Exhibit 1 0201 -2 9'So�
EXHIBIT 1
CONNECT MIAMI BEACH
OHL Infrastructure Inc. /OHL Community Asphalt
• Numerous hospital construction issues:
o Built hospital in Chile in the early 2000s, 4 individuals died, allegedly due to ICU facility design
o 2014, investigated by Public Prosecutor in Palma de Mallorca for favoritism in the adjudication
of a hospital concession contract
• Catalunya government filed claims for delays & breach of contract re: Barcelona high speed train in
2007; Spanish Ministry of Public Works stated that OHL failed to meet deadlines
• Involvement in "Barcenas Affair" corruption scandal in Spain and allegations from the papers of a
PP party treasurer and senator, Luis Barcenas, that the PP Party in Spain kelp a parallel bookkeeping
system through Swiss bank accounts and that OHL, among others, made undeclared and illegal cash
donations to pay bonuses to senior members of the party; OHL has denied all allegations
• 2015, recordings on the Internet allegedly revealed OHL's Mexico executives discussing ways to
inflate toll rates, bribe judges, &pay for vacations for state officials
• 2015, YouTube video allegedly showing president of OHL subsidiary in Mexico seeking direct help
from the heads of Mexican state companies to win a contract to build a power plant, resulting
investigation led to a fine for inadequacies of its financial reporting; no findings of fraud.
• Feb. 2016, director/controlling shareholder's son-in-law was accused of making illegal payments to
the People's Party in Spain, which he denied
• March 2016, the National Court has been investigating 31 contracts awarded to OHL in relation to
illegal financing of the People's Party
• About 1,150 judgment records in Spain tribunals
o 2 Orange County, California civil cases & 5 Miami-Dade County, Florida civil cases naming
OHL
o Mostly breach of contract, contract indebtness, & unjust enrichment
o 191 Miami-Dade County, Florida civil cases naming Community Asphalt
o Community Asphalt was a named defendant in 57; mostly negligence cases, including:
• Civil tort action in which pedestrian tripped and fell over a pothole on job site causing
severe & permanent injuries; case pending as of June 1, 2016
• Employee injured by allegedly defective, &/or faulty equipment, resulting in employee's
permanent disability; case pending as of June 1, 2016
• Proposal submission disclosures
• Connect Miami Beach did not disclose any litigation for OHL Infrastructure
• Connect Miami Beach disclosed 12 cases and 4 OSHA violations for OHL Community Asphalt
CAF USA
• Beasain, Spain factory was charged with violating environmental regulations; in Jan. 2002,
prosecutor sought to charge director of CAF, mayor, & director of environmental quality of that
county for environmental misconduct at the factory
• 2010, at least 29 asbestos related employee deaths. CAF was court ordered, more than once, to pay
compensation& damages to former employees poisoned during their tenure at their factory
• Anti-Corruption Office of Romania investigated 3 executives of the Bucharest Metro system who
were suspected of accepting bribes from CAF to award bid
• A private Spanish rail company, FESUR, filed a breach of contract claim against CAF for allegedly
failing to provide cars within the described time
• 6 OSHA inspections of CAF USA, resulting in 18 violations
• 2010, as a result of FTA issues with CAF's compliance with"Buy America" requirements for
several federally-funded projects in Houston, a Houston Metro contract was cancelled and had to be
renegotiated to conform
o 2013, Houston Metro & CAF disputed over the timely delivery of 39 light rail cars
o 2015, Houston Metro's CEO alleged a breach of contract when the Metro's lifts where unable to
raise CAF's trains, as well as wheel problems on 14 trains
• Reported issues with Washington D.C.'s railcar
o 4 trains derailed in less than 10 months
o CAF did not provide technical reports & some records were only in Spanish
o Allegations that railcars had faulty software, would not accelerate, had faulty air conditioning,
and would not properly close
o 2002, a woman died because of an alleged defect in door, that resulted in the dragging of her
body while the train was in motion as her arm was caught in the door
o Fire in one car led to identifying a problem in 33 other cars, despite inspections
• Proposal submission disclosures
• Connect Miami Beach did not disclose any litigation matters for CAF
Comsa SAU
• 2013, Chilean Ministry of Public Works began the process to re-bid a highway concession that had
been awarded to Comsa because Comsa had abandoned the project. Comsa argued the Ministry of
Public Works was demanding more than was established in the contract. Jan. 2014, Ministry of
Public Works alleged breach of contract claims; won in arbitration
• 2014-2015, Sumarroca family (key principals of the firm) and corruption allegations:
o Accused in Spain of alleged criminal activity linked to entities affiliated to a municipal mayor.
Numerous government officials were arrested as part of the same investigation that included
breaches of fiduciary duty, embezzlement, money laundering, falsifying documents, & links to
criminal organizations
o Public Prosecutor Anticorruption Office accusing members of the family of money laundering,
crimes against the Fiscal Administrative Office, & falsifying commercial documents to gain
government contracts; the family denied accusations
o 3 family members were detained for alleged illegal commission payments for contracts. The
Public Prosecutor is investigating if the entities the family controls (like Comsa) were used to
funnel illicit payments to gov't officials
o March 2015, Catalunya judge accused another Sumarroca controlled entity of attempting to
influence a government health organization in Spain, so it could be awarded more contracts in
South America
• About 730 judgment records in Spain tribunals, regarding labor disputes, breach of contract and
workplace accidents
• Connect Miami Beach proposal did not disclose any litigation for Comsa SAU
Globalvia Inversiones SAU/Globalvia Infraestructuras SA
• Accused in 2010 of causing environmental damages to protected areas due to inadequate disposal of
waste re: a concession project in Costa Rica
• 2011, filed suit against the Spanish Ministry of Public Works regarding a toll road they claimed was
undervalued because of low traffic; the concession subsequently went bankrupt
• Connect Miami Beach proposal did not disclose any litigation for Globalvia
1
June 22, 2016
Connect Miami Beach
Prepared for: Miami Beach — Office of the City Attorney
MI KrolI .
Private & Confidential
RESTRICTED USE WARNING
This report was prepared by Kroll at the request of the client to whom it is furnished. The client agrees that
reports and information received from Kroll, including this report, are intended solely for the private and
exclusive use of the client only in connection with a business, investment or other commercial purpose. Any
other use(including for employment purposes,credit evaluation or insurance underwriting purposes)is strictly
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portion of its contents shall be subject to prior notice thereof to Kroll. Kroll assumes no direct, indirect or
consequential liability to any third party or any other person who is not the intended addressee of this report
for the information contained herein, its interpretation or applications,or for omissions,or for reliance by any
such third party or other person thereon.To the extent information provided in this report is based on a review
of publicly-available records, such information, as presented, relies upon the accuracy and completeness of
those records,which have not been corroborated by Kroll.Statements herein concerning financial, regulatory
or legal matters should be understood to be general observations based solely on Kroll's experience as risk
consultants and may not be relied upon as financial, regulatory or legal advice,which Kroll is not authorized
to provide. All such matters should be reviewed with appropriately qualified advisors in these areas. THIS
REPORT DOES NOT CONSTITUTE A RECOMMENDATION, ENDORSEMENT, OPINION OR APPROVAL
OF ANY KIND WITH RESPECT TO ANY TRANSACTION,DECISION OR EVALUATION,AND SHOULD NOT
BE RELIED UPON AS SUCH UNDER ANY CIRCUMSTANCES.
2
CONTENTS
1. INTRODUCTION AND METHODOLOGY 4
2. EXECUTIVE SUMMARY 6
2.1.1 Globalvia Inversiones SAU/Globalvia Infraestructuras SA (Spain/U.S.) 6
2.1.2 OHL Infrastructure Inc./OHL Community Asphalt(Spain/U.S.) 6
2.1.3 COMSA SAU(Spain) 7
2.1.4 CAF USA (Spain/U.S.) 7
3. GLOBALVIA INVERSIONES SAU / GLOBALVIA/ INFRAESTRUCTURAS SA 9
3.1 Research in Spain 9
3.1.1 Identification 9
3.1.2 Corporate Structure 10
3.1.3 Media Profile 10
3.1.4 Adverse Public Records 13
3.2 Research in the U.S. I 13
3.2.1 Identification 13
3.2.2 Adverse Public Records 14
4. OHL INFRASTRUCTURE INC. / OHL COMMUNITY ASPHALT 15
4.1 Research in Spain 15
4.1.1 Identification 15
4.1.2 Media Profile 18
4.1.3 Adverse Public Records 21
4.2 Research in the U.S. 23
4.2.1 Identification 23
4.2.2 Adverse Public Records 23
5. COMSA SAU 27
5.1 Identification 27
5.1.1 Ownership 28
5.2 Media Profile 28
5.3 Adverse Public Records I 31
5.3.1 Litigation 31
5.3.2 Regulatory Actions and Compliance Databases 32
6. CAF USA 34
6.1 Research in Spain 34
6.1.1 Identification 34
6.1.2 Media Profile 36
6.1.3 Adverse Public Records 37
6.2 Research in the U.S. I 39
6.2.1 Identification 39
6.2.2 Adverse Public Records 39
3
1
1. INTRODUCTION AND METHODOLOGY
The City of Miami Beach — Office of City Attorney ("the client") has retained Kroll to conduct due
diligence inquiries of the following entities:
• Globalvia Inversiones SAU I Globalvia Infraestructuras SA ("Globalvia") —full scope in
Spain and limited screening inquiries in the U.S.
• OHL Infrastructure, Inc. / OHL Community Asphalt ("OHL") — full scope in Spain and
limited screening inquiries in the U.S.
• COMSA SAU ("COMSA")—full scope in Spain
• CAF USA ("CAF") —full scope in Spain and limited screening inquiries in the U.S.
The objective of Kroll's investigation was to identify material legal proceedings, significant business
or personal controversies, corporate governance issues, undisclosed business interests or any
other issues that might reflect on the subjects' reputation, character or credibility.
In Spain, the investigation included research and analysis of public record sources, including:
corporate registry information; litigation searches,' including research of judgment records on file
with the Supreme Court,the National Audiences,the Provincial Audiences, and the Superior Courts
of Spain; regulatory searches, including the National Securities Market Commission and the
Ministry of Finance and Public Administration;fraud and anti-money laundering database research;
and, a comprehensive Spanish-language media review for any other issues of concern. Kroll notes
that due to Spanish privacy laws, litigation records are not always made publicly-available and as
a result, these searches cannot be considered fully comprehensive.
In the U.S., the investigation included research and analysis of public record sources, including:
civil, criminal and bankruptcy filings in federal and state court jurisdictions, as well as selected local
jurisdictions where research indicated that the subjects have lived and/or worked; lien, judgment
and UCC indices; regulatory filings; business registrations; U.S. Tax Court filings; local, national
and trade media sources; and the Internet. Kroll's investigation included online database research
in available jurisdictions, as well as targeted onsite field research in jurisdictions known to be
affiliated with the subjects.
Kroll's online searches cover jurisdictions that make their information available to third parties.
Certain jurisdictions do not provide their information in this way. Information and periods covered
in criminal searches varies from county-to-county and state-to-state. With respect to criminal
records, some jurisdictions only provide information on felonies whereas many jurisdictions report
convictions only.
Kroll notes that these subject companies are significantly large in size and public profile, many with
global operations and multiple subsidiaries. As a result and due to the narrow budget/scope
restrictions for this first phase of the investigation, Kroll's searches were conducted on the main
bidding entity with additional checks to identify issues with (but not necessarily full summaries of)
the parent companies or sibling subsidiaries. While general international media searches were
conducted, more focused public records searches were only conducted in the jurisdictions noted
above. Further, this first phase relied heavily on readily available media profiles and did not include
In Spain,court documents are not a matter of public record and privacy regulations protect individuals'judicial records.
This limits Kroll's ability to find information such as an individual's or company's criminal record or history,or the current
status of litigation.Consulted databases may contain a non-exhaustive number of judgment rulings.
4
the retrieval or review of all available primary source materials.Additional research in subsequent
phases and as requested by the client can be conducted into any concerns included in this report.
The information contained in this report is based upon a review of publicly-available records. As
such, the information presented relies upon the accuracy of those records, which has not been
corroborated by Kroll.
5
2. EXECUTIVE SUMMARY
2.1.1 Globalvia Inversiones SAU / Globalvia Infraestructuras SA (Spain/U.S.)
The Globalvia group is a Spain-based infrastructure development and management group of
entities that operate highways, railways, hospitals, ports, and other buildings for public use.
Kroll identified thousands of Spanish-language media references to Globalvia and its affiliated
entitites, primarily as news reports on the firm's projects and partnerships with other firms and
governments. Most articles reported upon events and transactions that are normal to the industry.
However, several news articles published in 2010 reported on accusations that Globalvia and its
partners in a concession project in Costa Rica caused environmental damages to protected areas.
Other adverse findings were primarily related to contract disputes or disagreements between the
company and local tax authorities.
Globalvia operates in the United States as Globalvia Infraestructuras USA Corp. ("Globalvia
Infraestructuras"). Globalvia Infraestructuras, a Delaware entity, was incorporated on September
5, 2008.
Kroll identified two state tax liens naming Globalvia Infraestructuras for $672.70 and $146.51 in
Florida and New York, respectively. Both have been satisfied. No criminal or civil litigation naming
the company was identified.
Kroll conducted English-language media research for news involving Globalvia Infraestrucuras. No
derogatory or controversial references to Globalvia Infraestructuras in the United States were
identified.
2.1.2 OHL Infrastructure Inc. / OHL Community Asphalt (Spain/U.S.)
Obrascon Huarte Lain S.A. is a publicly-traded, Spain-based multinational construction and civil
engineering company involved in infrastructure and commercial property construction,
homebuilding, and the operation of toll road and other transport concessions. The company
operates a group of entities in 30 countries and across five continents.
Kroll conducted English and Spanish-language media research for news articles, press releases,
and reports involving OHL and identified thousands of media references to the company and its
affiliated entities. Most of the content identified reported upon OHL's projects and contractual
disputes between the company and other firms or local government offices. However, there were
several instances of adverse media content reporting on OHL and its president regarding fraud,
breaches of fiduciary duty, and other inappropriate practices. Additionally, Kroll found references
to a director of OHL who was detained following "inadequate" construction at a state hospital in
Costa Rica.Ajudge ordered the director to serve three months in prison. Kroll also identified media
articles reporting upon OHL's involvement in the Barcenas Affair, a corruption scandal in Spain
involving the People's Party and evidence that it allegedly kept a parallel bookkeeping system to
record undeclared and illegal cash donations used to pay bonuses to senior members of the party.
Regulatory searches identified various references to allegations of corruption and accounting
inadequacies involving OHL's subsidiary in Mexico, OHL Mexico SAB de CV. In 2015,the company
came under the scrutiny of the Mexican National Banking Securities Commission ("CNBV") after
audio recordings were uploaded to YouTube which appeared to show that the firm's president
seeking direct help from the heads of Mexican state companies to win a USD 476 million contract
to build a power plant. An investigation by the Superior Auditing Office and Secretary of Public
6
Service of the State of Mexico ultimately led to a USD 4.1 million fine from the CNBV over
inadequacies in its financial reporting, though the regulator said there was no evidence of fraud.
OHL Infrastructure Inc. was incorporated in Delaware on June 21, 2013. The company operates
as a subsidiary of the OHL Group in its OHL Concesiones division. Community Asphalt Corporation
was incorporated in Delaware on September 22, 1980. Community Asphalt joined the OHL Group
in 2006 in the company's OHL Construccion division.
Kroll conducted English-language media research for news articles, press releases and other
reports involving the OHL Group and identified more than one hundred thousand media references
to the company and its affiliated entities.These consist primarily of news reports on OHL's projects
and partnerships with other firms. Aside from the issues described in the above Spanish section,
no other derogatory or controversial information naming OHL Infraestrutura was identified.
Kroll identified 201 civil cases naming OHL and/or its affiliates in the United States. Additionally,
Kroll identified one California state tax lien naming OHL in the amount of$29,753, which was filed
in October 2013.The tax lien has since been satisfied.
2.1.3 COMSA SAU (Spain)
COMSA Corporacion is a Spain-based infrastructure and engineering company. Through several
subsidiaries and affiliates, the company primarily operates in the fields of infrastructure and
engineering, services and technology, and concessions and renewable energy.The company is 70
percent owned by the Miarnau family and 30 percent owned by the Sumarroca family, according to
public record sources.
Kroll conducted English and Spanish-language media research for news articles, press releases,
and reports involving Comsa and identified thousands of media references to the company,
primarily news reports on Comsa's projects and contractual disputes with other firms and
government authorities. Kroll identified several instances of adverse content implicating Comsa
and the Sumarroca family. For instance, in 2014 members of the Sumarroca family who were
executives at Comsa were accused of paying illegal comissions to local government officials for
the adjudication of municipal contracts. Other adverse findings included similar references to
Comsa's attempts to influence government officials in exchange for contracts, as well as a long-
standing dispute with the Chilean government over delays in a highway concession project
adjudicated to the constructor in Santiago, Chile. Kroll's litigation research further identified
references to labor disputes/workers' compensation claims initiated by Comsa employees.
2.1.4 CAF USA (Spain / U.S.)
Construcciones y Auxiliar de Ferrocarriles S.A. ("CAF") is a Gipuzkoa, Spain-based company that
manufactures railway vehicles and equipment. Kroll's investigation of CAF's Spanish operations
identified several media reports with adverse content regarding the company.According to Spanish
news sources, CAF's Beasain factory was charged with violating environmental regulations several
times. In addition, at least 33 employees of the factory died from asbestos exposure following their
tenure at the plant. CAF was brought to court several times over the poisoning of their employees
and forced to pay compensation and damages to the widows and families of the victims.
Additionally, news sources also indicate that CAF was under investigation by the Anti-Corruption
Office of Romania in 2015 for allegedly bribing Bucharest Metro officials in CAF's bid for a contract.
In the U.S., Kroll's investigation of CAF USA Inc., CAF's American subsidiary, identified several
instances of litigation naming CAF USA as defendant and one in which they were an intervenor.
Three cases were filed against CAF USA in landlord/tenant disputes regarding unpaid rent,another
was filed against CAF USA for patent infringement, and the case in which CAF USA was an
intervenor was filed against the Cincinnati Enquirer, which sought to publish several companies',
including CAF USA's, proposals for the city's streetcar system,which the companies argued would
disclose trade secrets and proprietary information. Another case, filed against CAF USA in New
York, was in regard to unpaid invoices.
7
Kroll identified three state tax liens naming CAF USA as a debtor, ranging in value from $7,454 to
$44,717.All have been released.
Six Occupational Safety and Health Administration ("OSHA") inspections of CAF USA's Elmira,
New York facility resulted in a total of 18 violations with fine values ranging from $585 to $4,550.
The specific violations were varied, but most were categorized as "serious" in OSHA's database.
Additionally, CAF and the Houston Metro were found in violation of the Federal Transit Authority's
"Buy America" rules, and had an entire contract scrapped and renegotiated due to their attempts
to circumvent the regulation.
Kroll identified a robust media history for CAF USA. The Washington D.C. Metro purchased 192
railcars from CAF for $343 million and had major trouble with the vehicles. The Washington Post
ran an exposé of the problems with the vehicles, including major mechanical troubles, a fire on a
car, software problems, and door issues. The Houston Metro also bought cars from CAF and 14 of
the vehicles had wheel problems.Articles also reported upon GAF's contracts with Boston, Kansas
City, and Cincinnati. The Cincinnati streetcar project experienced major and repeated delays. As
of May 2016, the City was withholding $500,000 from CAF due to late delivery.
8
3. GLOBALVIA INVERSIONES SAU / GLOBALVIA INFRAESTRUCTURAS SA
3.1 Research in Spain
3.1.1 Identification
The Globalvia Group ("the Group") is a Spain-based infrastructure development and management
group of entities that operates highways, railways, hospitals, ports, and other buildings for public
use.The company was formed in 2007 as a result of a partnership between the infrastructure units
of FCC and Caja Madrid (now Bankia).2
Several media references from 2009 and 2010 suggested Globalvia management sought to make
the company public "after the financial recession improves and the company reaches an
appropriate size."3 One publication said the company's initial plans were to add a third partner prior
to making its initial public offering but "failed" in this attempt as well.4 However, in March 2016,
pension funds OPTrust (Canada), PGGM (Netherlands), and USS (UK) acquired 100 percent of
the company's shares in a deal worth EUR 420 million.5 Payment would be in two parts, according
to news sources, with the first EUR 166 million made upon formalization of the operation and the
remainder in the first half of 2017.6
According to public record and news sources, 90 percent of the company's public-private
partnerships are in Spain, with the remaining ten percent in Europe, North America, and South
America.'According to the company's website, the company's three shareholders signed an
agreement in 2013 by which they pledged to contribute EUR 750 million to "facilitate the
development of its current portfolio of concessions, and to initiate future investments."8
In 2011, Globalvia Inversiones S.A. ("Globalvia Inversiones"), a wholly-owned subsidiary of the
Group, was formed as an "investment fund," primarily for the construction of highways and
railways.9 Records maintained by the Spanish Central Mercantile Registry contain the following
details regarding Globalvia Inversiones:
• Name: Globalvia Inversiones, S.A.
• Registry: Madrid
• CIF: A86056736
• Registered Address: Paseo de la Castellana, 280, Madrid, Spain
• Activities: Management, promotion, and development of public
infrastructures, foreign or domestic.
• Authorized Capital: EUR 586,463,360
• Disbursed Capital: EUR 586,463,360
z http://www.globalvia.com/acerca_de_globalvia/historia.aspx?BtnSubMenu=10
3"FCC recortara 1.000 empleos del area corporativa del grupo,"ABC, December 4, 2009.
°"Globalvia no puede esperar mas," Cinco Dias, November 1,2010.
5 http://www.worldhighways.com/categories/auctions-equipment-supply-servicing-finance/news/bankia-and-fcc-sell-
globalvia-to-optrust-uss-and-pggm/
e Ibid.
http://www.worldhighways.com/categories/auctions-equipment-supply-servicing-finance/news/bankia-and-fcc-sell-
globalvia-to-optrust-uss-and-pggm/
http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapld=35639900
8 http://www.globalvia.com/acerca_de_globalvia/inversores.aspx?BtnSubMenu=14
http://www.globalvia.com/acerca_de_globalvia/historia.aspx?BtnSubMenu=10
9
According to commercial databases, Globalvia Inversiones is a subsidiary of Global Via
Infraestructuras, S.A. ("Global Via Infraestructuras"). Records maintained by the Spanish Central
Mercantile Registry contain the following details regarding Global Via Infraestructuras:
• Name: Global Via Infraestructuras, S.A.
• Registry: Madrid
• CIF: A84973056
• Registered Address: Paseo de la Castellana, 280, Madrid, Spain
• Activities: Acquisition, operation, and management of non-resident
investment funds
• Authorized Capital: EUR 670,091,749
• Disbursed Capital: EUR 670,091,749
According to the company's website, Globalvia sales for 2014 were approximately EUR 260
million.10 The following financial figures for 2013 and 2014 were also reported by the company (in
millions of Euros):
2014 2013 Change(%)
2014- 2013
Sales 260,9 211,1 23.6%
Gross Operating Profit 150 126 19.1%
Gross Operating Margin 57.5% 59.7%
3.1.2 Corporate Structure
According to the company's website, the following individuals are members of the company's
management team:
• Javier Perez Fortea —CEO
• Carme Rubio—Audit and Control
• Jose Felipe Gomez de Barreda —General Secretary
• Alberto Garcia —Financial Director
• Belen Castro—Human Resources, Communication, and Corporate Social Responsibility
• Pablo Pajares—Construction and Systems
• Joaquin Madrigal Navarro—Business Development
• Maria Luisa Castro— Highways, Europe
• Javier Martin Rivais— Highways, Latin America
• Daniel Quintero— Railways
3.1.3 Media Profile
Kroll conducted English and Spanish-language media research for news articles, press releases,
and reports involving Globalvia and identified thousands of media references to the company and
its affiliated entities, primarily news reports on Globalvia's projects and partnerships with other
firms. Given the large volume of information pertaining to the company, Kroll's research was
narrowed using the company's name and adverse keywords. The following information pertaining
to the company was identified:
Dispute with Mexican Bank over Acquisition of Chilean Highways
According to news sources published in January 2009, Globalvia submitted two official complaints
with Bancomext, a Mexican bank, in relation to the company's acquisition of two Chilean highways,
Aconcagua and Itata, for USD 553 million. According to Globalvia, one of the highways was
"overvalued and its financial reports did not reflect the real scenario for a concession."11 Business
News America reported that the acquisition process began in September 2008 after the company
70 http://www.globalvia.com/acerca_de_globalvia/informacion_economica.aspx?BtnSubMenu=15
""GlobalVia reclama compensaciOn a Bancomext por dos autopistas,"Business News Americas,January 22, 2009.
