrongfully seized VanLue’s interest in Downhole, paying him nothing. Judge Baker rejected all of SBA and Downhole’s claims against VanLue, and ruled VanLue proved Downhole had no cause to terminate him or seize his interest in Downhole.
Sadly, Mr. VanLue passed away in June.
Downhole has since changed its name to The WellBoss Company.
The amount of VanLue’s recoverable attorneys’ fees remains to be determined by the court. A copy of the Court’s judgment is linked here.