10
submitted a bid higher than that of other Spanish firms, including OHL (USD 245 million) and
Abertis (USD 244 million).12
As reported by Cinco Dias, Globalvia said it was owed approximately USD 78 million by Bancomext
for the overvalued sale. The company cited two specific infractions, namely, "improper accounting
practices" and the existence of certain payments owed to the Chilean Ministry of Public Works
("MOP"), which Globalvia claimed the highways'previous owners were financially responsible for.13
In December 2009, Globalvia and Bancomext began an arbitration proceeding to settle the USD
78 million claim issued by the Spanish company.74
Allegations of Environmental Damages Resulting from Highway in Costa Rica
Kroll identified various news articles published in 2010 accusing Globalvia and certain partners in
a concession project in Costa Rica of causing environmental damages to protected areas. The
concession, Autopistas del Sol, included Itinere Infraestructuras — a Sacyr affiliate — and the
Portuguese construction company, Soares da Costa. According to Business News Americas, the
group caused approximately USD 40 million in environmental damages due to the "inadequate
disposal of waste."15
Low Traffic Leads to Suit Against Spanish Ministry of Public Works
According to news sources from 2011, "lack of traffic" on the Murcia highway, Cartagena-Vera,
prompted the concession group Aucosta, comprised of Globalvia, Ploder, CAM, Cajamar and
Bancaja, to file a contentious-administrative suit in the Spanish National Audience court against
the Ministry of Public Works ("Fomento").As reported by Cinco Dias,the concessionaire demanded
"financial equilibrium" of a toll road they claimed was 70 percent undervalued as a result of low
traffic flow.16 Spanish news publication Expansion described the highway project "as a spiral of
unsustainable losses."17
When the contract was initially granted to the group in 2004, the project was valued at EUR 586;
upon completion, total costs amounted to approximately EUR 650 million, but Fomento reportedly
refused to acknowledge the overrun costs.18 The above-referenced Expansion article reported that
Globalvia planned on moving forward with a capital expansion of up to EUR 750 million to help
mitigate the company's losses.19
In December 2011, Aucosta negotiated an agreement with Spanish banks to "avoid bankruptcy."
As reported by newspaper La Verdad, the Cartagena-Vera highway"is not only treading water, but
might go bankrupt unless it's able to refinance its debt."20 In January 2012, La Verdad reported that
the concessionaire was "unable to finalize an agreement with the creditors to refinance its debt of
EUR 500 million."21 The following year, the Cartagena-Vera highway concession, Autocosta, filed
for bankruptcy after failing to refinance its debt, which news sources state amounted to
approximately EUR 550 million.22
Two years later, Accesos de Madrid, another highway concession shared by ACS, Sacyr, Bankia,
Albertis and Globalvia, also declared bankruptcy and reported a debt of EUR 650 million.23
12 Ibid.
13"La concesionaria ultima una inversion de 90 millones en Chile," Cinco Dias, May 12,2009.
4"Globalvia acudira al arbitraje por un conflicto en Chile con Bancomext," Cinco Dias, December 3, 2009.
15"Autopistas del Sol enfrenta acusaciones por danos ambientales avaluados en US$40mn," Business News Americas,
October 21,2010.
16"Ploder,Globalvia y tres cajas de ahorros Ilevan a Fomento a la Audiencia Nacional," Cinco Dias, February 15, 2011.
17—Hay autopistas que podrian suspender pagos este ano,"" Expansion,June 28, 2011.
18 Ibid.
'9 Ibid.
20"La deuda y el bajo trafico aceleran la agonia de la autopista CartagenaVera,"La Verdad, December 13, 2011.
21"La autopista CartagenaVera no logra un acuerdo para refinanciar 500 millones," La Verdad,January 31, 2012.
22 http://www.diariodesevilla.es/article/economia/1453765/la/autopista/veracartagena/entra/concurso/acreedores.html
23"Dos autopistas en liquidaciOn con 900 millones de deuda,"Expansion, May 10, 2016.
11
Contract with Valencian Government Rescinded Amidst Financing Dispute
Kroll identified various news sources published in December 2011 reporting on the "rescission of
the Castellon airport contract signed on March 23 with Globalvia," primary shareholder of
Concesiones Aeroportuarias ("Conaer"), the company that held the concession for the
development of the project infrastructure.24 According to La voz de Galicia, the Valencian
Government revoked the EUR 111 million contract25"in order to save EUR 30 million more in eight
years." The reason cited by the government was that the banks financing the construction had
"increased their demands and conditions."26
Carlos Fabra ("Fabra"), a local politician and President of Aerocas, the public company in charge
of running the airport, said Globalvia expressed "no special interest" in the project, since the
company's primary business line was not airport infrastructure development. One local news
source described Globalvia's departure as the culmination of a "series of misunderstandings and
disagreements" with the Valencian Government.27
In response, Conaer, of which Globalvia held a 60 percent interest in, filed suit against Aerocas in
December 201128 for "breach of contract."29 Globalvia invested approximately EUR 120 million in
the project, according to news sources30 and demanded from the Valencian Government "at least
EUR 126.4 million plus IVA" for terminating the contract.31 In September 2013, the presiding judge
ordered that EUR 120 million be paid to Conaer, but dismissed the company's claims against
Aerocas.32
Other Significant Milestones/Disputes
In November 2013, Globalvia acquired a 30 percent stake of the two subway lines of Barcelona,
becoming the concession's biggest shareholder.33 In January 2014, the company acquired 88.24
percent of shares in the Sevilla subway concession34 after acquiring the shares of ACS, Sacyr,
GEA 21 and CAF.35 According to Luis Sanchez Salmeron, President of the Sevilla Subway, the
acquisition "ensured Globalvia would remain a leader in the operation and management of railway
concessions."36
24"Aerocas rompe con el principal accionista del aeropuerto y se analiza el rescate de la gestion," Las Provincias,
December 31, 2011.
25"Aerocas y Concesiones acuerdan el coste del aeropuerto en 111 millones," El Periodico Mediterraneo, January 11,
2012.
26"La Generalitat rescinde el acuerdo de gestion del aeropuerto de Castellon,"La Voz de Galicia, December 31,2011.
2'"Aerocas rompe con el principal accionista del aeropuerto y se analiza el rescate de la gestion," Las Provincias,
December 31, 2011.
28"Moliner dice que era necesario romper el contrato con la concesionaria del aeropuerto," Europa Press, January 2,
2012.
25"El Conseil rompe el contrato con el gestor privado del aeropuerto y plantea que to asuma AENA," El Mercantil
Valenciano,Januyar 2,2012.
3°"Concesiones,ahogada por las deudas,"Las Provincias,January 23, 2012.
3'"Pleito millonario por el aeropuerto de Castellon,"El Economista,September 6, 2012.
32"El juez rechaza indemnizar a la concesionaria del aeropuerto de Castellon,"Expansion,September 18,2013.
33"La crisis resucita el deseo de tranvia,"Actualidad Economica, November 1,2013.
34"La Junta autoriza la compraventa del 88,24%del capital social en la concesionaria Metro de Sevilla," Europa Press,
January 24, 2014.
35"El Metro de Sevilla es cosa de dos; Globalvia se queda como iinico accionista privado tras comprar su participacion a
Sacyr,Gea 21 y CAF,"El Mundo,March 12, 2014.
36"Junta destaca el"fuerte desembolso publico anual"para mantener el"oxito"del metro de Sevilla,"Europa Press,March
26,2014.
12
3.1.4 Adverse Public Records
3.1.4.1 Litigation
Kroll conducted searches of judgment records on file with the Supreme Court, the National
Audiences, the Provincial Audiences, and the Superior Courts of Spain.37 The following decision
naming the company as a party was identified:
• No. STSJ CV 3634/2015, filed in the Valencia Superior Tribunal of Justice, Contentious-
Administrative Court, on June 9, 2015.
According to the court decision, Global Via lnfraestructuras S.A. ("Global Via
Infraestructuras") filed a contentious administrative appeal against an October 2013
judgment issued by the Economic Administrative Central Court ("TEAC") regarding tax
payments allegedly owed by Terminal Polivalente de Castellon, S.A. ("TPC"), a Global Via
Infraestructuras affiliate.
As stated in the judgment record, Global Via lnfraestructuras was 45 percent owner of TPC,
and later acquired an additional 33.68 percent of the company's shares. Following the
acquisition, in 2009 the TEAC filed a tributary tax claim against TPC, which Global Via
Infraestructuras sought to abolish, claiming that fiscal laws regarding tributary tax
payments did not apply in this case. The TEAC claimed that certain fiscal laws did apply,
and explained that TPC was head of the concession group for terminal B at the Castellon
port in Spain and, for this reason, Global Via Infraestructuras would be the beneficiary of
over 50 percent of the assets and revenue incurred by TPC.
In June 2015,the court ruled against the appeal filed by Global Via Infraestructuras against
the TEAC, and ordered that the company pay certain unspecified costs.
3.1.4.2 Regulatory Actions and Compliance Databases
Kroll searched databases of sanctions, enforcement proceedings, and press releases of various
regulatory agencies, including the National Securities Market Commission and the Ministry of
Finance and Public Administration. Additionally, Kroll searched databases that compile sanctions
lists / watchlists of companies and individuals involved in improper or illegal business practices,
such as money laundering, terrorism financing, corruption, or fraud. No such records naming
Globalvia were identified.
3.2 Research in the U.S.
3.2.1 Identification
According to records maintained by the New York Department of State, Globalvia lnfraestructuras
USA Corp. ("Globalvia Infraestructuras")was incorporated in Delaware on September 5, 2008.The
incorporation record identifies the company's principal office as 801 Brickell Avenue, Suite 912,
Miami, Florida 33131.According to Globalvia's website, its U.S. office is currently located at One
Rockefeller Plaza, 11th Floor, New York, New York 10020.38
News sources from April 2008 reported that the company had opened its first U.S. office, located
in Miami, Florida. Tony Garrastazu, Director of Governmental Relations and Business at Globalvia
and the company's first U.S. employee, commented: "Our objective is to have between 35 and 40
employees, but the global crisis has slowed our expansion."39 According to an annual report issued
37 In Spain,court documents are not a matter of public record and privacy regulations protect individuals'judicial records.
This limits Kroll's ability to find information such as an individual or company's criminal record or history, or the current
status of litigation.These databases contain a large,although not exhaustive,amount of judgment rulings.
38 http://www.globalvia.com/contacto/oficina_usa.aspx?BtnSubMenu=40&BtnSubSubMenu=401
3B""Un cuarto de siglo prestando ayuda,"El Nuevo Herald,July 8,2010.
13
by the Beacon Council, Miami-Dade's economic development agency, Globalvia's new office
included a USD 5 million investment and provided 25 jobs in three years.40
3.2.2 Adverse Public Records
Kroll conducted searches for adverse public records (e.g., civil litigation, criminal records,
judgments, etc.) in the following jurisdictions with which Globalvia Infraestructuras has most
recently been associated:
• Miami-Dade County, Florida41
• Albany County, New York42
• New York County, New York43
Kroll identified no civil litigation or criminal records naming Globalvia Infraestructuras.
3.2.2.1 Bankruptcies, Liens & Judgments
Kroll searched for bankruptcies filed by Globalvia lnfraestructuras as well as any tax liens or
judgments filed against the company. Kroll identified the following tax liens naming Globalvia
Infraestructuras:
Debtor: Global Via Infraestructuras USA Corp.
Creditor: State of Florida
Date: February 1, 2013
Filing Type: State Tax Lien
Filing Location: Miami-Dade County Recorder of Deeds
Amount: $672.70
Status: Released February 20, 2015
Debtor: Global Via Infraestructuras USA
Creditor: State of New York
Date: April 5, 2011
Filing Type: State Tax Lien
Filing Location: Albany County Clerk
Amount: $146.51
Status: Released July 7, 2011
3.2.2.2 Regulatory Actions and Compliance Databases
Kroll found no,regulatory sanctions or litigation, including Securities and Exchange Commission
sanctions or litigation, involving Globalvia Infraestructuras in the United States.
Searches of compliance databases that list those suspected of organized crime, drug trafficking,
money laundering, terrorist activities or corruption found no mention of Globalvia Infraestructuras.
3.2.2.3 Press Reports and Internet
Kroll's review of press reports and Internet pages, including social media sites,found no derogatory
or controversial references to Globalvia lnfraestructuras in the United States.
44 Ibid.
41 Circuit Court/Recorder of Deeds, Miami-Dade County, FL:January 1, 1996—June 10, 2016
4z Circuit Court/Recorder of Deeds,Albany County, NY:January 1, 1996—June 10,2016
43 Supreme Court/Recorder of Deeds, New York County, NY:January 1, 1996—June 10,2016
14
—�f
4. OHL INFRASTRUCTURE INC. / OHL COMMUNITY ASPHALT
4.1 Research in Spain
4.1.1 Identification
Obrascon Huarte Lain S.A. is a publicly-traded, Spain-based multinational construction and civil
engineering company involved in infrastructure and commercial property construction,
homebuilding, and the operation of toll road and other transport concessions. The company
operates a group of entities in 30 countries and across five continents.44 OHL was founded by the
USD 900 million merger in 1999 of the firms Obrascon-Huarte and Construcciones Lain.45 The
company is particularly active in South America through its majority-owned subsidiaries, and also
has a majority-owned American subsidiary in the U.S.46
The company is primarily controlled by Juan Miguel Villar Mir ("Villar Mir") and his family members
through the Grupo Villar Mir and its wholly-owned subsidiary, Inmobiliaria Espacio.47 The Villar Mir
family is ranked #549 on Forbes'list of The World's Billionaires, with their family wealth valued at
USD 3.2 billion.48
Records maintained by the Spanish Central Mercantile Registry contain the following corporate
registration details regarding OHL:
• Name: Obrascon Huarte Lain, S.A.
• Registry: Madrid
• CIF: A48010573
• Registered Address: Paseo de la Castellana, 259-D, Torre Espacio, Madrid, Spain
• Activity: (i) Study and construction of all kinds of construction works, public
or private; (ii) Promotion, development, and construction of
infrastructure,services, and concessions
• Authorized Capital: EUR 179,255,398
• Disbursed Capital: EUR 179,255,398
According to the company's 2015 Annual Report, audited by Deloitte and filed with the Spanish
National Securities Market Commission ("CNMV"), OHL and its subsidiaries primarily engage in
the following activities:
• Concessions — Administrative concessions for infrastructure projects, primarily within
transportation, parking lots, ports, and airports. In 2015, sales and EBITDA increased
approximately 20.7 and 33.6 percent, respectively. However, with the drop of the inflation
rate in Mexico, OHL Mexico's contribution to the group's performance was "significantly
reduced." For more information regarding OHL's operations in Mexico, please refer to the
Regulatory Actions and Compliance Databases section of this report.
• Engineering and Construction — In 2015, sales increased by 20 percent and the group
maintained EBITDA at approximately EUR 139.5 million.
"http://www.ohl.es/en/about-us/presentation/
• http://infrapppworld.com/companies/ohl-concesiones
as http://www.ohl.es/en/about-us/ohl-in-the-world/
• http://www.eldiario.es/economia/Hacienda-Villar-Mir-Tribunal-Cuentas_0_488551660.html
• http://www.forbes.com/profile/juan-miguel-villar-mir/
15
o Construction—All types of civil construction works,for both private and government
clients, within Spain and overseas.
o Industrial — Industrial engineering, particularly within plants and industrial
complexes. Work includes the design, construction, maintenance, operation, and
any other activity involved in oil and gas, energy, engineering of solids and wastes,
and fire hazard systems.
o Services — Service provider for real estate and maintenance of infrastructure for
commercial and residential properties.
• Development— Development of mixed use real estate projects, including hotels. In 2015,
sales increased by 27.2 percent.
Currently, OHL operates the following principal concessions:49
Sociedad Concesionaria Puente Industrial, S.A.
In 2014, OHL was awarded a contract for the design, construction, financing, operation, and
maintenance of the toll highway, Concesion Vial Puente Industrial, which runs from the Bio bridge
in the province of Concepcion, Chile.
•
Terminal Cerros de Valpariso, S.A.
OHL is the lead company for the construction of Terminal 2 in the Valparaiso Airport, Chile.
Autopista Rio Magdalena, S.A.S.
In October 2014, OHL was awarded the concession for the design, financing, construction,
operation, and management of the Rio Magdalena 2 Highway in Colombia for a span of 25 years.
Autovia de Aragon Tramo 1, S.A.
This concession was granted by Spain's Ministry of Public Works ("Fomento") for the first 56km of
the A-2 Highway, Madrid — Barcelona, which begins in Madrid and ends in Guadalajara.
Euroglosa 45 Concesionaria de la Comunidad de Madrid, S.A.
This concession is focused on the 8.3km stretch of the M-45 and A-5 highways, in Madrid.
Metro Ligero Oeste, S.A.
The ML2 and ML3 subway lines connect the municipalities of Pozuelo and Boadilla del Monte with
the Madrid Subway, through the Colonia Jardin stop (Line 10). Line ML2 includes 13 stops, and
ML3 16 stops. According to OHL's Annual Report, this concession is recognized by the Union
Internacional de Transportes Publicos as one of the "best worldwide initiatives"for light railway and
was awarded the "Best European Operative" accolade by the European Rail Awards.
Terminal de Contenedores de Tenerife, S.A.
OHL is the lead entity in the concession group for the construction of the new public terminal at the
East Port of Santa Cruz de Tenerife, which was designed to address traffic flows for import and
export commercial routes from the Mediterranean, Northern Europe, and Asia to Western Africa
and South America.
Terminales Maritimas del Sureste, S.A.
This concession group is focused on the Southern extension of the Alicante Port, a public-private
partnership for which the concessionaire provided financing and construction services.
Autopista Urbana Norte, S.A. de C.V.
The Northern Urban Highway is 9km long, and is part of the northernmost section of the Mexico
City toll highway, which connects the highways of Queretaro, Toluca, and Cuernavaca. It includes
a connecting route to the Viaducto Elevado Bicentenario, and the toll system is fully electronic.
49 Obrascon Huarte Lain,S.A.2015 Annual Report filed with the CNMV.
16
Concesionaria AT-AT, S.A. de C.V
In March 2014, the company's subsidiary in Mexico was awarded a contract to finance, build, and
operate the 74km-long Atizapan-Atlacomulco highway, the company's seventh highway project in
the country. The concession includes the contraction of various tunnels and viaducts.
Concesionaria Mexiquense, S.A. de C.V.
The exterior circuit of the Mexiquense highway, which is 155km long, surrounds the metropolitan
area of Mexico City from North to South on the Eastern front of the city, and from East to West on
the Northern front of the city. The project is structured in four phases; phases I, II, and III are
currently in operation, and altogether are 110km in length. Upon completion,the highway will cross
18 municipalities in the State of Mexico, and will connect four periphery highways.
Grupo Autopistas Nacionales, S.A.
The Amozoc-Perote Highway is 123km long, and is part of the Altiplano highway stretch; it
incorporates 104.9km of highways between Amozoc, Puebla, Perote, Veracruz.
Viaducto Bicentenario, S.A. de C.V.
The Bicentenario Viaduct is an elevated highway that begins in the Northernmost section of the
Mexico Valley Metropolitan Zone, and ends by the 44th kilometer of the Mexico-Queretaro
Highway; it is 32km long. The project is structured in three phases; the first phase is currently
underway.
Autopista del Norte, S.A.C.
The North Highway is 356km long, and connects the Peruvian cities of Pativilca and Trujillo, and
is part of the Panamericana Norte, a main artery that runs through the coast of Peru. Some of the
primary investments include the construction of approximately 284km of the second stretch, and
three beltways in the cities of Huarmey, Casma, and Viru-Chao.
The company's 2015 Annual Report provides the following details regarding OHL's financial results
(in millions of Euros):
2015 2014 Var. (%)
Sales 4,368.9 3,634.1 20.2%
(i) Concessions 444.9 369.3 20.5%
(ii) Engineering and Construction 3,799.5 3,166.9 20%
(iii) Development 124.5 97.9 27.2%
EBITDA 967 1,040.2 -7%.
(I) Concessions 819.8 828.3 -1%
(ii) Engineering and Construction 139.5 198 -29.5%
(iii) Development 7.7 13.9 -44.6%
Total Debt 4,007 5,625.3 -28.8%
4.1.1.1 Ownership and Corporate Structure
As of December 31, 2015, the company's primary shareholders include:5°
Shareholder Direct voting Indirect voting % of voting
rights rights rights
Inmobiliaria Espacio, S.A. 0 150,569,407 50.40%
Invesco Ltd. 0 15,039,528 5.03%
Tyrus Capital Event, S.A.R.L. 25,007,844 0 8.37%
Societe Generale, S.A. 16,618,628 0 5.56%
Indirect Shareholder Through: Direct Shareholder Voting rights
Inmobiliaria Espacio, S.A. Grupo Villar Mir, S.A.U. 102,077,439
Inmobiliaria Espacio, S.A. Espacio Activos Financieros, S.L.U. 31,023,601
Inmobiliaria Espacio, S.A. GVM Debentures LUX1, S.A. 17,468,367
Invesco, Ltd. Invesco Asset Management Limited 14,931,975
50 2015 Annual Corporate Governance Report
17
Indirect Shareholder Through: Direct Shareholder Voting rights
Invesco, Ltd. Other entities total holding 107,553
The company's Board of Directors includes the following individuals:
• Juan-Miguel Villar Mir— Chairman and Shareholding Director(Appointed August 1987)
• Juan Villar-Mir de Fuentes — Vice Chairman and Shareholding Director (Appointed June
1996)
• Josep Pique Camps—Second Vice Chairman and CEO (Appointed October 2013)
• Juan Luis Osuna Gomez—Executive Director(Appointed May 2012)
• Tomas Garcia Madrid —Shareholding Director(Appointed June 1996)
• Javier Lopez Madrid —Shareholding Director (Appointed June 1992)
• Monica de Oriol Icaza — Independent Board Member (Appointed May 2012)
• Silvia Villar-Mir de Fuentes —Shareholding Director(Appointed January 2008)
• Alberto Terol Esteban — Independent Board Member (Appointed May 2010)
• Alvaro Villar-Mir de Fuentes—Shareholding Director (Appointed May 2010)
• Macarena Sainz de Vicuña y Primo de Rivera — Independent Board Member (Appointed
May 2015)
• Reyes Calderon Cuadrado— Independent Board Member(Appointed May 2015)
4.1.2 Media Profile
Kroll conducted Spanish-language media research for news articles, press releases, and reports
involving OHL and identified thousands of media references to the company and its affiliated
entities, primarily news reports on OHL's projects and contractual disputes involving the company,
other firms, and/or local government authorities. Given the large volume of information pertaining
to the company and its subsidiaries, Kroll's research was narrowed using the company's name and
adverse keywords. The following significant milestones in OHL's history and recent disputes
involving the company were identified.
OHL Under Investigation in Chile Over Medical Equipment Flaw
Various news sources from the early 2000s described a series of "faulty installations" in the San
Jose Hospital in Santiago, Chile, built by a concession group led by OHL.According to La Cuarta,
certain medical tubing equipment in the ICU facility originally designed to provide oxygen only let
out air, with some claiming that four individuals in the hospital's ICU died as a result of this
mistake.51
Chilean Deputy Patricio Hales alleged that "we believe the responsibility for this error lies with
those who built the hospital, OHL and the Industria Indura, but also with the Government, because
• they failed to properly supervise the project."52 As reported by Cooperativa, Hales announced he
would petition the Ministry of Health to undertake legal action against the concession group.53
OHL Director Detained for Damages in Hospital Construction Project
Kroll identified a news publication from February 2005 in Hernando Lazo ("Lazo"), OHL's local
Consortium Director, was detained following claims of "inadquate" construction at a state hospital
in Costa Rica. According to an article by the Associated Press, the concession group Obrascon
Huarte Lain-Expansion Exterior("OHL-EE"),was tasked with designing, building and equipping the
hospital in Alajuela, a town approximately 20km northeast of the Costa Rican capital, San Jose.
Upon completion in October 2004, patients and town residents alleged "construction deficiencies"
51 http://wvw.aldia.cr/ad_ee/2005/febrero/27/nacionales2.html
52 http://www.lacuarta.com/diario/2002/04/11/11.05.4a.CRO.SANJOSE.html
5' http://www.cooperativa.cl/noticias/pail/diputado-hales-pide-acciones-legates-por-Pallas-en-hospital-san-jose/2002-04-
10/094900.html
18
including, faulty doors, ill-equipped kitchens, sealed emergency doors, damaged air conditioning
units, among other issues.54 The project was valued at USD 35 million.55
A judge in San Jose ordered Lazo to serve three months in prison as a "suspect of peculation" and
Israel Moya, Assitant Manager of Operations at the Costa Rican Department of Social Security
("CCSS"), was also ordered to serve an unspecified disciplinary sentence.56 OHL, in turn, claimed
that the allegations against the company were due to "lack of personnel and adequate preparation"
on behalf of the hospital management.57 In April 2005, OHL-EE filed a claim against the CCSS for
USD 6 million, claiming "undue excess of costs" in the construction of the hospital.58 The company
claimed the project took a longer time to complete and was costlier than expected.59
Kroll identified articles from 2008 which stated that the hospital in San Jose continued to
experience "structural and administrative damages."60
OHL President Charged with Fraud
In September 2006, the Spanish Anticorruption Public Prosecutor called for a 34-month prison
sentence for OHL President Juan Miguel Villar Mir ("Villar Mir"), who was charged with comitting
"administrative fraud" in the Recol case, a corruption matter involving Villar Mir and several other
Board Members of Internet company, Recol Network, S.A., who were accused of fraud and
conspiracy to manipulate pricing.61 According to news sources, Villar Mir allegedly siphoned EUR
1.5 million from the company through fraudulent accounting practices. 62
Catalunya Government Accuses OHL of Delays, Breach of Contract
Kroll identified various news sources from 2007 stating that the Catalunya Government filed
numerous claims against OHL for delays and "breach of contract" in the contruction of a 1.1km
stretch of the Barcelona high speed train ("AVE"). "A public Catalunyan company is at stake and,
most of all, its citizens,"63 said a local government official in a public statement.
Fomento, the Spanish Ministry of Public Works, said the only issue present in the dispute was
"OHL's ineptitude."64 A Fomento representative stated:
Of the four construction companies involved in the project, OHL is the only one that
has been unable to meet deadlines.All the incidents so far have been concentrated
in the stretch that OHL is managing. They asked us in December for a four-month
extension; in April, another one for three and a half months. We gave them both
and they still have not finished the job, which should have been completed over a
month ago.65
That same month, Mariano Rajoy("Rajoy"), President of the People's Party("PP"), defended OHL,
claiming instead that the government was to blame. In a public statement, Rajoy said the
government used a "cowardly finger" to accuse a company of its own faults.66 According to •
newspaper El Mundo, Villar Mir maintains "good relations"with the head of the political opposition
"Piden prision por danos en hospital costarricense,"AP Spanish Worldstream, February 25,2005.
55"Compania espanola en el ojo de una nueva tormenta en Costa Rica Por Oscar Nunez Olivas,"Agence France Presse,
February 26, 2005.
56 Ibid.
57 Ibid.
56"OHLEE presenta reclamo por seis millones de dolares a Costa Rica,"Agencia EFE,April 29,2005.
5e"Espanoles demandados en Costa Rica reclaman indemnizacion,"AP Spanish Worldstream, May 1, 2005.
60"Fallas enferman al moderno hospital de los alajuelenses,"La Nacion,October 27,2008.
61"Anticorrupcion pide para Villar Mir casi tres anos de cartel,"Marca,September 26,2006.
62"La Fiscalia pide 34 meses de prision para Villar Mir por el'caso Recol',"El Mundo,September 26,2006.
63"Demandas contra la empresa OHL," El Pais,October 24,2007.
86 Ibid.
65 Ibid.
'"Crisis ferroviaria,"El Mundo,October 25,2007.
19
group.67 Xavier Trias, President of Convergence and Union ("CiU"), a Catalan nationalist electoral
alliance in Catalunya, Spain, also signalled out the central government as the "guilty" party in
regards to the AVE problems, and said: "The guilty one is normally not the construction company,
but the one who directs the project."68
OHL, Villa Mir Involvement in Barcenas Affair
Kroll identified media articles citing OHL's involvement in the so-called Barcenas Affair, a corruption
scandal in Spain involving the People's Party ("PP")( and evidence that it allegedly kept a parallel
bookkeeping system to record undeclared and illegal cash donations used to pay bonuses to senior
members of the party. The matter was named after Luis Barcenas ("Barcenas"), former Treasurer
of the PP, who confirmed in court the existence of a PP slush fund scandal.69
In March 2013, the General Secretary of the Socialist Party of Madrid ("PSM"), Tomas Gomez
("Gomez"), asked local government officials why no judicial actions had been filed against OHL,
who "appeared in the papers" of the former PP Treasurer. Gomez stated: "We need a government
in Spain that doesn't 'owe' payments to others. And it's what we've come to defend here today:
let's resolve this issue, which affects many of our neighbors."70
As reported by newspaper Gaceta, Villar Mir was also implicated in the Barcenas Affair, and was
identified as a "donor" in the Barcenas papers. In a hearing at the National Audience, Villar Mir
swore he"never"offered money to political parties, claiming it would be a"serious act of corruption"
to do so.71 "I'm not from the PP or from the PSOE [Spanish Socialist Worker's Party]," he told the
judge. He claimed that even though he knew the former Treasurer Alvaro Lapuerta ("Lapuerta")
and Barcenas, he never spoke with them about adjudication of contract work.72 However,according
to one article, Villar Mir allegedly contacted Lapuerta wishing to donate EUR 300,000 (political
party financing laws limit individual donations at EUR 100,000), and told him he was very interested
in the "head" of the PP and, especially, that Mariano Rajoy, PP leader and Primer Minister, be
informed of his donation.73
Other Incidents/Disputes
Kroll's research identified numerous other articles and media reports regarding the company's
involvement in disputes with local 74 and foreign governments 75 which relate to delays in
construction and breach of contract claims.76
Various articles published in September 2014 also stated that OHL was being investigated by the
local Public Prosecutor in Palma de Mallorca for favoritism in the adjudication of a hospital
concession contract.77 Yet another article detailed several litigation proceedings involving OHL
projects, specifically with regards to the company's operations in Mexico through its subsidiary,
OHL Mexico SAB de CV("OHL Mexico").78 In 2015, recordings emerged on the Internet purporting
to reveal OHL Mexico executives discussing ways to inflate toll rates, bribe judges, and pay for a
state official's Christmas-week stay at a luxury Caribbean beach hotel.79 For more information
87 Ibid.
66"Triasexime a la constructora OHL de los problemas en las obras del AVE y culpa al Gobierno central,"Europa Press,
October 27, 2007.
6B www.ft.com/cros/s/0/4feec248-186b-11e2-b4c4-00144feabdc0.html+8,cd=4&hl=en&ct=clnk&gl=us#axzz4Bg2G8u7j
70"Gomez pregunta por que no se han pedido responsabilidades a OHL, "que aparece en los papeles de Barcenas,""
Europa Press, March 15, 2013.
71"Jose Luis Moreno done)unos 60.000 euros,que se incluyeron en la contabilidad B,"La Nueva Espana,July 17, 2013.
72"Villar Mir asegura al juez que'nunca'dono dinero al PP," Gaceta, May 28,2013.
"Una donation ilegal para la campana electoral del 2011,"El Periodico Extremadura,July 16,2013.
74"OHL pide concurso voluntario para su concesionaria de cercanias M6stolesNavalcarnero,"Expansion, May 24, 2016.
75"OHL reclama 1.240 millones ante la justicia por obras en el exterior," Cinco Dias,January 27, 2015.
76"Copasa acusa por carts a OHL del retraso de la obra del tren del desierto,"El Economista, December 27,2014.
77"Villar Mir, imputado por el hospital de Palma, niega trato de favor a OHL,"El Economista,September 2014.
78"Enfrenta juicios OHL en al menos tres entidades,"La Jornada,May 11,2015.
79 http://www.bloomberg.com/news/articles/2015-07-30/what-scandal-for-ohl-mexico-stock-investors-all-seems-forgotten
20
regarding the investigation into the corruption scandal and the regulatory sanctions imposed on
OHL Mexico, please refer to the below Regulatory section of this report.
Kroll also identified media reports from February 2016 which reported that OHL Director and Villar
Mir's son-in-law, Javier Lopez Madrid ("Lopez Madrid"), was accused of making illegal payments
to the PP. Lopez Madrid denied the charges, and said that "at no point in time" did he ever offer
money to local government officials in exchange for contract procurements.80 According to El
Confidencial, as of March 2016, the National Audience has been investigating 31 contracts
awarded to OHL in relation to "illegal financing of the PP."According to the article, the 31 contracts
were adjudicated by PP officials between 2004 and 2013, and have a total value of EUR 584
million.81 The investigation remains ongoing.82
4.1.3 Adverse Public Records
4.1.3.1 Litigation
Kroll conducted searches of judgment records on file with the Supreme Court, the National
Audiences, the Provincial Audiences, and the Superior Courts of Spain.83 Approximately 1,150
judgment records naming the company were identified.84 A large number of these cases concerned
labor disputes or allegations of breach of contract in which the plaintiff(s) accused OHL or one of
its subsidiaries/joint ventures of failing to abide by contractual terms and deadlines.
Several appeals by OHL against government decisions were found and primarily concerned
disagreements regarding tax calculations.
The following includes a sample of judgment rulings filed in 2016 in which OHL or one of its affiliates
was a defendant in the original dispute:
• No. SAP M 5079/2016, filed in the Provincial Audience of Madrid on April 11,2016.
According to the judgment record, an appeal to a March 6, 2015 court decision was filed
by both plaintiff-appellant, Omega Saimper S.L. ("Omega"), and defendant-appellant, OHL.
The decision shows that Omega initially filed a lawsuit claiming it was owed EUR
100,037.41 by OHL pursuant to a contract for construction work at the Policlinico Hospital
in Madrid. However, while the initial ruling upheld in part Omega's complaint against OHL,
the defendant was only ordered to pay Omega EUR 21,882.42. OHL, in turn, claimed it
only owed Omega EUR 9,751.37.
In April 2016, the court issued a final ruling against the appeal, ruling partially in favor of
OHL, and ordering that the company pay Omega EUR 18,513.68.
• No. STSJ M 3071/2016, filed in the Superior Justice Tribunal of Madrid, Court of Social
Proceedings, on March 21, 2016.
According to the judgment record, this decision was made pursuant to an initial complaint
filed by Messrs. Pelayo and Ruperto against Velasco Grupo Empresarial S.L. ("Velasco")
and UTE Servicios Madrid 4, a joint venture comprised of the Ascan Grupo Empresarial
Sadisa, S.L. ("Ascan") and OHL. Following the initial complaint, in which the plaintiffs
alleged wrongful termination, the court ruled in favor of plaintiffs Pelayo and Ruperto, and
ordered their immediate re-hiring and payment of a bonus. According to the decision,
Velasco was dismissed from the case, but the Ascan-OHL joint venture was ordered to pay
B0"Lopez Madrid niega haber realizado pagos ilegales al PP de Madrid,"El Confidencial, February 26, 2016.
B1"El juez investiga 584 millones en obras de OHL por la financiacion ilegal del PP,"El Confidencial, March 10,2016.
82"Castro prorroga un ano la instruccion del caso Son Espases," Diario de Mallorca Online,June 3,2016.
83 In Spain,court documents are not a matter of public record and privacy regulations protect individuals'judicial records.
This limits Kroll's ability to find information such as an individual or company's criminal record or history, or the current
status of litigation. These databases contain a large,although not exhaustive,amount of judgment rulings.
B6 The majority of the judgments name OHL as a party to litigation,while some only name the company in the text of the
document.
21
EUR 400 to each of the plaintiffs. They filed an appeal, but in March 2016, the court upheld
the lower court's ruling.
• No. STSJ CL 1322/2016, filed in the Superior Justice Tribunal of Valladolid, Contentious-
Administrative Court, on March 18, 2016.
According to the judgment record, this decision was filed pursuant to a complaint brought
by UTE Campus Segovia, a joint venture established by OHL and Volconsa, Construccion
Y Desarrollo de Servicios S.A., against the Administration of the Community of Castilla and
Leon (Fiscal Office). The joint venture filed a contentious administrative suit against the
local government, refuting payment of two service fees allegedly owed by OHL: a EUR
8,965.34 fee and a EUR 314,728.40 fee, issued against the company in relation to a
contract for work performed at the University of Valladolid in Segovia.
In March 2016, the court ruled against the joint venture's appeal, and upheld the decision
of the lower court regarding the above-mentioned payments.
• No. STSJ AND 1507/2016, filed in the Superior Justice Tribunal of Madrid, Court of Social
Proceedings, on March 3,2016.
This decision was filed pursuant to a complaint for wrongful termination filed by an
individual named Mr. Hector against OHL and certain OHL subsidiaries, including Ecolaire
Espana S.A. ("Ecolaire"), Atmos Espanola, S.A. ("Atmos"), and Proyectos and Sistemas,
S.A. ("Proyectos"). According to the court record, Hector was formerly employed by
Proyectos, now known as Atmos, and was terminated in March 2005 for "repeated low
performance." From 2005 to 2010, he was employed at Ecolaire as a Project Director, but
was laid off in September 2013 as a result of a "reduction in the number of projects"
awarded to the company. Hector filed suit against the companies, which the defendants
appealed. In March 2016, the court issued a final ruling in the case, and ordered that
Ecolaire pay unspecified fees and costs to the plaintiff.
• No. STSJ CL 765/2016, filed in the Superior Justice Tribunal of Valladolid, Contentious-
Administrative Court, on March 1, 2016.
This decision finalizes a dispute between an OHL-Construcciones Arranz Acinas S.A.joint
venture and the Administration of the Community of Castilla and Leon (Comission of
Economic-Administrative Claims and Fiscal Council of Castilla and Leon) regarding a EUR
6,276.66 payment allegedly owed by the joint venture for services provided by the local
government. The companies filed a claim against the local government, alleging that the
tax laws used to claim the fee were not applicable in this particular instance. In March 2016,
the court upheld the government's financial claims against the companies.
4.1.3.2 Regulatory Actions and Compliance Databases
Kroll searched databases of sanctions, enforcement proceedings, and press releases of various
regulatory agencies, including the National Securities Market Commission and the Ministry of
Finance and Public Administration. Additionally, Kroll searched databases that compile sanctions
lists / watchlists of companies and individuals involved in improper or illegal business practices,
such as money laundering, terrorism financing, corruption, or fraud.85
Regulatory searches identified various references to allegations of corruption involving OHL's
subsidiary in Mexico, OHL Mexico SAB de CV ("OHL Mexico"). In 2015, the company came under
the scrutiny of the Mexican National Banking Securities Commission ("CNBV") after audio
recordings were uploaded to YouTube which appeared to show that the firm's president, Jose de
Andres de Oteyza ("Oteyza"), sought direct help from the heads of Mexican state companies
Pemex and CFE to win a USD 476 million contract to build a power plant.86
'Kroll's research was conducted using the parent company's name,"Obrascon Huarte Lain."
ee"OHL Mexico on the defensive over audio recordings", BN Americas, November 27,2015
22
Kroll identified a news article which stated the tapes were the latest in a series of leaks from the
alleged telephone conversations between OHL Mexico executives and high ranking government
officials over business deals.87 In the wake of a previous corruption scandal involving the audio
recordings of backroom deals regarding the Viaducto Bicentenario Overpass, OHL Mexico was
notified by the state of Mexico and the Mexican Federal government that all of its contracts would
be audited in 2016.88
An investigation by the Superior Auditing Office and Secretary of Public Service of the State of
Mexico ultimately led to a USD 4.1 million fine from the CNBV over inadequacies in its financial
reporting, though the regulator said there was no evidence of fraud.89 On April 29, 2016, the board
chairman, Oteyza, stepped down from the board.99
4.2 Research in the U.S.
4.2.1 Identification
According to New York Department of State records, OHL Infrastructure Inc. ("OHL Infrastructure")
was incorporated in Delaware on June 21, 2013. OHL Infrastructure operates as a wholly owned
business development firm for OHL Concesiones in the private-public partnership ("P3") market,
according to OHL Concesiones'website.91 According to OHL Concesiones'2015 Annual Report of
significant events and key figures, OHL Infrastructure is headquartered at 555 Theodore Fremd
Avenue, Suite B-201, Rye, New York, 10508.92 According to the 2015 Annual Report of audited
consolidated financial statements, OHL Infrastructure contributed a loss of EUR 2,315,000 to the
profit attributable to its parent OHL Concesiones in 2014 and 2015.93
Florida Department of State records noted that Community Asphalt Corporation ("Community
Asphalt") was incorporated on September 22, 1980. In 2006, Community Asphalt joined the OHL
Group, under its OHL ConstrucciOn division, marking OHL's entry into the United States, according
to the company's website.94 Community Asphalt specializes in general road construction and
transportation infrastructure.95 Its corporate office is located at 9675 NW 117 Avenue, Suite 108,
Miami, Florida 33178.96 Additionally, Community Asphalt operates four plants throughout Florida,
in Miami, West Palm Beach, Vero Beach and Fort Myers.97
Additionally, Kroll identified the following affiliated entities of Community Asphalt: Arellano
Construction, OHL Building and The Tower Group.98 Collectively, the aforementioned companies
operate as OHL USA, a subsidiary of OHL Construcci6n.99
4.2.2 Adverse Public Records
Kroll conducted searches for adverse public records (e.g., civil litigation, criminal records,
judgments, etc.) in the following jurisdictions with which OHL Infrastructure has most recently been
associated:
87 Ibid
88"Update 2—Mexico banking reuglatorfines OHL Mexico$4 Million", Reuters, March 28,2016
Ibid
9°"OHL Meixco board chairman step sdown", Reuters,April 29, 2016
9' http://www.ohlconcesiones.com/en/markets/usa-canada/
92 http://www.ohlconcesiones.com/media/1301936/en_ia_2015_web.pdf
93 http://www.ohlconcesiones.com/media/1298395/en_cuentasanuales_consolidadas_2015_web.pdf
94 http://www.cacorp.net/presentation/about-us/
es http://www.cacorp.net/presentation/about-us/
se http://www.cacorp.net/presentation/community-asphalt-directory/
http://www.cacorp.net/presentation/community-asphalt-directory/
98 http://www.ohlconstruccion.com/en/presentation/subsidiaries/
se http://www.ohlusa.com/en/regions/florida-south-east/
23
• Orange County, California100
• Duval County, Florida101
• Lee County, Florida102
• Miami-Dade County, Florida103
• Palm Beach County, Florida104
• Seminole County, Floridal05
• New York County, New York106
• Travis County, Texas107
• Fairfax County, Virginia108
Kroll identified the following civil cases filed in Orange County, California naming OHL
Infrastructure or any of its affiliates as a party:
• The Amber Group, Inc. v. OHL USA, Inc., No. 30-2015-00798157-CU-BC-CJC in the
Superior Court of Orange County, California, filed on July 13, 2015.
According to the complaint, The Amber Group ("Plaintiff') filed this lawsuit against OHL
USA Inc. ("OHL USA" or "Defendant") for breach of written contract, among other causes
of action. The Plaintiff alleged that OHL USA owed it $217,646.82 in outstanding invoices
for goods sold and delivered to the Defendant's project site located at Lake Machado in
Los Angeles, California. The Plaintiff sought damages in the amount of the aforementioned
outstanding invoices plus interest and legal fees. According to the docket, this case was
dismissed with prejudice on March 21, 20.16.
• OHL v. Bieber, LLC d/b/a Bieber USA and d/b/a/Tradex Group Bieber, LLC, No. 30-2015-
00798157-CU-BC-CJC in the Superior Court of Orange County, California,filed on July 31,
2012.
According to the complaint, OHL ("Plaintiff") filed this lawsuit against Bieber LLC ("Bieber"
or "Defendant") for action on the Plaintiff and Defendant's open book account. Plaintiff
alleged that Bieber was indebted to Plaintiff in the amount of $10,157.41 for goods sold
and delivered. Plaintiff sought damages in the aforementioned amount plus interest and
legal fees.According to the docket, this case was dismissed with prejudice on January 15,
2013.
Kroll identified the following civil cases filed in Miami-Dade County, Florida naming OHL
lnfraestructura or any of its affiliates as a party:
• Murphy Construction Finishers, Inc. v. OHL Building, Travelers Casualty and Surety
Company of America, et al., No. 15-006245-CA-01 in the Circuit Court of Miami-Dade
County, Florida, filed on March 17, 2015.
According to the complaint, Murphy Construction Finishers, Inc. ("Plaintiff')filed this lawsuit
against OHL Building, Travelers Casualty and Surety Company of America, Zurich
American Insurance Company and Liberty Mutual Insurance Company for breach of
contract, unjust enrichment and breach of payment bond in the amount of$13,166,680. In
the Defendants' answer to the complaint, they stated that the Plaintiff performed defective
work causing the Defendants to incur additional costs, and further alleged that the Plaintiff
1°°Superior Court/Recorder of Deeds,Orange County, CA:January 1, 1996—June 10,2016
101 Circuit Court/Recorder of Deeds, Duval County,FL:January 1, 1996—June 10, 2016
102 Circuit and County Court/Recorder of Deeds, Lee County, FL :January 1, 1996—June 10,2016
103 Circuit Court/Recorder of Deeds, Miami-Dade County, FL:January 1, 1996—June 10,2016
104 Circuit Court/Recorder of Deeds, Palm Beach County, FL:January 1, 1996 —June 10,2016
105 Circuit Court/Recorder of Deeds,Seminole County, FL:January 1, 1996—June 10, 2016
'Supreme Court/Recorder of Deeds, New York County, NY:January 1, 1996—June 10,2016
07 Circuit Court/Recorder of Deeds,Travis County,TX:January 1, 1996—June 10,2016
108 District Court/Recorder of Deeds, Fairfax County, VA:January 1, 1996—June 10,2016
24
violated terms of the payment bond. On May 12, 2016, a motion to dismiss the case was
denied. The case remains active.
• OHL-Arellano Construction Company v. Greter Alvarez, No. 15-005594-CA-01 in the
Circuit Court of Miami-Dade County, Florida, filed on March 10, 2015.
According to the complaint, OHL-Arellano Construction Company ("Plaintiff') filed this
lawsuit against Greter Alvarez ("Defendant"), an individual, for breach of promissory notes.
The complaint states that the Plaintiff made loans to the Defendant totalling $20,540, with
the agreement to pay back the loans through deductions of the Defendant's compensation.
On June 11, 2016, an order was entered referring the parties to mediation. This case
remains active.
• Trainor Glass Company v. Fidelity and Deposit Company of Maryland, OHL Building, et
al., No. 13-04979CA11 in the Circuit Court of Miami-Dade County, Florida, filed on July
24, 2014.
According to available court records, Trainor Glass Company ("Plaintiff') filed this contract
indebtedness claim against Fidelity and Deposit Company of Maryland, Zurich American
Insurance Company, Travelers Casualty and Surety Company of America, The Insurance
Company of the State of Pennsylvania, Liberty Mutual Insurance Company, Federal
Insurance Company, Odebrecht Construction, Inc., OHL Building f/k/a The Tower Group,
and Community Asphalt Corp. On October 16, 2014, an order of dismissal for want of
prosecution was entered. No further information is available online.
• Florida Aquastore & Utility Construction, Inc. v. WRS Infrastructure & Environment, OHL
USA, Areas USA FLIP, and Fidelity and Deposit Company of Maryland, No. 14-003863-
CA-01 in the Circuit Court of Miami-Dade County, Florida, filed on February 12, 2014.
According to the complaint, Florida Aquastore & Utility Construction, Inc. ("Plaintiff') filed
this lawsuit against WRS Infrastructure & Environment, OHL USA, Areas USA FLTP, and
Fidelity and Deposit Company of Maryland ("Defendants")for breach of contract, breach of
good faith and fair dealing, and unjust enrichment. According to an Agreed Order for
Substituting Parties entered on July 4, 2014, OHL Building, Inc. was substituted for OHL
USA.According to the docket,on June 3,2016,the Defendants motioned for leave to assert
a counterclaim against the Plaintiff. This case remains active.
• Homestead Paving Company v. KMC Corporation, The Tower Group, Inc. d/b/a Tower OHL
Group, et al., No. 10-055722-CA-01 in the Circuit Court of Miami-Dade County, Florida,
filed on October 18, 2010.
According to the docket, Homestead Paving Company ("Plaintiff")filed this lawsuit against
KMC Corporation, The Tower Group Inc. d/b/a Tower OHL Group, and Travelers Casualty
and Surety Company of America for contract indebtedness. According to a Notice of
Voluntary Dismissal filed by the Plaintiff on June 1, 2012, all claims against The Tower
Group were dismissed with prejudice.
Additionally, Kroll identified 191 civil cases naming Community Asphalt in Miami-Dade County,
Florida; of those, Community Asphalt was named as a defendant in 57. The nature of the cases
naming Community Asphalt as a defendant were predominantly auto negligence and other
negligence (23 cases) and contract indebtedness greater than $15,000 (8 cases). At the client's
request, Kroll can review some or all of these cases.
Kroll identified the following civil cases filed in New York County, New York naming OHL or any of
its affiliates as a party:
• Horn, Mai-Fun v. Waterworks, a Joint Venture of Judlao Enterprises and OHL USA, Inc.,
No. 156653/2015 in the Supreme Court of New York County, New York, filed on July 1,
2015.
25
According to the docket, Mai-Fun Horn ("Plaintiff') filed this civil tort action against
Waterworks, a joint venture between Judlao Enterprises and OHL USA ("Defendants").
According to the complaint, the Plaintiff, a pedestrian, tripped and fell over a pothole
located on the Defendants'job site, causing severe and permanent injuries.A Compliance
Conference was scheduled for June 1, 2016, though the docket shows no indication that
the conference was held. This case remains active.
• Peixoto Fernandes, Jose v. City of New York ,Waterworks, JV, Judlau Contracting, OHL
USA. Inc., No. 160131/2013 in the Supreme Court of New York County, New York, filed on
November 1, 2013.
According to the docket, Jose Peixoto Fernandes ("Plaintiff') filed this civil tort action
against the City of New York, Waterworks, JV, Judlau Contracting, and OHL USA, Inc.
("Defendants"). The Plaintiff, an employee of the Defendants, was performing work at the
Defendants' site located on Columbus Avenue between 60th and 61st Streets in New York,
New York, when he was injured by dangerous, hazardous, defective and/or faulty
equipment. As a result, the Plaintiff was declared permanently lame and disabled. This
case remains active.A status hearing is scheduled for August 18, 2016. •
• Xiang Yang Zhou v. Maria Paloma Munoz Garcia and OHL USA, Inc., No. 150529/2012 in
the Supreme Court of New York County, New York, filed on March 5, 2012.
According to the docket, Xiang Yang Zhou ("Plaintiff") filed this civil tort action for motor
vehicle negligence against Maria Paloma Munoz Garcia ("Garcia") and OHL USA.
According to the complaint, Garcia was operating the motor vehicle owned by OHL USA
with the permission, knowledge, and consent of OHL USA when the vehicle struck the
Plaintiff's vehicle causing the Plaintiff to be injured. The Plaintiff sought damages not
covered by no-fault insurance. According to the docket, this case was dismissed with
prejudice on January 25, 2016.
4.2.2.1 Bankruptcies, Liens & Judgments
Kroll searched for bankruptcies filed by OHL or its affiliates, as well as any tax liens or judgments
filed against them. Kroll identified the following county tax lien naming OHL USA in Orange County,
California:
Debtor: OHL USA INC.
Creditor: Orange County, California
Date: October 13, 2015
Filing Type: County Tax Lien
Filing Location: Orange County Recorder of Deeds
Amount: $29,753
Status: Satisfied
4.2.2.2 Regulatory Actions and Compliance Databases
Kroll found no regulatory sanctions or litigation, including Securities and Exchange Commission
sanctions or litigation, involving OHL or its affiliates.
Searches of compliance databases that list those suspected of organized crime, drug trafficking,
money laundering, terrorist activities or corruption found no mention of OHL or its affiliates.
4.2.2.3 Press Reports and Internet
Kroll's review of press reports and Internet pages, including social media sites,found no derogatory
or controversial references to OHL in the United States.
26
5. COMSA SAU
5.1 Identification
COMSA Corporacion is a Spain-based infrastructure and engineering company. Through several
subsidiaries and affiliates, the company primarily operates in the fields of infrastructure and
engineering, services and technology, and concessions and renewable energy. According to its
website, Comsa is also present in over 20 countries.109 The company's international sales are
valued at USD 633 million, according to the company's 2015 "Annual Summary."110
According to commercial database research, COMSA Corporacion de Infraestructuras, S.L.
("Comsa") is the holding company for the Comsa group of entities. As reported on the company's
website, Comsa dates back to 1891, when Jose Miarnau Navas founded the railway works
company. In its early years, the company primarily focused on "track and station renovation
works."111 In 2009, the company merged with Emte, an indtstrial engineering company owned by
the Sumarroca family. The resulting company, Comsa Emte, was 70 percent controlled by the
Miarnau's, and 30 percent by the Sumarroca family.)2 In December 2015, during the company's
125'h anniversary, Comsa Emte changed its name to Comsa Corporacion.113
Records maintained by the Spanish Central Mercantile Registry include the following corporate
registration details for Comsa:
• Name: COMSA Corporacion de Infraestructuras, S.L.
• Registry: Barcelona
• CIF: B08937724
• Registered Address: / C. Viriato,47, Barcelona, Spain
• Activity: Acquisition and rent of real estate; Acquisition, subscription, and
sale of various kinds of assets.
• Authorized Capital: EUR 25,513,552
• Disbursed Capital: EUR 25,513,552
Records maintained by the Spanish Central Mercantile Registry contain the following details for
Comsa S.A., a subsidiary of the parent company:1t4
• Name: COMSA, S.A.
• Registry: Barcelona
• CIF: A08031098
• Registered Address: C.Viriato, 47, Barcelona, Spain
• Activity: All kinds of public and private cleaning services, specifically, the
collection, transport, treatment, evaluation, and disposal of municipal trash and industrial
waste.
109 http://www.comsa.com/web/comsawp/sobre-comsa-corporacion
10 Comsa Corporacion de Infraestructuras,S.L.2015 Annual Report.
11 http://www.comsa.com/en/web/comsawp/historia
112 http://www.pressreader.com/spain/lavanguardia/20151222/283077003208739
113
http://www.lavanguardia.com/vida/201 51 221/309551 3461 0/catalunyacomsaemtepasaadenominarsecomsacorporacionensul2
5aniversario.
html
114 Central Mercantile Registry records do not provide corporate registration information on an entity named "COMSA
S.A.U."
27
• Authorized Capital: EUR 10,107,077
• Disbursed Capital: EUR 10,107,077
Commercial databases provide the following financial details regarding Comsa's operations (in
thousands of Euros):
2014 2013 2012
Sales 101,102 46,864 53,937
EBITDA 105,268 50,787 56,795
EBIT 74,972 19,116 22,926
5.1.1 Ownership
According to Spanish news sources, following Comsa's merger with Emte, the combined company
was 70 percent controlled by the Miarnau family and 30 percent by the Sumarroca family.15
Commercial databases that compile corporate registration and ownership_information list the
following entities as Comsa shareholders.16 Online public record research suggests these entities
are affiliated to the Miarnau and Sumarroca families. Further research into the below companies
can be conducted at the client's request.
Entity CIF Ownership %
TI 2009 SL B65152167 41%
Sociedad de Inversiones y Participaciones Comsa Emte SL B65101065 30%
Sheratan Management SL ' B62653753 9.66%
SEP Management SL B62653746 9.66%
Deimos Inversion SL • B62650809 9.66%
5.2 Media Profile
Kroll conducted English and Spanish-language media research for news articles, press releases,
and reports involving Comsa and identified over 5,000 media references to the company, primarily
news articles relating to the company's adjudication of contracts in Spain and overseas. Given the
large volume of information pertaining to the company, Kroll's research was narrowed using the
company's name and adverse keywords in both English and Spanish. The following significant
milestones in Comsa's history and recent disputes involving the company were identified:
Comsa Affiliate Granted Railway Operator License
In 2005,the Spanish Ministry of Public Works ("Fomento")granted Comsa Rail Transport, a Comsa
affiliate, the "first private railway operator license." According to El Mundo, Renfe, the Spanish
government railway company, "essentially had a monopoly" over the railway industry in Spain until
the license was granted."'
Jorge Miarnau, President of Comsa, expressed his approval of the decision and thanked the
government for putting its "trust in us."116 Two years later, the company was granted a contract for
the construction of a technical workshop for Renfe's high speed railway in Barcelona, a project
worth EUR 24.3 million.19
"Fraud"Claims Filed Against Government by Comsa and Partners
In May 2010, Comsa and several of the company's business partners, including Isolux Corsan,
Azvi, Sando and the Portuguese bank, Espirito Santo, filed a claim against the Supreme Tribunal
of Spain for EUR 420 million, alleging they were "defrauded" by the government with respect to the
115 http://www.pressreader.com/spain/lavanguardia/20 1 51 222/2 830 7 7 0 0 32087 3 9
16 According to the commercial database provider,this information was provided through an inquiry in January 2015.
I""Comsa sera competidor de Renfe tras ganar la primera licencia de operador privado,"El Mundo,September 28,2005.
18"Comsa sera el primer rival privado de Renfe en mercancias,"Gaveta de los Negocios, September 29, 2005.
119"Comsa se adjudica la construcci6n del taller para trenes de Ave de Renfe en Barcelona por 24,3 millones," Europa
Press,June 7,2007.
28
group's contract for the construction of the AP-41 highway, which runs between Madrid and Toledo.
Ceasa, the concession group with the contract, alleged the current revenue from traffic was "eight
times less than initially expected."120 They claimed that the subsequent construction of highway M-
407 changed the underlying terms of the concession contract, and the decision to not extend
certain sections of the highway would lead to an underutilization of the highway.According to the
article, the four construction groups and the Portuguese bank had invested EUR 400.3 million and
had registered losses of EUR 28.8 million.121
The following year, news sources reported the AP-41 highway was "on the verge of bankruptcy."
According to newspaper ABC, since the highway's inauguration in 2006, it had accumulated losses
totalling EUR 30 million. The concession group claimed they could no longer keep afloat a highway
that failed to meet the minimum financial expectations that served to promote the project.122
Contract Rescission in Chile Leads to Injunction
Kroll identified a February 2013 article published by Business News America, which described a
dispute between Comsa and the Chilean Ministry of Public Works ("MOP").According to the article,
Comsa was awarded a concession contract in January 2009 to build the Ruta G-60, a highway that
connects the Santiago Metropolitan region with the Camino de la Fruta. In early 2013, the MOP
began a reconcession process for the Ruta G-60 as a result of Coma's "complete abandonment of
work"123 on the project, which consisted of improvement works on a 31 km stretch of Ruta G-60.
Commenting on the project delays, a government official from the local municipality of Melipilla
said: "Rumors about the suspension of the project started in 2011, but work was abandoned in April
2012 because the company in charge of the project abandoned the work, claiming that they were
being demanded to do more than was established in the contract they signed with MOP."124
In January 2014, the Chilean MOP won an arbitration case against the concessionaire for Ruta G-
60, after the latter abandoned construction of the highway. The decision allowed the Ministry to re-
concession the highway project.125 The Chilean government alleged a "serious breach of contract"
against Comsa, citing the company's failure to abide by the terms of the contract.126
Comsa Shareholders Accused-in Corruption Scandal
Kroll identified various news sources published in 2014 regarding allegations of corruption involving
members of the Sumarroca family. For instance, in July 2014, Jordi Sumarroca Claverol ("Jordi")
was accused by a judge in Spain of "criminal activity against the Public Administration" of the
Torredembarra Municipality. As reported by El Pais, the Superior Court of Catalunya was
investigating whether Teyco, a construction company of which Jordi was managing director, was
linked to entities affiliated to the municipal mayor, Daniel Masague. In an August 2014 article
regarding the government investigation, El Confidencial reported that the Sumarroca family holds
a"good deal of its fortune outside of Comsa-Emte, of which they only own 30 percent. One of these
outside companies is the construction firm Teyco."127 The El Pais article indicated that numerous
government officials were also arrested as part of the same investigation, over allegations that
included breaches of fiduciary duty, embezzlement, money laundering, falsifying documents, and
having links to criminal organizations.128
120"Comsa Emte y sus socios reclaman 420 millones al Gobierno por la autopista de Toledo," La Vanguardia, May 25,
2010.
121 Ibid.
'22"La autopista de peaje MadridToledo, al borde de la quiebra,"ABC, May 14,2011.
123'MOP to reconcession G60 after complete work abandonment,"Business News Americas, February 15, 2013.
124 Ibid.
125"Ministerio chileno rescindira dos contratos viales," Business News Americas,January 23, 2014.
126"Chile se queda dos autopistas de Comsa tras su quiebra en el pais," Cinco Dias, February 25, 2014.
127"La burguesia catalana de los negocios teme un septiembre negro a causa del caso Pujol," El Confidencial,August 7,
2014.
128"El'caso Torredembarra'salpica al constructor Jordi Sumarroca,"El Pais,July 5, 2014.
29
•
A few months later, Caries Sumarroca Claverol ("Caries"), Jordi's son, was accused along with
several other executives by a National Audience judge of collaborating in the "questionable"
business deals of Jordi Pujol Ferrusola, son of Jordi Pujol, who served for six terms as leader of
Catalunya. In early 2014, Jordi Pujol admitted that his family had maintained secret foreign bank
accounts, saying: "We never found the right moment to declare it."129 The scandal involved
allegations against many of his family members over tax fraud and money laundering.130 As a result
of the Pujol investigation, Caries was accused by the Public Prosecutor Anticorruption Office of
"money laundering, crimes against the Fiscal Administrative Office, and falsifying commercial
documents"131 in an attempt to gain government contracts.
in November 2014, Caries denied having any involvement in the allegations that implicated him in
the adjudication of municipal contracts through Jordi Pujol's son, Jordi Pujol Ferrusola. Both Caries
and his father, Jordi, denied having ever paid commissions to the son of the'former President of
Catalunya in exchange for public works contracts.132
The following year, Comsa reported that the Miarnau family would henceforth hold all executive
positions at the company in order to"simplify its corporate structure."133 According to news sources,
Caries would step down from his role as Vice President but the families would maintain their
respective shares in the company: 70 percent for the Miarnau family and 30 percent for the
Sumarroca family. The company assured the press that the management change was not a result
of the Sumarroca's implication in the Pujol case.134
In July 2015, three members of the Sumarroca family — former Teyco Managing Director Jordi
Sumarroca, his uncle Joaquim, and his cousin Sussana —were detained by the Civil Guard; Daniel
Masague ("Masague"), former mayor of Torredembarra, was also arrested.135 As reported by El
Pais, collectively, the three members of the Sumarroca family allegedly paid EUR 1.43 million to
Masague in illegal commission payments for contracts. Following the arrest, the Public
Prosecutor's Anticorruption Office said would begin an investigation into whether the entities
controlled by the Sumorroca's were being used to funnel illicit payments to government officials.136
Kroll's research indicates the investigation into the above claims remains ongoing.
Comsa Accused of Undue Inflt.ience With Government Agency
Kroll identified a news article published in March 2015 regarding Comsa's alleged "attempts to -
influence CatSalut officials." According to the article, Comsa, Teyco — another Sumarroca-
controlled entity—and Bbats, an architecture firm,were accused by a judge in the Superior Tribunal
of Catalunya of attempting to influence officials at CatSalut, a government health organization.The
correspondence between Teyco and Bbats, according to the article, indicates that "Teyco seeks
support within the Municipality management so it can be awarded more contracts in South
America."137
Other Incidents/Disputes
Kroll's research returned thousands of articles naming the company. Kroll identified some articles
published in 2006 relating to delays in construction projects involving Comsa.138 Other articles
729 http://www.economist.com/news/europe/21613309-jordi-pujols-confession-undermines-catalans-hopes-
independence-scandal-catalonia
130 Ibid.
131"Sumarroca se mantiene al frente de sus empresas pese a la imputacibn por el'caso Pujol',"Economia Digital,October
23, 2014.
132"Sumarroca niega que Pujol Ferrusola le consiguiera contratos con la Generalitat," Economia Digital, November 12,
2014.
133"Caries Sumarroca sale de la vicepresidencia de Comsa Emte,"Expansion,January 18, 2015.
734 Ibid.
135"Los Sumarroca,una familia unida a los Pujol en los negocios y en la politica,"Agencia EFE,July 23,2015.
138"Los Sumarroca usaron 7 sociedades para pagar 1,43 millones a Masague," El Pais,July 23, 2015.
137"El juez afea a Comsa,Teyco y Bbats su intento de"influir sobre funcionarios," Expansion, March 12,2015.
138"La empresa del museo de Arqueologia insiste en que no es responsable del retraso de las obras,"El Correo,April 12,
2006.
30
published in 2012 reported on the company's plans to lay off almost 300 employees "due to the
strong decline of orders,"139 as well as 132 temporary workers.10 The following year, Comsa
dismissed another 141 employees.141 The company attributed the layoffs to a "notable decrease"
in projects within the construction industry of Spain.142
Kroll also identified various news articles pertaining to the company's operations in Eastern Europe
and South America. For instance, in August 2013, La Gaceta reported that Comsa held various
contracts in both Peru and Lithuania, which totaled approximately EUR 136 million. In Lithuania,
Comsa was awarded a contract to modernize 43km of the Marijampole-Sestokai railway line for
EUR 85 million, while in Peru the company was hired to update the water pipes in Sicuani, Cuzco,
and in the district of Comas, Lima for EUR 51 million.143 By mid-2014, Comsa's international
operations reportedly comprised approximately 47 percent of its business.144
Another article from September 2013 reported on a series of divestitures initiated by the company
in response to its "heavy debt." According to newspaper Expansion, in August 2013 Comsa
refinanced a debt of EUR 900 million, and promised to divest approximately EUR 300 million in
assets.145
5.3 Adverse Public Records
5.3.1 Litigation
Kroll conducted searches of judgment records on.file with the Supreme Court, the National
Audiences, the Provincial Audiences, and the Superior Courts of Spain.746 Approximately 730
judgment records naming the company were 'identified. 147 A large number of these cases
concerned labor disputes or allegations of breach of contract in which the plaintiff(s) accused
Comsa or one of its subsidiaries/joint ventures of failing to abide by contractual terms and
deadlines.
Several appeals by Comsa against government decisions were found and primarily concerned
disputes of tax calculations.
The following includes a sample of judgment rulings filed in 2016 in which Comsa or one of its
affiliates was a defendant-in the original dispute:
• No. STSJ GAL 3203/2016, filed in the Superior Justice Tribunal of Coruna, Court of Social
Proceedings,on April 28, 2016.
I.
This court decision was filed in response to a lawsuit initiated by Masa Galicia S.A. ("Masa
Galicia") against the National Institute of Social Security, General Treasury of Social
Security, Comsa, Joama S.L.,Admon Concursal Joama S.L., and an individual named Mr.
Nazario.According to the available court record, Nazario was formerly employed at Masa
Galicia, where he suffered a "serious" accident in February 2010. Following an inspection
and analysis of the incident, Masa Galicia, Comsa and a Joama affiliate were found
responsible. Comsa and the two other defendants appealed the decision, which was
overturned and dismissed.
19"Comsa Emte to launch downsizing plan for 298 employees,"Expansion,June 29,2012.
14p"Comsa preve rescindir 132 contratos temporales vinculados a obras que acaban este ano yen 2013,"Europa Press,
July 9, 2012.
141"Comsa prepara un nuevo ERE para despedir a 141 personas,"El Pais, March 19,2013.
142 Ibid.
143"El negocio exterior salva a las constructoras espanolas,"La Gaceta,August 20,2013.
144"Las dificultades de Ilevar la obra mes alit de los Pirineos,"Expansion, May 13,2014.
145"Vientos de cambio en Iberia FCC y Comsa Emte desinvierten FCC y Comsa Emte," Expansion,September 27, 2013.
1a6 In Spain,court documents are not a matter of public record and privacy regulations protect individuals'judicial records.
This limits Kroll's ability to find information such as an individual or company's criminal record or history, or the current
status of litigation.These databases contain a large,although not exhaustive,amount of judgment rulings.
147 The majority of records named the company as a party to litigation,while some records named the company in the text
of a document.
31
The court record indicates the employer was ordered to pay certain fees in damages to the
plaintiff, which Masa Galicia appealed, and won. Following this decision, Nazario filed an
appeal, which the court ruled against in April 2016.
• No. ATS 3365/2016,filed in the Supreme Tribunal of Madrid, Court of Social Proceedings, on
April 5, 2016.
This court decision was filed in response to a lawsuit brought by an individual named Mr.
Melchor against the National Institute of Social Security, General Treasury of Social
Security, Construcciones Auid S.L. and Comsa. According to the available document, the
lawsuit was filed pursuant to the plaintiff's claims of"permanent disability."The record does
not specify the exact claims brought against the defendants.
• No. STSJ CAT 2408/2016, filed in the Superior Justice Tribunal, Court of Social Proceedings,
on March 14, 2016.
This decision was filed pursuant to a lawsuit initiated by an individual named Mr. Alfredo
against the national Institute of Social Security, Raima 2005 BCN S.L. ("Raima"), Servicios
Industriales Y Obras Diaz Manrique S.L ("Servicios Industriales"), Social Security General
Treasury, and Edificios Tercat UTE, a joint venture established by Ferrovial Agroman S.A.
and Comsa. According to the court document, the lawsuit was filed pursuant to a work
accident involving Alfredo in November 2011.The joint venture's involvement in the lawsuit
appears to be in relation to a contract for work performed at the site of the accident. The
court ruled that Raima and the joint venture were to be held responsible for "lack of safety
measures" in the workplace, and were ordered to pay reparations to Alfredo. Raima
appealed the decision, which was overturned in March 2016.
• No. STSJ MU 497/2016,filed in the Superior Justice Tribunal of Murcia,Social Court,on March
2, 2016.
This decision was filed in response to a lawsuit initiated by 12 employees of Terra
Plicaciones de Pintura y Senalizacibn Vial S.L. ("Terra"), a road signalling company, against
their employer and several other contractor companies, including Comsa, for EUR
143,871.52 in salaries owed.According to the decision, Terra appealed the court's ruling,
which stated that the company was required to pay the plaintiffs' salaries and other fees in
amounts ranging from approximately EUR 4,500 to EUR 18,000 per individual. Comsa and
other co-defendants were dismissed from the case.
In March 2016, the court ruled in favor of the lower court's decision, and ordered the
workers' employer;Terra, to pay an additional 10 percent to each plaintiff.
• No. STSJ M 3034/2016, filed in the Superior Justice Tribunal of Madrid, Social Court, on
February 29, 2016.
This decision was filed in response to a lawsuit brought by three former Comsa employees
against the company and several other contractor companies for which the plaintiffs were
employed as temporary workers/subcontractors. As stated in the judgment record, the
three plaintiffs were terminated from their employment in February 2014, pursuant to the
"end of the maintenance contract"for which the workers had been hired. The court ruled in
favor of the plaintiffs, and ordered Comsa to immediately re-hire all three individuals under
the same employment contract conditions. Comsa was also ordered to pay each plaintiff a
fee for damages, ranging between approximately EUR 2,700 and EUR 5,300. Comsa
appealed the decision, which was granted by the court in February 2016.
5.3.2 Regulatory Actions and Compliance Databases
Kroll searched databases of sanctions, enforcement proceedings, and press releases of various
regulatory agencies, including the National Securities Market Commission and the Ministry of
Finance and Public Administration. Additionally, Kroll searched databases that compile sanctions
32
lists / watchlists of companies and individuals involved in improper or illegal business practices,
such as money laundering, terrorism financing, corruption, or fraud. No such records naming
Comsa were identified; however, Kroll identified references to a contractual dispute involving
Comsa and the Ministry of Finance and Public Administration.According to the available judgment
record, the dispute centered around the adjudication of a public works contract.
33
•
6. CAF USA
6.1 Research in Spain
6.1.1 Identification
Construcciones y Auxiliar de Ferrocarriles S.A. is a company that manufactures railway vehicles
and equipment.The company is based in Beasain, Guiptzcoa,which is part of the Basque Country.
In addition to the company's headquarters in Beasain,which is also home to CF's main production
plant, the company has established production facilities in France, Mexico,•Brazil and the U.S.148
The CAF group of entities includes dozens of companies which, according to CAF's 2015 Annual
Report, operate within the following sectors: Industrial, Technology, Services, and Construction.149
The company offers "comprehensive global rail solutions"which, in addition to the supply of trains,
include concessions for viability studies, civil work, electrification, signaling, maintenance, and
system operation.150 According to a shareholder and investor presentation published in March
2016, the company operates in over 40 countries and across five continents.151 The company's
revenue is listed as EUR 1.3 billion, EBITDA/Margin as EUR 166 million/12.9 percent, and its
international revenue as 80 percent of overall revenue.152 Some of the company's most significant
contracts in 2015 included:
• 75 coaches for Caledonian (Serco) —EUR 200 million
• 20 metro trains for Medellin —EUR 90 million
• 8 high speed trains for Oslo — EUR 120 million
• ERTMS signaling for ADIF — EUR 12o million
• Trams for Luxembourg, St. Etienne and Utrecht — EUR 180 million
Records maintained by Spain's National Securities Market Commission ("CNMV") contain the
following details regarding,CAF:
• Name: Construcciones y Auxiliar de Ferrocarriles, S.A.
• CIF: A20001020
• Registe5ed Address: Jose Miguel Iturrioz 26, 20200, Beasain (Guipuzcoa)
• Activities: Design, construction, maintenance and administration of
industrial railway material
• Admitted Capital: EUR 10,318,505.75
The following financial information for the company was reported in its 2015 shareholder and
investor presentation (in millions of Euros):153
P&L/Balance Sheet 2014 2015
Revenue 1,447 1,284
%growth 11.3%
EBITDA 146 166
% margin 10.1% 12.9%
149 http://www.cafusa.com/en/compania/instalaciones.php
149 A complete list of CAF subsidiaries can be provided at the client's request.
150 http://www.caf.net/en/compania/index.php
15i http://www.caf.net/upload/accionista/CAF%20investor%20presentation.pdf
'52 Ibid.
'53 Ibid.
34
P&L/ Balance Sheet 2014 2015
EBIT 115 127
% margin 7.9% 9.9%
Net Income 62 43
% margin 4.3% 3.3%
Total Assets 2,963 2,874
Liabilities&Equity
Total Equity 749 715
Non Current Liabilities 984 962
Current Liabilities 1,230 1,197
Total Equity& Liabilities 2,963 2,874
The company's website reports CAF's stock market listing as follows:
2014 2013 2012 2011 2010
Stock market capitalization
Figures as of December 31 1,036.478.476 1.317.409,223 1.196,398.175 1,319.808.875 t.336,949.250
Per-share data
Net earnings per share 17.41 26.31 29.01 42.64 37.81
Dividend per share 5.25 10.50 10.50 10.50 10.50
Per-share net book value 214.76 209.77 204.75 193.82 164.41
Stock market ratios
PER 18.53 12.53 13.08 9.02 10.07
Average pncefEB1TDA(') 7.55 5.07 7.15 5.76 6.46
MV/BV(average price/book value) 1.50 1.57 1.85 1,98 2.32
Dividend yield 1.63% 3.18% 2.77% 2.73% 2.76%
Pay-out 30.16% 39.91% 36.19% 24.62% 27.77%
4'I The figures for 2010 v.ere adapted to adequately reflect the operations ctass:tied as dEsconti:nued 1n 2011.
6.1.1.1 Ownership and Corporate Structure
As of June 2016, the company's Board of Directors included the following individuals, according to
CAF's website:154
• Andres Arizkorreta Garcia-CEO
• Marta Baztarrica Lizarbe - Executive Secretary
• Juan Jose Arrieta Sudupe-Coordinating Director/Independent Director
• Javier Martinez Ojinaga -Independent Director
• Xabier Garaialde Maiztegui - Independent Director
• Carmen Allo Perez- Independent Director
• Jose Antoni Mutiloa - Majority Shareholder
• Alejandro Legarda Zaragueta -Officer/Other
• Luis Miguel Arkonada Echarri -Officer/Other
As of December 31, 2015, the company's primary shareholders include:155
Shareholder Direct voting Indirect voting % of
rights rights voting
rights
Templeton Investment Counsel, LLC 0 103,888 3.03%
Cartera Social S.A. 892,780 0 26.04% _
Invesco Limited 0 35,007 1.02%
Kutxabank, S.A. 653,256 0 19.06%
Bestinver Gestion S.A., S.G.I.I.C. 0 105,759 3.09%
154 http://www.caf.net/en/accionistas-inversores/gobierno-corporativo/consejo-administracion.php
155 Construcciones y Auxiliar de Ferrocarriles,S.A.2015 Annual Report filed with the CNMV.
35
Indirect Shareholder Through: Direct Number of
Shareholder voting,rights
Templeton Investment Counsel, Sociedades del Grupo 103,888
LLC _
Invesco Limited Sociedades del Grupo 35,007
Bestinver Gestion S.A., S.G.I.I.C. Bestinver Pensiones EGPF, S.A. 105,759
6.1.2 Media Profile
Kroll conducted Spanish-language media research for news articles, press releases and reports
involving Comsa and identified thousands of media references to the company, primarily news
articles relating to the company's adjudication of contracts in Spain and overseas as well as certain
legal disputes. Given the large volume of information pertaining to the company, Kroll's research
was narrowed using the company's name and adverse keywords in both English and Spanish. The
following significant milestones in CAF's history and recent disputes involving the company were
identified:
Environmental Hazard in Beasain Factory
After charging CAF's Beasain, Spain factory with violating environmental regulations, an
investigation found that the company took over a decade to install a smoke filtration system at the
factory, which was finally installed in 2000. Metered readings in year since the filtration system's
installation exceeded legal limits.156 According to news sources, the investigation began in 1999,
after then-Mayor of the neighboring municipality of Ordizia, Juan Vicente Erauskin, filed a
complaint against the company for the possible emission of hazardous smoke.157
Kroll identified a news article from January 2002 reporting that the prosecutor of Guipuzcoa, Spain
sought to file charges against Andres Arizcorreta, Director of CAF — Beasain; Jon Jauregi, Mayor
of Guipuzcoa; and, Thomas Epalza, Director of Environmental Quality of the Basque Country in
regard to environmental misconduct at the CAF factory 158 The three allegedly violated
environmental laws in the handling and/emission of pollutants from the rail company's Beasain
factory.159
Former Employees Die from Asbestos-related Illnesses
Several news articles reported upon the deaths of CAF's Spanish employees, many who died from
complications resulting from asbestos exposure. In July 2010, various news sources reported on
the 29th asbestos-related death of a former CAF employee.160 Kroll identified more than one report
of CAF paying compensation and damages to former employees poisoned in their tenure at the
factory—for instance, in February 2014, a San Sebastian judge ordered that CAF pay the widow
and children of/a worker EUR 410,000 in compensation and damages.161162
Romanian Bribery Allegations
After Metrorex, owner of the Bucharest Metro system, awarded a bid to CAF to replace the cars,
the Anti-Corruption Office of Romania investigated three executives of Metrorex who were
suspected of accepting bribes from CAF. The prosecutor's office released a statement stating they
suspected some members of the evaluation committee accepted offers from the company that
156 "CAF tardo mas de diez anos en instalar un sistema de depuracion de humos en su aceria", El Pais-Bilbao,June 9,2001
157"La Fiscalia solicita el archivo de la causa abierta contra la empresa CAF por delito ecologico," El Pais, January 28,
2002.
158"La Fiscalia solicita el archive de la causa abierta contra la empresa CAF por delito ecologico", El Pais-Bilbao,January 28,2002
159'bid
159"CCOO denuncia una nueva muerte por amianto", El Periodico, July 27,2010
161"CAF indemnizara con 72.00 euros a los families de una victima del amianto", El Diario Vasco Online,April 22 2016
162"CAF debera abonar 410.00 euros por una muerte por amianto", El Pais,February 26 2014.
36
resulted in CAF's winning the bid.163 When the train cars arrived,they were too wide for the system
and the platforms had to be widened.164
CAF Ordered to Pay Fesur EUR 10.6 million for Production Delay
In June 2016, the Spanish Supreme Court ordered CAF to pay EUR 10.6 million to Ferrocarriles
del Suroeste("Fesur"),a private Spanish rail company which had contracted CAF for the production
of railcars.765 Citing CAF's 10-month delay on the EUR 30.5 million project, Fesur terminated the
contract and sued for damages in 2010. The 2016 settlement was a result of this suit.166
Other Incidents/Disputes
A news article from April 2010 reported upon a strike at CAF's factory in Beasain, Spain. The
workers struck against the decision to not renew contracts for 40 to 60 workers.167168 Shortly
thereafter, in November 2010, CAF was accused of subcontracting projects traditionally managed
by company employees, while terminating contracts of temporary workers.169
In September 2010, news sources reported that a group of former Venezuelan government officials
"denounced the corruption in the Spanish concession project awarded by President Hugo Chavez,
valued at USD 1.863 million,for the rehabilitation of the Caracas Subway."170 The concession group
included CAF, Dimetronic, Cobra, and Servicios Internacionales y Constructora Hispanica. 171
According to one article, the project had still- not begun, but was already "on the verge of
collapse."172 The group stated they would demand that the Venezuelan and Spanish governments
investigate the matter, particularly, the lack of due diligence in the adjudication process, since
Chavez reportedly"directly approved" the contract with the concession group.173
6.1.3 Adverse Public Records
i
6.1.3.1 Litigation
Kroll conducted searches of judgment records on file with the Supreme Court, the National
Audiences, the Provincial Audiences, and the Superior Courts of Spain.174 Over 220 judgment
records naming the company were identified.175 A large number of these cases concerned labor
disputes and workers'compensation claims, as well as breach of contract claims.
The following includes a sample of judgment rulings filed within the last year in which CAF was a
defendant in the original dispute:
•
'63"CAF muestra su Fortaleza en la cartera de pedidos"El Economista,March 8,2015.
1B0"Union leader:New Metro trains are too wide for the Bucharest system,platforms need some carving", Romania Insider,
May 1,2014.
165 CAF condenada a pagar a Fesur 10 millones por demora en plazos", El Economista,June 1 2016.
166 Ibid
167"Trabajadores de CAF Beasain realizaran paros desde el manes contra los despidos de eventuales", Europa Press,
April 25, 2010
166"CCOO denuncia tres nuevas muertes por el amianto en la explantilla de CAF", Europa Press,April 29,2008
169"El Comite de la planta de CAF critica que la empresa subcontrate trabajos y rescinda eventuales," Europa Press,
November 25, 2010.
170"La corrupciOn pone al borde del colapso al metro de Caracas,"ABC,September 4, 2010.
171"Denuncian "irregularidades" en la atribucibn de las obras del Metro de Caracas a un consorcio espanol," Europa
Press,September 4,2010.
172"La corrupciOn pone al borde del colapso al metro de Caracas,"ABC,September 4, 2010.
173 Ibid.
174 In Spain,court documents are not a matter of public record and privacy regulations protect individuals'judicial records.
This limits Kroll's ability to find information such as an individual or company's criminal record or history, or the current
status of litigation.These databases contain a large,although not exhaustive,amount of judgment rulings.
175 The majority of records named the company as a party to litigation,while some records named the company in the text
of the document.
37
• No. STS 2292/2016, filed in the Supreme Tribunal of Madrid, Court of Social Proceedings, on
May 25, 2016.
As described in the Media Profile section of this report, this court decision was filed in
response to a lawsuit initiated by Ferrocarriles del Suroeste S.A. ("FESUR") against CAF
for a"serious breach of contract."According to the available court record, FESUR and CAF
signed a contract for the supply of railway cars. OAF allegedly failed to provide the cars
within the time limits described in the contract; as a result, FESUR sued CAF claiming
damages worth several million Euros.
In an answer to the complaint, CAF alleged that FESUR, too, had failed to comply with
certain contractual obligations, such as the "approval of the fire hazard and security study."
In November 2012, the court ruled that CAF had "gravely and persistently"failed to comply
by the terms of the contract with FESUR. Following several answers and appeals, in May
2016,the court issued a final ruling in the case, ordering CAF to repay FESUR for damages
in excess of EUR 10 million. At the time, various Spanish news sources reported on the
ruling.176177
O
• No. ATS 9299/2015, filed in the Supreme Tribunal of Madrid, Court of Social Proceedings, on
November 10, 2015.
According to the available judgment record, three individuals —Messrs. Doroteo, Modesta,
and Antonia — filed a lawsuit against CAF disputing the amount of a payment allegedly
owed to the plaintiffs by the company. The decision indicates that CAF was ordered to pay
the plaintiffs EUR 339,777.41 plus interest in response to their claims, which were not
specified in the available judgment record. However, the document seems to indicate that
the complaint was filed pursuant to the death of a CAF employee as a result of asbestos
exposure; the employee was likely a family member of the three plaintiffs, according to
available information.
• No. STSJ PV 4062/2015, filed in the Superior Justice Tribunal of Bilbao, Court of Social
Proceedings, on November 10,2015.
This judgment record was filed as part of a lawsuit initiated by an individual named Andrea
against CAF, the National Institute of Social Security, General Treasury of Social Security,
Mutualia-Mutua de Accidentes de Trabajo, and the Social Security Office for Workplace
Injuries.According to the available document,Andrea, a CAF employee, was injured while
cleaning a CAF facility. The workplace insurance company, Mutualia, was ordered to pay
Andrea a monthly base salary,while all other co-defendants were dismissed. Mutualia and
CAF both filed an appeal; as such, it remains unclear based on available information
whether CAF was also accused of any wrongdoing and ordered to pay for damages. In
November 2015, the court ruled against CAF and Mutualia's appeal, and each was
additionally ordered to pay EUR 600 in costs and fees.
• No. ATS 9872/2015, filed in the Supreme Tribunal of Madrid, Court of Social Proceedings, on
November 2, 2015.
According to the judgment record, in March 2013, the Confederacion Sindical Ela and
approximately 30 employees of One Servicios Industriales, S.L. ("One") filed a civil suit
against CAF, One, and several other entities, claiming that their"right to demonstrate was
compromised"at CAF facilities, and demanded from the defendants payment for damages.
A judgment was issued against the defendants, the terms of which were not specified in
the available court record. In response, CAF, One, and one other co-defendant, GMSM
Medio Ambiente S.A., filed an appeal, which was both denied and approved in part by the
court. Details regarding the claims brought by the plaintiffs were not disclosed.
16 http://www.europapress.es/economia/noticia-caf-debe-pagar-106-millones-firma-ferroviaria-privada-retrasos-entregar-
locomotoras-20160531132620.html
http://www.noticiasdegipuzkoa.com/2016/06/01/economia/el-supremo-condena-a-caf-a-pagar-a-fesur-10-millones-
por-retrasos-en-pedidos
38
• No. STSJ PV 2221/2015, filed in the Superior Justice Tribunal of Bilbao, Court of Social
Proceedings, on June 16, 2015.
Available records indicate this judgment was filed pursuant to a civil suit brought by an
individual named Leovigildo against CAF, the National Institute of Social Security, the
General Treasury of Social Security, and Mutua de Accidentes de Trabajo ("Mutualia").
Leovigildo, a CAF employee, suffered a head injury in July 2012 while working at a CAF
facility. The workplace insurance company, Mutualia, was ordered to pay the plaintiff
monthly payments as damages for his injury. According to the judgment record, all other
co-defendants were dismissed. Mutualia appealed the decision, which was overturned by
the court in July 2015.
6.1.3.2 Regulatory Actions and Compliance Databases
Kroll searched databases of sanctions, enforcement proceedings, and press releases of various
regulatory agencies, including the National Securities Market Commission and the Ministry of
Finance and Public Administration. Additionally, Kroll searched databases that compile sanctions
lists / watchlists of companies and individuals involved in improper or illegal business practices,
such as money laundering, terrorism financing, corruption, or fraud. No such records naming CAF
were identified.18
6.2 Research in the U.S.
6.2.1 Identification
CAF USA, Inc. is the American subsidiary of Construcciones y Auxiliar de Ferrocarriles S.A. The
firm's corporate headquarters are located in Washington D.C. and the firm has a factory in Elmira,
New York. According to the firm's website, CAF USA was incorporated in 1998 in Delaware to
establish CAF's North American operations on a permanent basis.19
The company's site explains that CAF USA began manufacturing carshells at the facility in Elmira,
New York as a strategic decision to increase domestic manufacturing, create additional United•
States jobs, and consolidate its presence in the US rail market.180 The site states the firm has
contracts with Amtrak along with the cities of Houston, Cincinnati, and Kansas City, including
others.181
6.2.2 Adverse Public-Records
6.2.2.1 Litigation
Kroll conducted searches for adverse public records (e.g. civil litigation, criminal records, tax liens
and lawsuit judgments) in national and state databases along with targeted online and onsite
research in relevant jurisdictions. Kroll's research included searches of federal and state cases,
uniform commercial code filings, federal agency decisions, Department of Labor decisions, SEC
filings, Department of Labor and OSHA violations, a review of federal contracts, grants, awards,
and other variations of federal spending.
Kroll identified the following civil cases naming CAF USA as a party:
• Brookville Equipment Corp.. Plaintiff-Appellant, and the Cincinnati Enquirer, Intervenor-
Appellee, and CAF USA, Inc., Intervenor, vs. City of Cincinnati, Defendant,Appeal No. C-
120434, filed in the Court of Appeals of Ohio, First Appellate District, Hamilton County,
judgment entry on appeal entered on August 15, 2012.
18 Kroll's research was conducted using the parent company's name,"Construcciones y Auxiliar de Ferrocarriles."
179 http://www.cafusa.com/en/compania/historia.php
1BD Ibid
181 Ibid
39
This case occurred as a result of the Cincinnati Enquirer's attempt to review proposals
received by the City of Cincinnati ("the City") for a streetcar system. In response to the
Cincinnati Enquirer's request, the City gave Brookville Equipment Corp., a streetcar
manufacturer, the opportunity to remove trade-secret information from their proposals.
Following the Cincinnati Enquirer's receipt of the redacted proposals, the newspaper
requested "unredacted versions of the bid records." After the city informed Brookville
Equipment Corp. of the City's intention to release the unredacted proposals, Brookville filed
a verified complaint in the Hamilton County Court of Common Pleas requesting a
declaratory judgment that its unredacted proposals contained trade-secret information and
that the City could not disclose this trade-secret information. Another streetcar proposer,
United Streetcar, LLC, also filed suit against the City to purportedly protect its trade secrets,
which was later consolidated with Brookville's action.
CAF USA, the subject of this investigation, and another firm which had answered the City's
request for proposal, filed a motion to intervene and also requested injunction relief
prohibiting disclosure of its trade secrets until the City awarded a final contract. United
Streetcar LLC, and CAF USA reached agreements with the Enquirer regarding their
proposals and were dropped from the litigation.
• Equity Residential Management, LLC v. CAF USA, No. 2011-LTB-000762, filed in the
District of Columbia Superior Court on January 13, 2011.
This case is currently closed and has a disposition date of February 7, 2011. Official court
records categorize the case type as "Landlord & Tenant Branch." Based upon available
records, it appears that CAF USA was one of multiple tenants being sued for non-payment
of rent. According to a docket entry dated February 7, 2011, the case was "dismissed by
Plaintiff pursuant to bulk filing of fax or printed email?" The docket indicates this case was
related to another case, No. 2011 LTB 759, which was between Equity Residential
Management, LLC, Plaintiff, and Kemet and Associates, LLC. Defendant.
• Equity Residential Management, LLC v. CAF USA, No. 2011-LTB-022563, filed in the
District of Columbia Superior Court on August 18, 2011.
This case is currently closed and has a disposition date of September 12, 2011. Official
court records categorize the case type as "Landlord & Tenant Branch." Based upon
available records, it appears that CAF USA was one of multiple tenants being sued for non-
payment of rent. The docket indicates the case was dismissed on September 12, 2011,
and states "Dismissed by plaintiff pursuant to bulk filing of fax or printed email." The online
docket does not provide other information about the nature of proceedings of the case.
• Tower Building LLC v. CAF USA, Inc. No. 2002-LTB-004956, filed in the District of
Columbia Superior Court on February 6, 2002.
This case is currently closed.The case docket lists a disposition date of February 28, 2005.
According to the online docket, the case type is listed as "Landlord &Tenant Branch." The
online docket does not provide additional information about the case. This case has been
purged, and no documentation is available onsite or online.
• Yu, Li Juan v. Wash Metro Area Transit Auth, et al(incl. CAF USA). No. 2003 CA 003353
B, filed in the District of Columbia Superior Court on April 25, 2003
Documents for this case are currently in storage and can be retrieved at client request.
Retrieval from storage takes approximately 2-3 weeks. The docket indicates that
stipulations of dismissals were filed on June 29, 2005 by all parties. The case was
dismissed with prejudice on June 29, 2005. Further information requires case retrieval.
40
•
• Transit Care Inc. v. CAF USA Inc. No 2:03-cv-06260-PA-AJW, filed in the Central District
of California (Western Division — Los Angeles) on September 2, 2003.
According to the complaint, filed on September 2, 2003, Transit Care Inc. is the owner of
US Patent No. 5,242,207, entitled "Window Protector," issued on September 7, 1993. The
complaint states that Defendant CAF USA has been and "still is infringing the '207 Patent'
by making, using, selling, offering for sale, or importing into the United States window
protection products within the scope of the claims of the '207 Patent."On October 23,2003,
CAF USA filed an Answer to Complaint and Counterclaim; on November 17, 2003, Transit
Care filed a Reply to Counterclaim, and after settlement discussions, both parties agreed
to dismiss, without prejudice, their respective claims and counterclaims. The case was
dismissed without prejudice on May 12, 2004.
• Penssack Co. Inc. vs. CAF USA, Inc. No CC00009813/EL, filed in the Elmira City Court
on January 18, 2013.
According to a document sent from the Elmira City Court to CAF USA, Penssack Co. Inc.
("Penssack") asked judgment in the court against CAF USA for$2,673.3 for "Monies Due."
The letter notes that it was in regard to "16 pcs of PN E322723001 REVA and 8 pcs of PN
E32272101, mailed to the Elmira Heights Addresses." The letter indicates Penssack had
requested payment for 16 months without success. A notice of settlement was filed on
February 13, 2013 and the case was withdrawn. Onsite research was performed in the
Elmira City Court and no docket or other information is available.
6.2.2.2 Bankruptcies, Liens & Judgments
Kroll searched for bankruptcies filed by CAF USA and searched for any tax liens or lawsuit
judgments against the company. Kroll identified three state tax liens in the state of New York which
named CAF USA as a debtor.
Debtor: CAF USA INC.
Creditor: NYS Tax Commission
Date: July 2, 2004
Filing Type: State Tax Lien'
Filing Location: New York
Amount: $7,454
Status: Released on June 23, 2005
Debtor: CAF USA
Debtor 2: JW of New York Inc.
Creditor: NYS Tax Commission
Date: August 12, 1992
Filing Type: State Tax Lien
Filing Location: New York
Amount: $9,742
Status: Released on August 28, 2003
Debtor: CAF USA
Debtor 2: JW of New York Inc.
Creditor: NYS Tax Commission
Date: June 18, 1992
Filing Type: State Tax Lien
Filing Location: New York
Amount: $44,717
Status: Released on August 28, 2003
41
•
6.2.2.3 Regulatory Actions and Compliance Databases
Kroll searched regulatory and compliance databases for any enforcement actions or violations
involving CAF USA. Searches included research of terrorist "watch" lists to which Kroll has access,
financial regulatory agencies, and other compliance sources (include other searches
here). Database research used to obtain this information included a search of international and
national organizations, including but not limited to, Financial Conduct Authority, OFAC, Interpol, as
well as national and international media sources.
Kroll identified 6 OSHA inspections of CAF USA's location in Elmira, New York resulting in a total
of 18 violations.They are summarized in the table below and arranged descending by date. Several
violations had more than one instance. Citation details are provided as they appear in the citation
and the violation type and penalty are included.
Violation Citation Violation Initial Penalty (Penalty after
Date Type Informal Settlement, if available)
02/18/2014 Guarding floor and wall openings and Serious $3,000
holes ($1,950 on 03/05/2014)
02/18/2014 General requirements Serious $5,000
($3,250,on 03/05/2014)
02/18/2014 Selection and use of work practices Serious $7,000
($4,550 on 03/05/2014)
02/18/2014 The control of hazardous energy Other Not Listed
•
(lockout/tagout)
11/23/2012 Guarding floor and wall openings and Serious $2,700
holes ($2,700 on 12/14/2012)
11/23/2012 The control of hazardous energy Serious $3,600
(lockout/tagout) ($3,600 on 12/14/2012)
11/23/2012 Woodworking machinery requirements Other $3,600
(Not Listed)
11/23/2012 Abrasive wheel machinery Serious $2,700
($2,700 on 12/14/2012)
11/23/2012 Abrasive wheel machinery Serious Not Listed
11/23/2012 Portable fire extinguishers Serious $2,700
($2,700 on 12/14/2012)
11/23/2012 Bloodborne pathogens Other $2,700
(Not Listed)
06/20/2007 Flammable and/combustible liquids Serious $1,125
($731.25 on 06/25/2007)
06/20/2007 Spray finishing using flammable and Serious $1,125
combustible materials ($731.25 on 07/16/2007)
06/20/2007 Spray finishing using flammable and Serious Not Listed
combustible materials
06/20/2007 ,Respiratory Protection Serious $1,125
($731.25 on 07/23/2007)
06/20/2007 Respiratory Protection Serious Not Listed _ _
06/20/2007 The control of hazardous energy Serious $1,125
(lockout/tagout) ($731.25 on 08/23/2007)
06/20/2007 Powered industrial trucks Serious $1,125
($731.25 on 07/23/2007)
06/20/2007 Powered industrial trucks Serious Not listed
06/20/2007 General requirements for all machines Serious $900
($585.00 on 07/23/2007)
06/25/2007 Wiring methods, components, and Serious $1,125
equipment for general use ($731.25 on 06/25/2007)
06/20/2007 Powered industrial trucks Other Not Listed
02/07/2007 Occupation noise exposure Serious $1,925
02/07/2007 Occupation noise exposure Serious Not listed
42
Kroll also identified a violation of the Federal Transit Administration's ("FTA") "Buy America" rules
which occurred when the Houston Metro and CAF entered a contract regarding Light Rail Vehicles
for the city's Metro system. On April 23, 2010, the Federal Transit Administration initiated an
investigation to determine whether Houston Metro complied with the FTA Buy America and
procurement rules when it entered into contracts with CAF to purchase Light Rail Vehicles for
several federally-funded projects. 182 After a four-month investigation, the FTA found "three
substantial violations of FTA's Buy America and procurement rules."183 CAF was specifically found
at fault when "CAF signed submitted a Certificate of Compliance to Houston METRO despite its
stated intention and plan to produce two LRVs in Spain."184 Houston Metro, too, failed to properly
evaluate the proposers' ability to buy America, but the FTA report determined "OAF and METRO
together developed and executed a means for circumventing the Buy America requirements by
entering into a separate, locally funded, sole-source contract for two LRVs after FTA denied a
request for a public interest waiver for the same."185 The entire contract was cancelled and had to
be renegotiated to conform to the existing rules.
Then, in 2013,the Houston Metro and CAF engaged in a dispute over timely delivery of the 39 light
rail cars included in the contract.188 In 2015, Metro CEO alleged breach of contract when it became
clear that Metro's lifts, which raise the trains for mechanical work, are unable to raise GAF's
trains.187 Kroll also identified an article from December 2015 reporting on a wheel problem which
affected 14 of the city's newest railcars, all produced by CAF USA.188 The article cites that "other
CAF contracts in the U.S. have also experienced problems, famously the company's agreement
with the Washington Metropolitan Area Transit Authority:"789
6.2.2.4 Press Reports and Internet
Kroll identified a robust media history for CAF USA. The firm has been the subject of many media
articles,the majority of which report upon their manufacture of railcars and the creation of contracts
with various American municipalities. Kroll did, however, identify several media articles reporting
upon a derailment involving one of CAF USA's cars in Washington D.C., in which the company was
not evaluated as at fault, and numerous articles reporting upon delays of their streetcar delivery,
most recently to the city of Cincihnati. Kroll also identified articles reporting upon the Washington
D.C. Metro's purchase of 192 vehicles and the major subsequent problems the city had with the
cars and maintenance. /
Washington D.C. Metro Problems with CAF USA Railcars
Transit officials in the nation's capital reported numerous problems with the 192 railcars they
purchased from CAF between 2001 and 2004 for USD 343 million."190 Kroll's research into the
Washington Metro's purchase of cars in the early 2000s from CAF identified a history of major
problems with the railcars. A spokeswoman for Local 689 of the Amalgamated Transit Union,
Metro's largest employee union, representing 8,000 employees, was quoted as saying: "Those
cars have been a headache from Day One," in an article in the Washington Post.191 The
Washington Post report states that "The new CAF cars suffer major mechanical problems almost
as often as Metro's oldest rail cars, which were built in the 1970s. In fact, they travelled an average
of only 319 miles farther—or 7 percent — before needing major repairs, an analysis of 12 months
of Metro statistics shows."192
182 https://www.transit.dot.gov/regulations-and-guidance/buy-america/caf-houston-metro-october-01-2010
183 Ibid
'84 Ibid
185 Ibid
186"Metro hassles with rail-car builder continue", The Houston Chronicle,August 18,2015
187 Ibid
188"Wheel problem prompts Metro to park 14 railcars", Houston Chronicle, December 17, 2015
189 Ibid
190 Ibid
191"Efforts to Repair Aging System Compound Metro's Problems", The Washington Post,June 5,2005
192 Ibid
43
The same article also reports that four CAF trains derailed in less than 18 months.193 The article,
which serves as an exposé, also notes that CAF neglected to provide the Metro with technical
documentation proving parts were installed properly and some records were provided only in
Spanish.194 The article notes that the railcars had faulty software, some wouldn't accelerate, others
had faulty air conditioning, and some had doors which would not properly close.195 In January 2002,
a 58-year old woman got her arm caught in a door and was dragged along a platform because of
a faulty door circuit in a CAF car; the investigation found that the circuit was poorly soldered at the
factory.196
Other issues included a fire erupting in a car in March 2002, and once identified, the problem was
found on 33 other CAF cars, despite prior inspections.197 The article highlights numerous other
problems with CAF USA, including repeated issues with cars that resulted from poor inspection
and oversight.
CAF Wins Pittsburgh Contract, Issues with Washington D.C. Cars Continue
Kroll identified an article from May 2006 published in the Pittsburgh Post-Gazette reporting upon
the Pittsburgh Port Authority's plan to spend USD 46 million with CAF USA to rebuild some of its
vintage light rail cars.198
Kroll also identified an article from January 2007, published by the Associated Press which reported
that a Metro subway car that derailed near downtown Washington D.C.were manufactured by CAF
USA.199 The article reported that the type of car in the derailment was "the same type involved in
four previous Metro derailments since 2003."200 Virginia Verdeja, Vice President of sales for CAF
USA at the time, stated in regard to the.derailments that "those were investigated and the cars
were fine. There's nothing wrong with the cars."201 With the exception of the primary derailment
which was the subject of the article in which 20 people were injured, all other derailments occurred
as trains were heading into rail yards or on their way to begin service.
Kroll also identified a media article from March 2009 which reported upon the Washington D.C.
Metro's contract for 29 cars from CAF USA included in a USD 632 million contract.202 Another
article from July 2010 reported upon CAF USA's award of a contract from Amtrak to build 130 rail
cars over five years for USD 298 million.203
CAF enters contracts with Boston, Kansas City, and Cincinnati; Cincinnati Project Experiences
Major Delays
Kroll identified media articles from 2014 and 2015 regarding street and railcar projects in Boston,
and Kansas City.204205 However, and more recently, most media has focused on CAF USA's role in
the construction and delivery of the carriages for the city of Cincinnati's Streetcar system,
scheduled to launch in September 2016.206207 Despite a delay in the cars' delivery, the system is
193 Ibid
194 Ibid
196 Ibid
796 Ibid
197 Ibid
196 15 More Light-Rail Cars to Get Overhaul", Pittsburgh Post-Gazette, May 30,2006
199"Subway cars under scrutiny after Metro derailment", The Associated Press Tate 8,Local Wire,January 9,2007
zoo Ibid
201 Ibid
202"Metro approves Historic Contract to Build More Light Rail/Construction", US State News, March 21, 2009
203"CAF USA Wins Big Amtrak Contract", Tenderslnfo,July 26, 2010
zoo"CAF USA gets$118 million contract for Boston railcars", Tendersinfo,June 13,2014
205"KC Officials visit streetcar manufacturer in New York", Kansas City Business Journal,August 24,2015
206"Cincinnati Streetcar construction nears completion as delivery dates are set", Cincinnati Business Courier,September
15,2015
207"Street car delay may mean'big trouble'", The Cincinnati Enquirer,August 5,2015
44
still scheduled to launch on time. However, due to the delay, the company was issued a daily fine
of USD 1,000 for missing the original delivery deadline.208209
Kroll identified a media article reporting that the city of Cincinnati was collecting damages from
CAF USA, and as of February 2016, the amount withheld was USD 300,000, but the total increased
each day.210 Project executive John Deatrick was quoted as saying: "We actually haven't paid CAF
since February."211 An article from May 19, 2016 noted that the City was withholding USD 500,000
from CAF USA due to late delivery.212
i
/
ir
208"Fines start this week for streetcar builder", The Cincinnati Enquirer,September 16,2015
209"City raises concern over delayed streetcar deliveries", Cincinnati Business Courier, February 17, 2016
210"Delivery of last streetcar delayed", Cincinnati Business Courier,April 12,2016
211!bid
212"Cincinnati withholding$500K from CAF USA", Star-Gazette, May 19,2016
45
•
GREATER MIAMI TRAMLINK PARTNERS
Alstom Transport SA
• Numerous bribery allegations and investigations by various foreign regulatory authorities
o Dec. 22, 2014, pleaded guilty to 2-count criminal information charging violations of the Foreign
Corrupt Practices Act (FCPA) for falsifying books/records & failing to maintain internal controls;
Alstom paid a criminal penalty of$772 million; Swiss subsidiary also pleaded guilty to violating the
anti-bribery provisions of FCPA
o Implicated in a 2014 corruption investigation of Brazilian stated owned oil company, which resulted
in a Brazilian court ordering the freezing of Alstom assets. Alleged that Alstom & G.E. paid bribes
to secure contracts. Alstom responded to the article that it was no longer in the energy business, and
did not admit or deny the payment of bribes
o Jan. 2015, 2 of Alstom's U.K. executives were charged by the U.K. Serious Fraud Office (SFO) for
using corrupt payments to secure contracts in India, Poland, & Tunisia. Trial began in May 2016
o March 2016, reported that Alstom's U.K. & Ireland director was found guilty of corruption linked to
the Budapest metro construction project
o June 2016, SFO charged 3 high level Alstom executives with corruption from 2000 to 2008 in
connection to the Budapest Metro, 1 of which denies all charges
• More than 295 lawsuits found in a national index of select civil judgments & proceedings in France
(comprehensive litigation searches are not available in France)
o A few matters highlighted by Kroll:
• 2012, French metropolitan authority sued for damages after defects were discovered in tramway
system
• 2012, administrative court ordered the Bordeaux Metropolitan Authority to pay Alstom for
services performed re: tramway system
• 2006, Marseille Transport Authority sued for damages re: metro system; case decided in
Alstom's favor
Alstom Transportation, Inc.
• Since 1990, 19 civil lawsuits naming Alstom Transportation
o SEC action alleging Alstom intentionally underbid railcar contracts and hid millions of dollars of
costs incurred; court approved settlement in favor of the plaintiffs
o Breach of contract lawsuit filed by Alfredo J. Balsera, d/b/a Balsera Communications, for unpaid
fees; case was dismissed pursuant to a joint stipulation by the parties on Nov. 19, 2015
• Sanctions placed on Alstom SA by various authorities based on its role in a global price-rigging cartel;
Alstom listed as a "scrutinized company" by California Department of Insurance and Iowa Board of
Regents
• Multiple labor issues
o French Labor Court found Alstom guilty of discriminating against unionized employees by offering
them less favorable raises
o French court sentenced plant manager to prison because an employee died in a work related accident
o 2015, 100s of employees conducted strikes at 6 French plants demanding raises that were offered to
management
• Alstom & its subsidiaries have operated several jurisdictions & with international governments
sanctioned by the U.S. Dept. of the Treasury's Office of Foreign Assets Control (OFAC), although no
evidence Alstom violated any sanctions. Examples:
o 2003, contracted with the Sudanese government to build hydroelectric station
o 2013, provides electricity to multiple Middle Eastern countries, including OFAC-sanction Iraq,
Yemen, Syria, & Lebanon
o 2013, delivered a turnkey electric power station to OFAC-sanctioned Myanmar
o 2014, by acquiring Alstom's energy companies, GE exposed itself to risks created with the known
operations in OFAC- sanction Cuba
o 2014, operations in Ukraine has been subject to partial sanctions related to the Russian annexation of
Crimea
o 2016, signed agreements with Iranian government for the construction of multiple tramway & metro
projects
• Proposal submission disclosures
o Greater Miami Tramlink Partners disclosed 1 Alstom Transport SA case from a Paris tribunal
o Greater Miami Tramlink Partners disclosed 2 civil cases for Alstom Transportation, Inc.
Archer Western Contractors LLC (AW)
• Since 1990, Kroll identified 99 cases naming AW
o Personal injury lawsuit alleging AW fraudulently misrepresented soil sample results prior to the
construction of retaining walls. Case is pending arbitration
• Walsh Group (parent co.) — 2 cases of racial discrimination in hiring practices; one case dismissed &
second case settled
• Over 200 state level lawsuits nationwide
o Kroll listed 44 from the last 3 years that are currently open
• 400 UCC filings naming Archer Western as a debtor, 2 in the last 5 years
• AW /affiliates/joint ventures were the subject of 26 OSHA inspections with violations
o June 14, 2007, crew was pouring concrete for the construction of the north bridge over the Bay of
Saint Louis when the bridge collapsed. 9 employees fell into the bay, 7 were hospitalized for cuts &
1 died of asphyxiation due to drowning
o March 20, 2007, employee was returning on boat to a bridge under construction when the boat
collided with the bow of a barge. One employee died from chest injuries, 2 other employees were
injured
• Proposal Submission Disclosures
o Greater Miami Tramlink Partners disclosed 12 cases for Archer Western
InfraRed Capital Partners Limited
• Greater Miami Tramlink Partners did not disclose any litigation matters for InfraRed (Kroll reported no
discrepancies, although cases in the UK are generally not available online)
2
•
June 22, 2016
Greater Miami Tramlink Partners
Prepared for: Miami Beach — Office of the City Attorney
MI KroII .
Private & Confidential
RESTRICTED USE WARNING
This report was prepared by Kroll at the request of the client to whom it is furnished. The client agrees that
reports and information received from Kroll, including this report, are intended solely for the private and
exclusive use of the client only in connection with a business, investment or other commercial purpose. Any
other use(including for employment purposes,credit evaluation or insurance underwriting purposes)is strictly
forbidden. Any communication, publication, disclosure, dissemination or reproduction of this report or any
portion of its contents shall be subject to prior notice thereof to Kroll. Kroll assumes no direct, indirect or
consequential liability to any third party or any other person who is not the intended addressee of this report
for the information contained herein, its interpretation or applications, or for omissions,or for reliance by any
such third party or other person thereon.To the extent information provided in this report is based on a review
of publicly-available records, such information, as presented, relies upon the accuracy and completeness of
•
those records,which have not been corroborated by Kroll.Statements herein concerning financial, regulatory
or legal matters should be understood to be general observations based solely on Kroll's experience as risk
consultants and may not be relied upon as financial, regulatory or legal advice,which Kroll is not authorized
to provide. All such matters should be reviewed with appropriately qualified advisors in these areas. THIS
REPORT DOES NOT CONSTITUTE A RECOMMENDATION, ENDORSEMENT, OPINION OR APPROVAL
OF ANY KIND WITH RESPECT TO ANY TRANSACTION,DECISION OR EVALUATION,AND SHOULD NOT
BE RELIED UPON AS SUCH UNDER ANY CIRCUMSTANCES.
2
CONTENTS
1. INTRODUCTION AND METHODOLOGY 4
2. EXECUTIVE SUMMARY 6
2.1.1 Archer Western Contractors LLC(U.S.) 6
2.1.2 InfraRed Capital Partners Limited(U.K./U.S.) 6
2.1.3 Alstom Transport SA/Alstom Transportation Inc. (U.S./France) 7
3. ARCHER WESTERN CONTRACTORS LLC 9
3.1 Identification 9
3.1.1 Federal 9
3.1.2 State 12
3.1.3 Bankruptcy 16
3.2 Judgments, Liens and UCC Filings 17
3.3 Patents and Trademarks 18
3.4 Regulatory Registrations and Actions 18
3.4.1 Occupational Health and Safety Administration 18
3.4.2 Securities Industry Regulatory Actions 20
3.4.3 Office of Foreign Assets Control and Watch Lists 20
3.4.4 United States Tax Court 20
4. INFRARED CAPITAL PARTNERS LIMITED 21
4.1 Research in the U.K. 21
4.1.1 Identification 21
4.1.2 Recent Newsworthy Developments 22
4.1.3 Directors 24
4.1.4 Profiles of key executives 24
4.1.5 Financing Agreements in the U.K 33
4.1.6 Adverse Public Records 34
4.1.7 U.K. Civil and Criminal Litigation 34
4.2 Research in the U.S. 35
4.2.1 Adverse Public Records 35
5. ALSTOM TRANSPORT SA/ALSTOM TRANSPORTATION INC. 36
5.1 Research in France 36
5.1.1 Identification 36
5.1.2 Affiliated Entities 37
5.1.3 Adverse Public Records 38
5.2 Research in the U.S. 41
5.2.1 Identification 41
5.2.2 Corruption and Bribery Allegations and Convictions 41
5.2.3 Criminal Records and Litigation 43
5.2.4 Judgments, Liens and UCC Filings 46
5.2.5 Patents and Trademarks 47
5.2.6 Regulatory Registrations and Actions 47
APPENDIX ONE— INFRARED CAPITAL PARTNERS LIMITED 48
5.1 Werner von Guionneau 48
5.2 Chris Gill 49
5.3 Bryn Jones 50
5.4 Christopher Huxtable 50
5.5 James Hall-Smith 51
5.6 Tony Roper 53
3
1. INTRODUCTION AND METHODOLOGY
The City of Miami Beach — Office of City Attorney ("the client") has retained Kroll to conduct due
diligence inquiries of the following entities:
• Archer Western Contractors LLC ("AWC")—full scope in the U.S.
• InfraRed Capital Partners Limited ("InfraRed") —full scope in U.K. and limited screening
inquiries in the U.S.
• Alstom Transport SA/Alstom Transportation Inc. ("Alstom")—full scope in France and
the U.S.
In the U.S., the objective of the investigation was to identify material legal proceedings, significant
business or personal controversies, corporate governance issues, undisclosed business interests
or any other issues that might reflect on the subjects' reputation, character or credibility. The
investigation included research and analysis of public record sources, including: civil, criminal and
bankruptcy filings in federal and state court jurisdictions, as well as selected local jurisdictions
where research indicated that the subjects have lived and/or worked; lien, judgment and UCC
indices; regulatory filings; business registrations; U.S. Tax Court filings; local, national and trade
media sources; and the Internet. Kroll's investigation included online database research in
available jurisdictions, as well as targeted onsite field research in jurisdictions known to be affiliated
with the subjects.
In U.K., Kroll's research was aimed at identifying adverse findings in materials available in the
public domain, including media archives and online press databases; corporate filings available in
Companies House; litigation and judgements; bankruptcy and insolvency records; and regulatory
filings, including Disqualified Directorship searches, government and financial watch lists,and FCA
disciplinary history (where applicable).
In France,the objective of the investigation was to verify the status, business activities /operations,
significant litigation, corporate governance issues, undisclosed business interests, exposure to
regulatory or other tissues that might reflect on the subjects' reputation or credibility. The
investigation included research and analysis of public record sources, including: civil, criminal and
bankruptcy filings; regulatory filings; corporate records and business registrations; local, national
and industry media sources; and the Internet. Kroll's investigation included online (available)
database research in jurisdictions known to be affiliated with the subjects.
Kroll's online searches cover jurisdictions that make their information available to third parties.
Certain jurisdictions do not provide their information in this way. Information and periods covered
in criminal searches varies from county-to-county and state-to-state. With respect to criminal
records, some jurisdictions only provide information on felonies whereas many jurisdictions report
convictions only.
Kroll notes that these subject companies are significantly large in size and public profile, many with
global operations and multiple subsidiaries. As a result and due to the narrow budget/scope
restrictions for this first phase of the investigation, Kroll's searches were conducted on the main
bidding entity with additional checks to identify issues with (but not necessarily full summaries of)
the parent companies or sibling subsidiaries. While general international media searches were
conducted, more focused public records searches were only conducted in the jurisdictions noted
above. Further,this first phase relied heavily on readily available media profiles and did not include
the retrieval or review of all available primary source materials.Additional research in subsequent
phases and as requested by the client can be conducted into any concerns included in this report.
4
The information contained in this report is based upon a review of publicly-available records. As
such, the information presented relies upon the accuracy of those records, which has not been
corroborated by Kroll.
5
2. EXECUTIVE SUMMARY
2.1.1 Archer Western Contractors LLC (U.S.)
Archer Western LLC ("Archer Western") is a general contracting, construction management and
design-build firm headquartered in Atlanta, Georgia.They are a subsidiary of The Walsh Group, an
Illinois based general construction company.
Kroll identified 99 federal lawsuits naming Archer Western as a party, of which Kroll reviewed the
eight ongoing cases naming Archer Western as a defendant. All of the cases reviewed were filed
in the normal course of business.
Kroll identified over 200 state level lawsuits filed against Archer Western, 44 of which were filed
within the last three years and are currently open. Kroll reviewed the most recent four lawsuits, all
of which were filed in the normal course of business.
Kroll identified over 80 judgments and liens naming Archer Western, 14 of which were filed within
the last five years and named the company as a debtor. Kroll identified over 400 UCC filings naming
Archer Western as a debtor, two of which were filed within the last 5 years.
Archer Western or its affiliates and joint ventures were the subject of 26 OSHA inspections which
contained violations. Two of these inspections included accident reports detailing on the job
fatalities and injuries.
Kroll identified no bankruptcy filings naming Archer Western as a debtor. Kroll identified no
securities industry regulatory actions, sanctions watch lists or U.S.Tax Court filings naming Archer
Western.
2.1.2 InfraRed Capital Partners Limited (U.K. /U.S.)
Research in the U.K. indicates that InfraRed Capital Partners ("InfraRed") began in 1990 as
Charterhouse Bank. It initially invested in real estate, expanding into infrastructure in 1997. HSBC
acquired the business in 2000.When long-term bank financing began to dry up in the U.K., the firm
branched out abroad, into mainland Europe,Australasia and North America. In 2007,the real estate
investment business was expanded to Asia. Following a management buyout of 80.1 per cent of
the business from HSBC in 2011, the business was rebranded InfraRed Capital Partners. The
InfraRed group describes itself as "a leading global investment manager focused on infrastructure
and real estate."
In February 2016, various media sources in the U.K. reported on rumors that a dispute had erupted
between InfraRed and Global Spectrum Pico, its venue operation partner for Sports Hub Pte Ltd
("Sports Hub") in Singapore. InfraRed and Global Spectrum Pico issued a joint statement denying
that termination of the contract had ever been discussed.
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for InfraRed Capital Partners or the members of the executive team researched for this
report. Nor are the subjects mentioned in searchable online litigation databases. There are,
however, certain limitations in U.K. litigation records, as noted in the report.
None of InfraRed's executives are included in the Individual Insolvency Register for England and
Wales or mentioned in the historical archive of the London Gazette, which publishes bankruptcy
notices. Searches of the FCA register show no record of enforcement action against the company
or the executives.
6
Kroll searched for adverse public records, litigation, criminal records, bankruptcy filings,judgments,
liens, Uniform Commercial Code filings, media and regulatory actions naming InfraRed Capital
Partners Ltd in the United States. Kroll.also performed searches of compliance databases that list
those suspected of organized crime, drug trafficking, money laundering, terrorist activities or
corruption. Kroll identified no adverse records naming InfraRed Capital Partners Ltd in the United
States.
2.1.3 Alstom Transport SA/Alstom Transportation Inc. (U.S. /France)
Based is Saint-Ouen, France, Alstom Transport SA is a rail freight manufacturing subsidiary of
French publicly listed transport conglomerate Alstom SA.Alstom Transport SA is one of the world's
largest rail freight manufacturers and rail infrastructure service providers. Alstom Transportation
Inc. ("Alstom Transportation") is a New York-based subsidiary of Alstom SA, and operates
throughout the U.S.
On December 22, 2014, Alstom SA pleaded guilty to foreign bribery charges under the Foreign
Corrupt Practices Act and agreed to pay a criminal penalty of$772 million, described by the U.S.
Department of Justice as the largest-ever foreign bribery resolution.Alstom SA, various U.S. and
foreign based subsidiaries and executive level employees of these entities paid bribes totalling
approximately $75 million to government officials in Indonesia, Saudi Arabia, Egypt, Taiwan and
the Bahamas in exchange for approximately $4 billion in projects. In 2015, Alstom recorded
approximately$808.73 million in net losses primarily due to this fine and asset impairments related
to its operations in Russia.
In January 2015,Alstom Network U.K. and two of its executives were charged by the U.K. Serious
Fraud Office ("SFO") of using corrupt payments to secure contracts in India, Poland and Tunisia.
In June 2016, the SFO charged three additional Alstom executives with corruption in connection
with the supply of trains to the Budapest Metro.
Alstom SA was implicated in the highly publicized corruption investigation, known as Lavo Jato, of
Brazilian state owned oil company Petrobras, which commenced on March 17, 2014. In January
2015,Alstom Network U.K. and two of its executives, Robert John Hallett and Graham Denis Hill,
were charged by the U.K. Serious Fraud Office ("SFO") of using corrupt payments to secure
contracts in India, Poland and Tunisia after a six-year bribery investigation. In June 2016, the SFO
charged three additional high level Alstom executives with corruption in connection with the supply
of trains to the Budapest Metro.
French online records listed numerous lawsuits involving Alstom SA, at least 30 of which directly
involved Alstom Transport SA. These cases primarily related to labor and contract issues
surrounding the company's routine transport industry activities. Between 2006 and 2012, the
metropolitan authorities of Rouen Normandie, Bordeaux, and Marseille sued Alstom Transport SA
for damages relating to defects in their respective tramway and metro systems. In all three
instances, a French court of appeals did not find the company guilty of any negligence and ruled
in its favour.
Alstom Transportation was named as a defendant in a 2008 securities lawsuit filed in the U.S. by
investors in Alstom SA American Depository Receipts, who alleged that that they were defrauded
by Alstom SA,Alstom Transportation and other subsidiaries. The plaintiffs accused Alstom SA and
its subsidiaries of hiding millions of dollars of costs incurred in connection with railcar contracts
performed and alleged that these accounting improprieties resulted in an overstatement of income
of€167 million in Alstom's 2003 financial statements. This case was settled in October 2011 for
$6.95 million.
Including the aforementioned securities lawsuit, Kroll identified 19 civil lawsuits filed in U.S.federal
courts which name Alstom Transportation as a party, of which four name the company as a
defendant and were filed within the last five years.All four of these lawsuits were filed in the normal
course of business. Kroll's searches of U.S. federal and state courts identified no criminal
proceedings naming Alstom Transportation as a defendant.
7
Onsite research in New York County, New York identified one $340 judgement naming Alstom
Transportation as a debtor filed in 2010, which has been satisfied.A commercial database search
identified two state tax liens filed California in 2015 and two civil judgments filed in 2005 and 2007
naming Alstom Transportation as a debtor. One of these state tax liens has been satisfied. The
status of the other tax lien and two civil judgments is unknown.
In the past 20 years, French media reported on multiple labor issues at Alstom SA and Alstom
Transport SA plants across France, including employee strikes and a work accident that killed one
employee. In 2003, a French Labor Court found Alstom Transport SA guilty of salary discrimination
against its unionized workers.
Following General Electric's November 2015 acquisition of Alstom SA's power and transmission
businesses, both companies have been involved in arbitration and/or legal disputes at the
International Chamber of Commerce and in US courts surrounding the final sale value of General
Electric's railway signalling businesses to Alstom SA. This matter is ongoing.
French news media and internet sources indicated that Alstom SA and its subsidiaries have
operated in several jurisdictions sanctioned by the US Department of the Treasury's Office of
Foreign Assets Control (OFAC), including Iran, Sudan, Cuba, Ukraine, Syria, Yemen, Iraq,
Lebanon, and Myanmar. No references indicating that the company has violated any sanctions by
operating in these jurisdictions were found.
Kroll identified no bankruptcy filings naming Alstom Transportation as a debtor in the U.S. Kroll's
research in the U.S. identified no securities industry regulatory actions, sanctions watch lists or
U.S. Tax Court filings naming Alstom Transportation.
8
3 .
3. ARCHER WESTERN CONTRACTORS LLC
3.1 Identification
According to the company's website, Archer Western LLC ("Archer Western") is a general
contracting, construction management and design-build firm headquartered in Atlanta, Georgia.'
The website also reports that Archer Western is a subsidiary of The Walsh Group,2 an Illinois based
general construction company ranked 13th on Engineering News-Record's 2015 list of top 400
contractors.3 The website describes Archer Western as "an expert in various building, civil and
transportation sectors"and claims that"in all of its years of construction operations,Archer Western
has never failed to complete a contract."4
The "Walsh History" section of The Walsh Group website reported that Walsh Construction was
originally started in 1898 by Matthew Myles Walsh in his garage and currently operates as a family
held business in its fourth generation of leadership.5 The website reported that Walsh Construction
established its first headquarters at the intersection of Archer and Western in 1955 and that The
Walsh Group and its subsidiary Archer Western were formed in 1983 to facilitate expansion.6
Kroll identified an active corporate registration belonging to Archer Western with the Georgia
Secretary of State stating that Archer Western was incorporated as a foreign limited liability
company("LLC") on June 12, 1988 with its jurisdiction in Delaware. Kroll identified a domestic LLC
registration for Archer Western filed with the Delaware Secretary of State on December 12, 2011,
which is currently active and in good standing. A related entity, Archer Western Contractors Ltd,
was previously registered with the Delaware Secretary of State on October 19, 1995 and withdrawn
in 2011. Online searches of records maintained by the Delaware Secretary of State and phone
inquiries with a clerk in the records office identified no registration records for Archer Western prior
to 1995.
Kroll identified an active corporate registration for The Walsh Group Ltd in Delaware and in Illinois,
where its headquarters is located.
3.1.1 Federal
Kroll searched U.S. Federal Court indices nationwide back to approximately 1990, depending on
the jurisdiction, for civil litigation and criminal proceedings naming Archer Western as a party. Kroll
identified 99 cases naming Archer Western as a party. Within these records, Kroll reviewed the
eight ongoing cases naming Archer Western as a defendant.These eight cases are detailed below:
• Service Steel Warehouse Co., L.P. v. McDonnel Group, LLC and Archer Western
Contractors, LLC et al, No. 2:14-cv-01416-EEF-MBN, filed in the U.S. District Court for
the Eastern District of Louisiana, on June 18, 2014.
This is a contract enforcement case filed by Service Steel Warehouse Company L.P. ("the
Plaintiff') against The McDonnel Group LLC, Archer Western, Travelers Casualty, Surety
1 https://www.walshgroup.com/about/firm-profile.html
2 Kroll restricted research of The Walsh Group and its other affiliated entities to red flags identified in the course of
Kroll's research on Archer Western and federal litigation naming The Walsh Group.
3 http://www.enr.com/Top_Lists/Top_Contractorsl
° https://www.walshgroup.com/about/firm-profile.html
5 https://www.walshgroup.com/videos/walsh-history.html
6 https://www.walshgroup.com/videos/walsh-history.html
9
Company of America and Liberty Mutual Insurance Company (collectively "the
Defendants").
The complaint stated that on July 28, 2011, The McDonnel Group and Archer Western
entered into a joint venture for the construction of the Intake Processing Center /
Templeman III & IV Replacement for the Law Enforcement District of the Parish of Orleans,
State of Louisiana, which was financed by a joint Labor and Material Payment Bond from
co-defendants Travelers Casualty and Liberty Mutual Insurance Company. The plaintiff
alleged that as of June 6, 2014, Service Steel Warehouse had not been paid $798,250.68,
for steel materials delivered in August 2013. In addition to this amount, the plaintiff sought
to recover $79,825 against Travelers and Archer Western for attorney's fees and 1.5%
monthly interest pursuant to the contracts executed.
• Whitson v. Archer Western Construction, LLC, No. 2:15-cv-00020, filed in the U.S.
District Court for the Middle District of Tennessee, on March 26, 2015.
This is a personal injury lawsuit filed by Cecil Dwayne Whitson ("Whitson"), sole proprietor
of Stately Scapes, in relation to the construction of the Clarksville Waste Water Treatment
Plant.
The complaint stated that in June 2014, Stately Scapes completed construction of various
retaining walls at the Clarksville Waste Water Treatment Plant in Tennessee based on
specifications provided by Archer Western, the general contractor for this construction
project. In October 2014, subsequent inspection revealed soil disturbances which required
significant and expensive reconstruction of several retaining walls. Whitson alleged that
Archer Western and its agents fraudulently misrepresented the results of soil sample
testing conducted prior to the construction of these retaining walls and subsequently forced
Whitson to absorb the costs of reconstructing said retaining walls. Whitson sued Archer
Western for losses suffered from the alleged extra-contractual construction demands and
punitive damages.
On January 29, 2016, the parties filed a motion to stay proceedings pending arbitration,
which was granted by the court on February 5, 2016. The status of this case is "stayed" as
of the writing of this report.
• Whiticar v. Archer Western Construction,LLC and Welsh Group et al, No.2:15-cv-00231,
filed in the U.S. District Court for the Eastern District of Louisiana, on January 8, 2016.
This is a personal property lawsuit filed by Mark Whiticar ("Whiticar"), a homeowner
residing in the Parish of New Orleans, in response to alleged damage to his home resulting
from Archer Western's construction of the R.T.A. Transit Expansion Line on St. Claude
Avenue in New Orleans, 25 feet away from Whiticar's property. Whiticar sued Archer
Western for $400,000 for damages to his home and $300,000 for physical and emotional
distress. The Walsh Group was initially named as a co-defendant in its capacity as Archer
Western's parent company, but subsequently terminated as a co-defendant on March 35,
2016.
On May 19, 2016, Whiticar filed a motion for time extension, which was granted by the
court on May 24, 2016.
• Recreation Development Co., LLC v. Travelers Casualty and Archer Western/Demaria
JV IV et al, No. 2:15-cv-00231, filed in the U.S. District Court for the District of Nevada, on
April 6, 2016.
This is a contract lawsuit filed by Recreational Development Co. LLC ("the Plaintiff"), a
subcontractor engaged by Archer Western in the construction of an administrative building
and education center for the U.S. Department of Veterans Affairs ("DVA").This lawsuit was
filed for recovery of losses under the Miller Act, federal legislation requiring prime
contractors on some government construction contracts to post bonds guaranteeing both
10
•
the performance of their contractual duties and the payment of their subcontractors and
material suppliers.'
The Plaintiff alleged that Archer Western purchased a payment bond from co-defendants
Travelers Casualty and Surety Company of America and Liberty Mutual Insurance
Company in the amount of $38,643,000 in compliance with the Miller Act. The Plaintiff
alleged that Archer Western failed to pay for framing and drywall services in the amount of
$226,967.41, which were contracted by Archer Western on April 30, 2013 and completed
by the plaintiff on April 16, 2015.
• MCI Communications Services, Inc. v. Archer Western Construction, LLC, No. 2:16-cv-
02467-JCZ-JCW, filed in the U.S. District Court for the Eastern District of Louisiana, on
March 24, 2016.
This is a personal property lawsuit filed by MCI Communication Services Inc., a provider
of fiber optic cable in the city of New Orleans. The plaintiff alleged that Archer Western's
excavation conducted as a part of the N. Rampart Street /St. Claude Avenue Streetcar
Expansion Project in New Orleans, Louisiana severed the plaintiff's fiber optic cable,
resulting in damages in excess of$75,000.
• United States et al v. Gulf Mechanical Contractors, LLC and Archer Western DeMaria JV,
II et al, No. 6:16-cv-00718-CEM-GJK, filed in the U.S. District Court for the Middle District
of Florida, on April 27, 2016.
This is a contract lawsuit filed under the Miller Act by the United States for the use and
benefit of Freedom Insulation Inc., a subcontractor engaged by Archer Western's in the
construction of an administrative building and education center for the U.S. Department of
Veterans Affairs ("DVA").
According to the complaint, Archer Western entered into a joint venture with an unknown
foreign entity and created the Archer Western /DeMaria JV II for the purpose of serving as
the prime contractor for the construction of the VA Simlearn National Center in Orlando,
Florida. On December 1, 2014, the Plaintiff entered into a written agreement with lead
defendant Gulf Mechanical LLC, a subcontractor engaged by Archer Western/DeMaria JV
II, for the furnishing, insulation, labor and materials of this construction project. Travelers
Casualty and Surety Company of America and Liberty Mutual Insurance Company were
named as co-defendants in this lawsuit in their capacity as the providers of the Public
Construction Payment Bond in compliance with the Miller Act. The plaintiff sued the
defendants for unpaid invoices of$316,250.37.
• Gallagher-Kaiser Corp v. Archer Western Construction, Ltd et al, No. 2:2015-cv-02150,
filed in the U.S. District Court for the District of Nevada (Las Vegas), on November 11,
2015.
This is a contract lawsuit filed by Gallagher-Kaiser Corp, a subcontractor engaged by
Archer Western's in the construction of certain improvements known as the New ATCT and
Tracon at McCarran International Airport.This lawsuit was filed for recovery of losses under
the Miller Act (see case 2:15-cv-00231 for additional information about the Miller Act).
The plaintiff alleged that Archer Western failed to pay for materials, labor, services and
equipment furnished by the plaintiff pursuant to their subcontract with Archer Western. The
plaintiff sued Archer Western and Travelers Casualty and Surety Company of America, the
provider of Archer Western's payment bond pursuant to the Miller Act, for$7,610,468.20 in
damages including interest and attorney's fees.
Court hearings for this case are ongoing and will continue on June 21, 2016 at 9:00 AM.
www.gsa.gov/portal/getMediaData?mediald=224015
11
• Catlin Specialty Insurance Company v. Archer Western Construction, LLC, No. 1:15-cv-
04262-TWT,filed in the U.S. District Court for the Northern District of Georgia (Atlanta), on
December 8, 2015.
This case was removed from Fulton County State Court (Georgia). Refer to case
2015CV267899 in section 3.1.2 below for details from original complaint filed for this case.
This case is ongoing as of the writing of this report.The last docketed item filed in this case
is a certificate of the Defendant's Initial Disclosures filed by Archer Western on June 8,
2016.
Kroll identified five additional lawsuits naming The Walsh Group as a party, which did not name
Archer Western as a party. Two of these lawsuits relate to allegations of racial discrimination in
hiring practices. The first racial discrimination lawsuit was filed in 2000 and dismissed by the court
in 2001. The second racial discrimination lawsuit was filed in 2006 and settled in 2013. Three of
the lawsuits relate to the Miller Act (see summary of case 2:15-cv-00231 for additional information
on the Miller Act). These three Miller Act lawsuits were filed between 2008 and 2010, of which two
were settled and one was dismissed by the plaintiff.
Kroll identified two additional securities lawsuits against Electronic Data Systems, in which The
Walsh Group is named as a movant. One of these lawsuits was consolidated into the other. The
lead case was terminated in 2006, with the court approving the final distribution plan of settlement
funds in 2012.Archer Western is not named as a party to these two securities lawsuits.
3.1.2 State
Kroll conducted online civil litigation and criminal records searches in available jurisdictions
nationwide.8 Kroll also conducted onsite research in Cook County, Illinois9 and Fulton County,
-Georgia10 for any matters naming Archer Western that were filed in the last 20 years. Kroll's online
nationwide search identified over 200 state level lawsuits filed against Archer Western, 44 of which
were filed within the last three years and are currently open. These 44 lawsuits are reported in the
table below. Kroll reviewed the most recent five lawsuits, which are also detailed below. Kroll can
review the additional lawsuits identified naming Archer Western as a party at the client's request.
Title Case Number Court Date Filed
Commonwealth of Virginia vs.Archer Western Virginia 1st Judicial Circuit September
Construction,LLC and Ondrea Marcel Nixon CL13002346-00 Chesapeake County 25,2013
Donna 16-2013-CA- Florida Circuit Court Duval November
onna Tully v.Archer Western Construction,LLC
010168-XXXX-MA County 18,2013
People of the State of Florida v.Archer Western 16-2013-TR- Florida Circuit Court Duval December 2.
Construction,LLC 103342-CIXX-MA County 2013
Hernan Carrasco vs.Archer Western Construction,LLC et Texas District Court Bexar December
al 2013020389 County 16,2013
Alpha-Republic Investments,Ltd.VS.Texas Department Texas District Court Denton February 18,
of Transportation,Brown&Gay Engineers,Inc.and 14-01095-158 County 2014
Archer Western Contractors,LLC et al.
9 Nationwide online searches cover jurisdictions that make their information available in databases. Certain
jurisdictions do not provide their information to these sources.Available information varies from county to county
and state to state.Some jurisdictions only provide information on felonies,and most jurisdictions report convictions
only.
9 Kroll searched civil,criminal and small claims records at the Fulton County Superior Court,State Court, Magistrate
Court and the Recorder of Deeds from January 1, 1996 through May 29,2016.
10 Kroll searched civil,criminal,and small claims records at the Cook County Superior Court and Recorder of Deeds
from January 1, 1996 through May 29,2016.
12
Title Case Number Court Date Flied,
Constantino Robles vs.Archer Western Contractors,LLC DC-14-02224 Texas District Court Dallas March 4,
County 2014
Felton,Andrentae vs PCL/Archer Western 14-CA-002651 Florida Circuit Court March 12,
Hillsborough County 2014
Fossler,Wayne vs Rogers,James and Archer Western Florida Circuit Court April 18,
Contractors,LLC et al 14-CA-004062 Hillsborough County 2014
Pavlak,Ellen M vs Rodriguez,Yunior R and Archer Florida Circuit Court April 29,
Western Contractors,LLC 14-CA-004464 Hillsborough County 2014
Hardie-Tynes Co Inc vs Archer Western Contractors Ltd Florida Circuit Court May 29,
Inc. 14-CA-005552 Hillsborough County 2014
Cambas Electric,Inc.vs.The McDonnel Group,L.L.C. - 2014-06440 Louisiana 41st District Court June 30,
and Archer Western Contractors,Ltd et al Orleans Parish 2014
USA Professional Labor,L.L.C.vs.Royal Commercial Louisiana 41st District Court
Construction,Inc.and Archer Western Contractors,L.L.C. 2014-06656 Orleans Parish July 9,2014
et al
NES Equipment Services Corporation vs.Royal Louisiana 41st District Court July 15.
Commercial Construction,Inc.and Archer Western 2014-06916 Orleans Parish 2014
Contractors,LLC
Jakob v.Archer Western Contractors,LLC et al 2014CV249183 Georgia Superior Court Fulton July 18,
County 2014
Stolo Cabinets v.Fast-Track Construction and Archer California Superior Court August 22,
Western Contractors,LLC et al. PSC1404568 . Riverside County 2014
Perry,Richard B vs.Piedmont Structural Company and Virginia 4th Judicial Circuit October 1,
Archer Western Contractors,LLC CL14006879-00 Norfolk County 2014
Michael Jakob et al vs.Archer Western Contractors,LLC Georgia Superior Court Fulton November
et al 2014CV254301 County 26,2014
M.L.Coburn&Co.Inc vs.Archer Western Contractors Ltd CL14008494-00 Virginia 4th Judicial Circuit December 1,
Norfolk County 2014
Bellsouth Telecommunications,LLC vs.Archer Western 16-2014-SC- Florida Circuit Court Duval December
Construction,LLC 006346-XXXX-MA County 10,2014
Earl,Tanzania T vs.Archer Western Contractors,LLC et Virginia 13th Judicial Circuit January 12,
al CL15000176-00 Richmond City 2015
R.T.Atkinson Building Corp vs.Archer Western Virginia 4th Judicial Circuit January 12,
Contractors,LLC, CLt5000488-00 Norfolk County 2015
Thompson Grading Inc vs.Archer Western Contractors et Georgia Superior Court January 30,
al. 15100689 Cobb County 2015
Mortensen Mid-Atlantic Limited vs.Archer Western-Heery CL15001921-00 Virginia 4th Judicial Circuit February 13,
International, Norfolk County 2015
Schneidt,Randy vs PCL Civil Constructors Inc.and 15-CA-002776 Florida Circuit Court March 26,
Archer Western Contractors,LLC Hillsborough County 2015
Maria Cazares,et al vs.Trinity Infrastructure LLC and DC-15-03577 Texas District Court March 30,
Archer Western Contractors,LLC et al Dallas County(Civil) 2015
13 .
Title Case Number Court Date Flied
Amerifactors Financial Group LLC vs.Archer Western Florida Circuit Court April 28,
Contractors,LLC 2015-CA-003833-0 Orange County 2015
Fisk-Frischhertz,a Joint Venture vs.The McDonnel Group Louisiana 41st District Court May 12,
LLC and Archer Western Contractors,Ltd.Joint Venture 2015-04553 Orleans Parish 2015
Tindall Corporation vs.The Olympic Group,L.L.C.and 2015-06537 Louisiana 41st District Court July 8,2015
Archer Western Contractors,LTD et al Orleans Parish
Fisk-Frischhertz,a Joint Venture vs.The McDonnel Group Louisiana 41st District Court August 17,
LLC and Archer Western Contractors,Ltd.et at 2015-07862 Orleans Parish 2015
Lafarge North America Inc.vs.SER Development,LLC Louisiana 41st District Court August 31,
and Archer Western Contractors,LLC et al 2015-08304 Orleans Parish 2015
Fowler v.Walsh Group Ltd and Archer Western California Superior Court—Los October 15,
Contractors,Ltd et al BC598033 Angeles County 2015
American Cast Iron v.Archer Western Construction et al 2015CA012590 Florida Circuit Court Palm October 21,
Beach County 2015
Catlin Specialty Insurance Company v.Archer Western Georgia Superior Court November 9,
Contractors LLC, 2015CV267899 Fulton County 2015
Goatee Construction,Inc.vs.The McDonnel Group,L.L.C. 2016-00279 Louisiana 41st District Court January 11,
and Western Contractors,Ltd.et al Orleans Parish 2016
Royal Commercial Construction,Inc.vs.McDonnel Group, 2016-00548 Louisiana 41st District Court January 15,
L.L.C.and Western Contractors,Ltd.et al,Joint Venture Orleans Parish 2016
Tim Lane et al v.Archer Western Contractors,LLC 1531-AC04504-01 Greene County Circuit Court January 19,
(Missouri) 2016
Louisiana CSI,LLC vs.The McDonnel Group,LLC/Archer 2016-00941 Louisiana 41st District Court January 27,
Western Contractors,LTD.,Joint Venture Orleans Parish 2016
Walter Hill Jr vs.LBJ Infrastructure Group LLC and Archer Texas District Court Dallas February 3,
Western,et al DC-16-01351 County 2016
John David Love v.Archer Western Construction,LLC 01-CV-2016- Jefferson County Circuit Court February 18,
900615.00 (Birmingham,Alabama) 2016
Roofing Solutions LLC v.Archer Western Construction C646952 Baton Rouge Parish District March 23,
LLC et al. Court 2016
Maria del Carmen Ortiz v.Ansley E.Johnson and Archer Florida Circuit Court April 28,
Western Contractors,LLC 2016CA2964 Duval County 2016
Yenni Gonzalez V Randy L.Smith and Archer Western 2016CA005461 Florida Circuit Court Palm May 13,
Construction,LLC Beach County 2016
Bellsouth Telecommunications,LLC vs.Archer Western 16-2016-CA- Florida Circuit Court Duval May 13,
Construction,LLC 003319-XXXX-MA County 2016
Maricopa County Superior
Michael Woodhead,et al.vs.City of Phoenix and Archer May 17,
Western Construction,LLC,et al. 1-CA-CV-16-0274 Court and Arizona Court of 2016
Appeals First Division
•
14
• Roofing Solutions LLC and Archer Western, et al, No. C646952, filed in Baton Rouge
Parish District Court (Louisiana) on March 23, 2016.
Roofing Solutions LLC ("the plaintiff'), a subcontractor of a joint venture between Archer
Western and The McDonnel Group LLC, filed this lawsuit in an effort to collect$109,766.56
in alleged unpaid contract work.
On May 11, 2016, Archer Western, along with co-defendants, Granite Construction
Incorporated and the Lane Construction Corporation filed an answer to the plaintiff's initial
petition denying all allegations made by the plaintiff and alleging contributory negligence
on the plaintiff's part.A jury trial date is set for July 17, 2017.
• Maria del Carmen Ortiz v.Ansley E. Johnson and Archer Western Contractors, LLC, No.
C646952, filed in Louisiana Baton Rouge Parish District Court on March 23, 2016.
This is an auto negligence case.According to the complaint, Maria del Carmen Ortiz ("the
plaintiff')was involved in a vehicular collision with Ainsley E. Johnson, a co-defendant and
employee of Archer Western, on March 26, 2016. The plaintiff sued Johnson and Archer
Western for damages in excess of $15,000. This case is ongoing as of the writing of this
report.The last docketed item is a demand for jury trial entered on April 28, 2016.
• Yenni Gonzalez V Randy L. Smith and Archer Western Construction, LLC, No.
2016CA005461, filed in Florida Circuit Court Palm Beach County on May 13, 2016.
This is a lawsuit filed by Yenni Gonzalez in her capacity as the legal guardian of minor child
Ricardo Gamon ("the plaintiff').According to the complaint,the plaintiff alleges that Ricardo
Gamon was struck by a vehicle owned and operated by co-defendants Archer Western and
Randy L. Smith, respectively, on April 5, 2016. The plaintiff sued for damages in excess of
$15,000 for injury, pain, suffering, and disability resulting from the accident. This case is
ongoing as of the writing of this report.
• Bellsouth Telecommunications, LLC vs. Archer Western Construction, LLC, No. 16-
2016-CA-003319-XXXX-MA, filed in Florida Circuit Court Duval County on May 13, 2016.
Bellsouth Telecommunications, LLC doing business as AT&T Florida ("the plaintiff') alleged
that excavation done by Archer Western in the course of a construction project near the
plaintiff's telecommunications facilities located at 1105 San Marco Boulevard,Jacksonville,
Florida severed cables and caused disturbances. The plaintiff sued Archer Western for
$217,903.83 in losses and cost of repairs. This case is ongoing as of the writing of this
report. The last docketed document filed with the Duval County Clerk of Courts is a
summons issued to Archer Western on May 13, 2016.
• Michael Woodhead, et al. vs. City of Phoenix and Archer Western Construction, LLC, et
al., No. 1-CA-CV-16-0274, filed in Maricopa County Superior Court on May 17, 2016.
This is an appeal filed by plaintiff Michael Woodhead ("Woodhead"). According to the
complaint originally filed in the Maricopa County Superior Court on December 14, 2012,
this is a negligence lawsuit resulting from injuries sustained by Woodhead when he was
struck by a motor vehicle while crossing a street. Archer Western was named as a
consolidated defendant alongside 17 other co-defendants, however the complaints filed
with the case do not specify the company's exact involvement. On February 17, 2016,
Maricopa County Superior Court dismissed this case with prejudice, ruling in favour of the
defendants. On May 19, 2016, Woodhead filed a notice of appeal. This case is ongoing
with the appeals court as of the writing of this report.
Kroll's onsite research in Fulton County, Georgia and Cook County, Illinois identified 40 lawsuits
naming Archer Western as a party. Kroll reviewed those lawsuits filed in the last 4 years naming
Archer Western as a defendant, which are detailed below:
15
• Michael Jakob, Peter Jakob, et al vs. Georgia Department of Transportation and Archer
Western Contractors, LLC, et al., No. 2014CV249183, filed in Fulton County Superior
Court on July 18, 2014.
The allegations in the complaint filed in this case are similar to the facts presented in the
aforementioned case (No. 2014CV254301). This case was dismissed without prejudice on
October 6, 2014.
• Michael Jakob, Peter Jakob, et al vs. Health & Lineback Engineers, Inc. and Archer
Western Contractors, LLC, et al., No. 2014CV254301, filed in Fulton County Superior
Court on November 26, 2014.
This is a tort/negligence lawsuit filed by the Michael Jakob, Peter Jakob and F.U.T.C., Inc.
doing business as Elliot Street Deli & Pub (collectively the Plaintiffs") against Archer
Western and eight other co-defendants. The plaintiffs allege that construction activity
carried out by the defendants resulted in structural damage and business losses to the
Elliot Street Deli and Pub. This case was dismissed without prejudice on January 9, 2015.
• Shaw Contract Flooring Services, Inc_. d/b/a Spectra Contract Flooring v. Archer Western
Contractors, LLC, No. 15VS001119, filed in Fulton County State Court on June 6, 2015.
This is a breach of contract lawsuit filed by Shaw Contract Flooring Services Inc. doing
business as Spectra Contract Flooring ("the plaintiff'). On April 3, 2013, Archer Western,
Smallwood & Associates ("Smallwood") and the plaintiff entered into a Joint Check
Agreement, providing that all checks issued by Archer Western to Smallwood for payment
for labor and materials provided be to the plaintiff. The plaintiff alleged that on or about
April 15, 2015, Archer Western issued a check in the amount of $30,200 to Smallwood,
which Smallwood refused to pay to the plaintiff for amounts due. The plaintiff sued Archer
Western for the balance of$30,200 pursuant to the Joint Check Agreement. This case was
dismissed on October 2, 2015.
• Catlin Specialty Insurance Company v. Archer Western Contractors, LLC, et al., No.
2015CV267899, filed in Fulton CountyState Court on November 9, 2015.
According to the complaint, Catlin Specialty Insurance Company ("the Plaintiff") issued an
Excess Insurance Policy with a $15 million Limit of Liability to The Walsh Group ("Catlin
Policy"), which provided excess insurance to another insurance policy issued by Steadfast
Insurance Company. In or about January 2012, Archer Western contracted with the North
Carolina Department of Health and Human services ("NCDHHS") to construct the New
Broughton Hospital in Morganton, North Carolina. On May 12, 2014, Archer Western
notified the Plaintiff of problems with the construction project, including a stop work order
and removal costs for concrete slabs that a NCDHHS engineer judged to be too thick. The
Plaintiff contended that it is not obligated to indemnify Archer Western under the Catlin
Policy, because Archer Western failed to follow the provisions of said policy when
submitting its claim. The Plaintiff further alleged that Archer Western made material
incorrect representations and omissions in its application for the Catlin Policy and had
knowledge of the facts giving rise to the claim prior to the inception of the Catlin Policy.
This case was removed to the U.S. District Court for the Northern District of Georgia
(Atlanta Division) court on December 8, 2015. This case is ongoing as if the writing of this
report.
3.1.3 Bankruptcy
A nationwide online search of U.S. bankruptcy proceedings identified five cases naming Archer
Western as a creditor,two of which are ongoing. Kroll identified two adversary proceedings naming
Archer Western as a defendant. One of these cases was filed in 2015 and dismissed for want of
prosecution in 2016. The other adversary proceeding was filed in 1992 and disposed in 1993.
Excepting the case docket, documents filed in connection with these two adversary proceedings
16
are unavailable online. Kroll can obtain and review the complaints and other case documents by
conducting onsite research at the client's request.
3.2 Judgments, Liens and UCC Filings
Kroll conducted searches of national databases containing judgments, federal and state tax liens
and Uniform Commercial Codes ("UCC") for records naming Archer Western. Kroll conducted
onsite research for judgments and liens in Fulton County, Georgia11 and Cook County, Illinois.t2
Kroll also identified the following database records of judgments and liens naming Archer Western.
Kroll identified over 80 judgments and liens naming Archer Western, of which those filed within the
last five years naming the company as a debtor are reported below. Kroll can conduct further
research into the additional judgments and liens at the client's request.
Date
Debtor Creditor Nature Date Filed Filing No. Court I Office Amount Released
Archer Western District to
District of State Tax Columbia
Contractors Columbia Lien 1/4/2016 2016000352 Recorder of $56,644 Outstanding
LTD.
Deeds
Archer Western Civil Greene Circuit
Contractors LLC Becky Lane Judgment 1/6/2016 1531AC04504 Court $4,174 Unknown
(Missouri)
Archer Western State of State Tax Baltimore City
Contractors Maryland Lien 5/4/2015 24L15005206 Circuit Court $29,132 Outstanding
LTD.
Archer Western State of State Tax Jacksonville
Contractors Mississippi Lien 10/20/2014 1406013 Circuit Court $490 Unknown
State of
Archer Western Georgia State Tax 01/15/2014 2014-0063080 Fulton County $193,481 Outstanding
Contractors LLC Department of Lien Superior Court
Labor
Archer Western State of Texas State Tax 4/11/2014 D214072189 Tarrant County $7,324 5/22/2014
Contractors LLC Lien Recorder
Archer Western State of Texas State Tax 4/4/2014 13632863182D12131 Dallas County $7,324 5/16/2014
Contractors LLC Lien Clerk
Archer Western State of State Tax Madison Circuit
Contractors Mississippi Lien 11/4/2013 147913 Court $821.028 11/19/2013
Archer Western State of State Tax Madison Circuit
Contractors Mississippi Lien 11/4/2013 147914 Court $2.640 11/19/2013
County of
Archer Western Crisp County 2/8/2012 BKI0PGS715A35938 Crisp County $35,938 Unknown
Contractors (Georgia) Tax Lien Superior Court
County of
Archer Western Crisp County 2/8/2012 BK1OPGT715A7017 Crisp County
$7,017 Unknown
Contractors (Georgia) Tax Lien Superior Court
Archer Western County of County Fulton County
Contractors Ltd Fulton Tax Lien 11/8/2011 BK2171PG396 Superior Court $108.22 2/8/2012
(Georgia)
Archer Western Writ of Fulton County
Contractors Ltd City of Atlanta Fieri 11/8/2011 2011-0291244 Superior Court 314.86 2/14/2012
Facias
ti Kroll searched for judgment and lien records at the Cook County Circuit Court and Recorder of Deeds from January
1, 1996 through May 29, 2016, and at the United States District Court for the Northern District of Illinois from
January 1, 1996 through May 29,2016.
12 Kroll searched for judgment and lien records at the Fulton County Recorder of Deeds from January 1, 1996 through
May 29, 2016.
17
Date
Debtor Creditor Nature Date Filed Filing No. Court I Office Amount Released
Archer Western Workforce Civil Salt Lake Third
Contractors LLC Services Judgment 8/8/2011 116926103 District Court $125 8/22/2011
(Utah)
Kroll identified over 400 UCC filings naming Archer Western as a debtor, two of which were filed
within the last 5 years and are detailed below. Kroll can conduct further research into the other
records identified at the client's request.
Debtor: Archer Western Contractors, LTD
Secured Party: Thompson Tractor Co., Inc.
Filing Type: UCC-1 Financing Statement
Filing Date: March 26, 2015
Filing Number: 020165014
Jurisdiction: Illinois
Amount: Unknown
Debtor: Archer Western Contractors, LTD
Secured Party: Thompson Tractor Co., Inc.
Filing Type: UCC-1 Financing Statement
Filing Date: November 15, 2013
Filing Number: 018768208
Jurisdiction: Illinois
Amount: Unknown
3.3 Patents and Trademarks
Using the search terms"Archer Western" Kroll identified no U.S. patents currently registered to the
company. Using the same search term, Kroll identified the following trademark assigned to the
company:
Serial Number: 77051396
Registration Number: 3400643
Word Mark: ARCHER WESTERN CONTRACTORS
Live/Dead: LIVE
Filing Date: November 27, 2006
3.4 Regulatory Registrations and Actions
3.4.1 Occupational Health and Safety Administration
Kroll searched the Occupational Health and Safety Administration ("OSHA") website for violations
naming Archer Western. Archer Western or its affiliates and joint ventures were the subject of 26
OSHA inspections which contained violations. These violations are summarized in the table below.
Open Date Office Standard Cited Penalty
7/14/2015 Virginia Safety 2 Wiring methods,components.and equipment for general use $2,082
7/2/2015 Baton Rouge General requirements $3,500
4/13/2015 Englewood Safety training and education $4,000
12/3/2014 Virginia Safety 2 Duty to have fall protection $1,837
9/16/2014 Virginia Safety 2 Means of egress $882
Stairways
4/1/2014 Austin Requirements for cast-in-place Concrete $3,500
18
Open Date Office Standard Cited Penalty
12/2/2013 Virginia Safety 2 General requirements $2.572
5/31/2013 Concord Beams and columns $11,000
General requirements
4/19/2013 Virginia Safety 2 Fall protection systems criteria and practices $612
11/29/2012 Virginia Safety 2 Requirements for protective systems $1,274
3/28/2012 Tenn Cmpl Sfty 2 Wiring design and protection $0
3/12/2012 Virginia Safety 2 Rigging equipment for material handling $1,838
Specific excavation requirements
3/12/2012 Virginia Tw Reg Hlth Unspecified $0
8/24/2011 Nc Raleigh General recording criteria $6,950
6/22/2011 Oklahoma City Requirements for protective systems $3,000
8/27/2010 Atlanta West Aerial lifts $2,500
Flammable and combustible liquids
7/15/2009 Baltimore Power-operated hand tools $2,000
Gas welding and cutting
10/27/2008 Bellevue Stairways $563
12/19/2007 Arizona Phoenix Say Requirements for protective systems $2,250
9/4/2007 Nc Winston Salem Unspecified $6,300
Marine operations and equipment
6/17/2007 Jackson Rigging equipment for material handling $13,500
Duly to have fall protection
Requirements for cast-in-place Concrete
3/21/2007 Jackson OSH Act General Duty Paragraph $2,250
Safety training and education
1/23/2007 Atlanta West Lead $10,000
10/12/2006 Raleigh Duty to have fall protection $800
9/14/2006 Little Rock General requirements $1,700
6/27/2006 Austin Forms $0
Of the above listed violations, Kroll reviewed the accident reports for inspections where fatalities
occurred. These accident reports are detailed as follows:
The investigation opened on June 14,2007 in Jackson involved two fatalities and twelve employees
injured during a bridge collapse. According to the accident report, on June 14, 2007, a 12 man
crew was pouring concrete into a 48 foot vertical column for the construction of the north bridge
over the Bay of Saint Louis, when the bridge collapsed. Nine employees fell into the bay, which
was approximately 12 to 14 feet deep at the location of the accident. One employee removed from
the bay died of asphyxiation due to drowning.Another employee could not be located on the day
of the fall and was subsequently found deceased on the following day. Seven employees were
hospitalized for cuts and released the following day.
The investigation opened on March 20, 2007 in Jackson involved one fatality and two injuries
resulting from a boat collision.According to the accident report, at approximately 8:15 PM on March
20, 2007, an employee was operating a crew boat with two additional employees as passengers.
The employee operating the boat left the shore and was returning to a bridge under construction,
19
•
when he collided with the bow of a barge that was also underway. The employee operating the
boat died from chest injuries, one passenger was hospitalized for injuries and the other passenger
employee was injured, but was not hospitalized.
3.4.2 Securities Industry Regulatory Actions
Kroll searched for any sanctions or actions by governmental or self-regulatory organizations,
including the Financial Industry Regulatory Authority (or its predecessor the National Association
of Securities Dealers), the New York Stock Exchange, the U.S. Securities and Exchange
Commission, the National Futures Association, and the Commodity Futures Trading Commission.
Kroll identified no adverse records naming Archer Western.
3.4.3 Office of Foreign Assets Control and Watch Lists
Archer Western was not identified on any"watch" lists to which Kroll subscribes. Research used to
obtain this information included a search of both international and national organizations, including
but not limited to the U.S. Department of Treasury's Office of Foreign Assets Control, the United
Kingdom's Financial Conduct Authority, and Interpol, as well as national and international media
sources.
3.4.4 United States Tax Court
An online search of tax petitions filed from 1986 to the present identified no records naming Archer
Western.
20
4. INFRARED CAPITAL PARTNERS LIMITED
4.1 Research in the U.K.
4.1.1 Identification
InfraRed Capital Partners Limited was incorporated on May 2, 1997 as 909th Shelf Trading
Company Limited. It went through several name changes —Charterhouse Property Fund Manager
Limited (1997), Charterhouse Specialist Advisory Services Limited (1999), Charterhouse Property
Fund Management Limited (2001), HSBC Property Fund Management Limited (2002) and HSBC
Specialist Fund Management (2005) — before being given its current name on April 8, 2011. Its
registered address is 12 Charles II Street, London SW1Y 4QU.
The company's website reports that the business that is now InfraRed Capital Partners ("InfraRed")
began in 1990 as Charterhouse Bank. 13 It initially invested in real estate, expanding into
infrastructure in 1997. HSBC acquired the business in 2000.14 InfraRed now operates a joint
venture with the Hong Kong-based real estate developer and textiles giant Nan Fung Group,
focusing on commercial and residential real estate projects in Greater China. Following a
management buyout of 80.1 per cent of the business from HSBC in 2011, the business was
rebranded InfraRed Capital Partners.15At the time, it had just over $4 billion in equity in funds
investing in real estate and infrastructure.16
The InfraRed group describes itself on its website as"a leading global investment manager focused
on infrastructure and real estate."17 The group has offices in London, Hong Kong, New York, Paris,
Sydney and Seoul, managing $9 billion of equity capital in private and listed funds.
InfraRed Capital Partners Limited does not have any subsidiaries. Its ultimate parent is InfraRed
Capital Partners (Management) LLP, which is the apex company of a group comprising 279
companies, according to the DueDil corporate database. Its intermediate parent company, InfraRed
Partners LLP, holds the group's investments in joint ventures. InfraRed's website reports that the
entity is owned by its management team.18
In February 2016 various media sources reported on rumors that a dispute had erupted between
InfraRed and its venue operation partner of Sports Hub Pte Ltd ("Sports Hub") in Singapore, Global
Spectrum Pico.t9 InfraRed, the major equity partner, was said to be planning to terminate Global
Spectrum Pico's contract, believing that some of the commercial deals it had signed for sporting
events and pop concerts at the Sports Hub venue had breached the terms of the venue operating
contract and caused losses.20 An audit by KPMG had reportedly found a lack of alignment between
the interests of Global Spectrum Pico, shareholders and government stakeholders. InfraRed and
Global Spectrum Pico issued a joint statement denying that termination of the contract had ever
been discussed.21
13 http://ircp.com/about-us.html#about-us_
14 Ibid
15 IPE Quest, 5 May 2011
16 Ibid
17 http://ircp.com/about-us.html#about-us_
18 Ibid
79 "Sports Hub set to cut ties with Global Spectrum Pico,"The New Paper, February 19, 2016; "Singapore's Sports
Hub consortium faces partnership breakdown,"Channel NewsAsia, February 18, 2016
20 Today(Singapore),February 20, 2016
21 Straits Times, February 21,2016
21
4.1.2 Recent Newsworthy Developments22
• InfraRed Capital Partners Limited is part of the Portsmouth Gateway Group which was the
successful bidder for the US$429 million Portsmouth bypass project in southern Ohio in
2014. The consortium also includes Dragados, USA Inc, The Beaver Excavating Co, John
R Jurgensen Co, ms Consultants,ACS Infrastructure Development and Star America Fund
GP.23
• In November 2014, a fund raising by InfraRed's value-added real estate fund Active Fund
III was oversubscribed by£75 million at£475 million. Over 20 investors from Europe, the
US, Canada, Malaysia,Australia, Qatar and the UAE committed equity to the fund, which
invests in commercial property in UK, Germany and France.24
• In February 2015, InfraRed became an equity investor in Tidal Lagoon Power, the
company behind the Swansea Bay Tidal Lagoon project. The new, unproven technology
comprises a manmade breakwater which would create power from tidal movement, with
hydro-turbines generating electricity when water flows through the blades. InfraRed
Capital and the other equity investor, Prudential, each invested £110 million. The rest of
the £1 billion project will be debt financed by up to to 26 banks.25
The Citizens Advice Bureau described the project as "appalling value for money" for
consumers.26
At the end of last year, there was speculation that the "fantasy project" would never be
realised. Despite planning permission being granted in June 2015, the start of construction
has been delayed from spring 2016 to 2017.27
• InfraRed announced in February 2015 that it was making changes to its New York-based
North American team with a view to expanding its infrastructure portfolio in the region.
"With the recent financial close on the Portsmouth Bypass P3(Ohio) and the best value
proposer award of the SH-288 Tolled Lanes (Texas) - and with other opportunities at an
advanced stage- InfraRed is expecting to grow its North American portfolio of
infrastructure investments during 2015,"said InfraRed in a statement.
• InfraRed is a member of the Blueridge Transportation Group, which won the contract for
the US$800 million SH 288 highway PPP project in Texas from the Texas Transportation
Commission in March 2015. The other consortium members are ACS Servicios y
Concesiones and Shikun & Binui Concessions USA plus other local and national
contractors. Construction work was scheduled to start in late 2015 and be completed in
early 2019.28
• In June 2015, a consortium comprising Balfour Beatty plc, Prime plc and InfraRed Capital
Partners Limited won a €140 million contract to provide 14 primary care centres in
Ireland.A press release noted that over the last five years, the three companies have
successfully raised over€3 billion of senior debt funding to support projects across the
PPP infrastructure and primary care markets.29
• In July 2015, InfraRed and DIF of the Netherlands refinanced their 2011 debt package to
back the A63 toll road project in France, adding a €860 million senior debt facility to the
22 News items refer to"InfraRed Capital Partners"rather than specifically to Infrared Capital Partners Limited, unless
otherwise stated.
23 Real Estate Monitor Worldwide,29 September 2014
24 PERE, 19 November 2014
25 Western Mail,6 February 2015
26 Western Mail, 23 February 2015
27lndependent,25 November 2015
28 Business Monitor Online,4 March 2015
29 MarketLine NewsWire, 5 June 2015
22
original€200 million equity and€900 million leverage. InfraRed owns 42 per cent of the
consortium through the US$1.2 billion InfraRed Infrastructure Fund 111.3°
• In November 2015, InfraRed Capital Partners Limited bought a portfolio of nine industrial
estates from Stretton Property Group for£42 million on behalf of the InfraRed Active Real
Estate Fund III. InfraRed reportedly intends to improve and actively manage the assets.31
• In February 2015, InfraRed bought the St George's shopping centre in Preston,
Lancashire from Aviva for£75 million on behalf of the InfraRed Active Real Estate Fund
111,32
• In February 2016, the Irish energy developer Mainstream Renewable Power was said to
be poised to close funding with a consortium which included InfraRed for the £2 billion
Neart na Gaoithe offshore wind far in Scotland.33
• In April 2016, The Renewable Infrastructure Group ("TRIG"), which is backed by InfraRed
and advised by InfraRed Capital Partners Limited, proposed to issue 300 million ordinary
and C shares. The board wants to be able to access capital quickly to take advantage of
potential onshore wind and solar investments.34
• In June 2016, InfraRed Infrastructure, which is part of InfraRed, bought Serco's ten per
cent equity stake in SecureFuture Wiri, the company which has the contract to design,
build and run Wiri Prison in South Auckland, New Zealand. Serco will continue to operate
the facility as a subcontractor.35
4.1.2.1 Outstanding Bids
• InfraRed is part of the Bombardier consortium, one of three bidders shortlisted in
November 2015 for the High Capacity Metro Trains public-private partnership deal to
supply and maintain 37 electric multiple-units for suburban services in Melbourne,
Australia.36
4.1.2.2 Divestments
• In February 2015, InfraRed Capital Partners Limited sold the "Eagle Portfolio" of mainly
multi-let industrial estates to Mansford LLP for over£60 million, giving an initial yield of
about eight per cent.37
• In December 2015, InfraRed completed the sale of four wind farms to a single investor
account managed by Hastings Fund Management. The purchase price was not
disclosed.38
• InfraRed Capital Partners Limited and OPSEU Pension Trust sold the Standford Hill wind
farm on the Isle of Sheppey and Oakdale wind farm in Caerphilly, Wales to Resonance
British Wind Energy Income Limited in January 2016. The purchase price was not
disclosed in the press.39
3° Infrastructure Investor, 6 July 2015
31 Property Funds World,2 November 2015
32 Estates Gazette,21 February 2015
33 Business Monitor Online, 2 February 2016
34 Infrastructure Investor, 15 April 2016
36 BusinessDesk, 16 June 2016
36 Tenderslnfo, 14 November 2015
37 http://ircp.com/news-media/news/article/infrared-sells-eagle-portfolio-to-mansford-Ilp-for-60m.html
38 http://ircp.com/news-media/news/article/infrared-completes-sale-of-85mw-portfolio-of-four-wind-farms.html
39 GlobalData Financial Deals Tracker, 3 February 2016
23
• In March 2016, InfraRed Capital Partners Limited sold Clayton Square Shopping Centre in
Liverpool to Rockspring's UK Value 2 Fund for£38.4 million.40
4.1.3 Directors
InfraRed Capital Partners Limited has had the following current officers since incorporation:
• Christopher John Huxtable - director since 3 November 1997
• Werner Marc Friedrich von Guionneau - director since 3 June 1999
• Anthony Charles Roper- director since 10 May 2006
• James Edward Hall-Smith - director since 6 May 2008
• Christopher Paul Gill - director since 8 July 2009
• Bryn David Murray Jones - director since 19 January 2010
• Alison Wyllie - secretary since 11 April 2011
Former officers include:
• Gareth Irons Craig - director 6 February 2006 to 26 June 2015
• Mark Richard Woodhams - director 21 April 2011 to 30 June 2014
• Edward Douglas Glover- director 3 November 1997 to 2 August 2011
• Stephen Owen - secretary 8 September 2009 to 11 April 2011
• Paul Emmanuel Mackey- director 3 November 1997 to 29 September 2010
• Philip Miller- secretary 10 July 2008 to 8 September 2009
• Timothy Geoffrey Thorp -director 12 February 2001 to 29 April 2009
• Simon Peter de Albuquerque - director 3 June 1999 to 25 November 2008
• Louisa Jane Jenkinson - secretary 1 October 2002 to 10 July 2008
• Dr Guy Donovan Morrell -director 13 May 2004 to 30 April 2007
• Nicola Suzanne Black - secretary 13 February 2001 to 1 October 2002
• Simon David Ringer- director 22 April 1998 to 1 May 2001
• Paternoster Secretaries Limited - secretary 4 November 1997 to 13 February 2001
• Ian Barrass - director 3 June 1999 to 12 February 2001
• Adam Peacock Seymour- director 3 June 1999 to 15 December 2000
• Claire Powell - director 31 March 1999 to 31 August 2000
• Julia Elizabeth Prescot- director 3 June 1999 to 7 April 2000
• Sisec Limited - nominee secretary 2 May 1997 to 4 November 1997
• Serjeants' Inn Nominees Limited nominee director 2 May 1997 to 3 November 1997
• Loviting Limited - nominee director 2 May 1997 to 3 November 1997
4.1.4 Profiles of key executives
4.1.4.1 Werner von Guionneau
Background
Werner Marc Friedrich von Guionneau ("von Guionneau") was born on April 27, 1957 and is
German, according to UK corporate records.
Von Guionneau is the chief executive and a managing partner of InfraRed Capital Partners. He
joined the group in 1995 when it was known as Charterhouse Bank.As joint chief executive of the
bank, he and other senior InfraRed executives restructured the bank into a private equity
investment business focusing on infrastructure and real estate.41
Before joining Charterehouse Bank, von Guionneau worked in property investment, corporate
finance and private equity in the US and Germany.42
The following addresses have been identified as being linked to von Guionneau:
40 Property Funds World,7 March 2016
41 http://ircp.com/people/profile/werner-von-guionneau.html#managing-partners
42 https://www.infrastructureinvestor.com/SpeakersProfile/?speaker=9493
24
• 33 Landsdowne Road, London W11 2LQ (1995 to 2012)
• 14 Connaught Square, London W2 2HG (1990 to 1993)
Corporate Affiliations
Von Guionneau has 19 current UK appointments43, all with companies in the InfraRed group.
A list of his current UK appointments is provided in Appendix One.
He has 34 previous UK appointments.
Regulatory
Von Guionneau is regulated by the Financial Conduct Authority under reference number
WMV01002. He is authorised to carry out controlled functions at InfraRed Capital Partners Limited
and InfraRed (Infrastructure) Capital Partners Limited. Up to 2012, he was also authorised to carry
out controlled functions at CL Residential Limited.
There is no disciplinary history noted for von Guionneau in the Financial Services Register.
Adverse Media Search
Searches of press archives have identified no significant red flags concerning von Guionneau. He
has been quoted in the press from time to time as the chief executive of InfraRed Capital Partners.
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for von Guionneau at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of von Guionneau
as having been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
43 Von Guionneau is not included in the UK Register of Disqualified Directors.Please note that once a disqualification
has been spent,the individual in question's name will be removed from the list.This therefore does not represent
a definitive conclusion that von Guionneau has never been a disqualified director in the UK during the course of
his career. There are no references to von Guionneau in the ICC database of UK disqualified directors, which
includes historical disqualifications.
25
Insolvency and Bankruptcy
Von Guionneau is not included in the Individual Insolvency Register for England and Wales. The
Individual Insolvency Register contains details of bankruptcies that are current or have ended in
the last three months; debt relief orders that are current or have ended in the last three months;
current individual voluntary arrangements and fast-track voluntary arrangements, including those
that have ended in the last three months; current bankruptcy restrictions orders or undertakings
and interim bankruptcy restrictions orders; current debt relief restrictions orders or undertakings
and interim debt relief restrictions orders. It should however be noted that, should an individual pay
off their debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to von Guionneau.
4.1.4.2 Chris Gill
Background
Christopher Paul Gill, known as Chris ("Gill") was born on December 2, 1957 and is British,
according to UK corporate records.
Gill is the deputy chief executive and a managing partner of InfraRed Capital Partners. He is
responsible for managing the business on a day-to-day business, including responsibility for
finance, risk and compliance.
From 1991 to 2001, he held various credit roles, latterly as head of credit risk management at
HSBC in London. He was responsible for HSBC's global private equity investment from 2003 to
2008, sitting on the boards of several third party funds.44
The following addresses have been identified as being linked to Gill:
• Silvertrees, 18 Burntwood Road, Sevenoaks, Kent TN13 1PT(since 1993)
• 23 Nutfields, Ightham, Sevenoaks, Kent TN15 9EA
Corporate Affiliations
Gill has 34 current UK appointments45, all but one with companies in the InfraRed group or funds
for which it is the investment manager.
Christopher and Kirstin Gill are the directors and shareholders of Binigill Limited, a real estate
company registered at their home address which was incorporated in January 2014. Officially
classified as a small company, it had assets of€448,041 but net liabilities of€17,976 at 31 January
2016. The company owed €232,608 to Christopher Gill and€232,608 to Kristen Gill at that date.
A list of Gill's current appointments is provided in Appendix One. He has 50 previous appointments.
Regulatory
Gill is regulated by the Financial Conduct Authority under reference number CPG0101. He is
authorised to carry out controlled functions at InfraRed Capital Partners Limited and InfraRed
(Infrastructure) Capital Partners Limited. He was previously authorised to carry out controlled
functions at various HSBC entities and CL Residential Limited.
There is no disciplinary history noted for Gill in the Financial Services Register.
44 http://ircp.com/people/profile/chris-gill.html#managing-partners
45 Gill is not included in the UK Register of Disqualified Directors.Please note that once a disqualification has been
spent,the individual in question's name will be removed from the list. This therefore does not represent a definitive
conclusion that Gill has never been a disqualified director in the UK during the course of his career.There are no
references to Gill in the ICC database of UK disqualified directors,which includes historical disqualifications.
26
Adverse Media Search
Searches of press archives have identified no significant red flags concerning Gill. He has a fairly
low media profile.
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for Gill at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Gill as having
been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Gill is not included in the Individual Insolvency Register for England and Wales. The Individual
Insolvency Register contains details of bankruptcies that are current or have ended in the last three
months; debt relief orders that are current or have ended in the last three months; current individual
voluntary arrangements and fast-track voluntary arrangements, including those that have ended in
the last three months; current bankruptcy restrictions orders or undertakings and interim
bankruptcy restrictions orders; current debt relief restrictions orders or undertakings and interim
debt relief restrictions orders. It should however be noted that, should an individual pay off their
debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Gill.
4.1.4.3 Bryn Jones
Background
Bryn David Murray Jones ("Jones") was born on November 13, 1962 and is British, according to
UK corporate records.
Jones is a managing partner at InfraRed, focusing on greenfield infrastructure investments and is
also responsible for the latest global development fund. He oversees business development in the
infrastructure team.
27
Before joining InfraRed in 1998, he worked for Ernst Young in corporate finance, then PFI/PPP and
project finance advisory transactions.46
InfraRed announced in May 2015 that Jones was relocating to New York "to oversee a new growth
initiative for InfraRed's infrastructure business line in the North American region". He retained his
existing responsibilities as well as leading the team in North America.47
The following addresses have been identified as being linked to Jones:
• Westwood, West Street, Mayfield, East Sussex TN4 8XT (2012 to 2015)
• 5 Lake Road, Tunbridge Wells, Kent TN4 8XT (1996 to 2002)
Corporate Affiliations
Jones has four current UK appointments, all with companies in the InfraRed group.48
A list of his current appointments is provided in Appendix One. He has 34 previous UK
appointments.
Regulatory
Jones is regulated by the Financial Conduct Authority under reference number BXJ01061. He is
authorised to carry out controlled functions at InfraRed Capital Partners Limited and InfraRed
(Infrastructure) Capital Partners Limited.
There is no disciplinary history noted for Jones in the Financial Services Register.
Adverse Media Search
Searches of press archives have identified no significant red flags concerning Jones. He has
occasionally been quoted in the press in connection with InfraRed Capital's infrastructure projects.
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England & Wales did not identify any
entries for Jones at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Jones as having
been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
46 http://ircp.com/people/profile/bryn-jones.html#managing-partners
47 http://ircp.com/news-media/news/article/infrared-capital-partners-changes-in-the-infrastructure-team.html
48 Jones is not included in the UK Register of Disqualified Directors. Please note that once a disqualification has
been spent,the individual in question's name will be removed from the list. This therefore does not represent a
definitive conclusion that Jones has never been a disqualified director in the UK during the course of his career.
There are no references to Jones in the ICC database of UK disqualified directors, which includes historical
disqualifications.
28
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Jones is not included in the Individual Insolvency Register for England and Wales. The Individual
Insolvency Register contains details of bankruptcies that are current or have ended in the last three
months;debt relief orders that are current or have ended in the last three months; current individual
voluntary arrangements and fast-track voluntary arrangements, including those that have ended in
the last three months; current bankruptcy restrictions orders or undertakings and interim
bankruptcy restrictions orders; current debt relief restrictions orders or undertakings and interim
debt relief restrictions orders. It should however be noted that, should an individual pay off their
debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Jones.
4.1.4.4 Christopher Huxtable
Background
Christopher John Huxtable, also known as Chris ("Huxtable") was born on September 12, 1964
and is British, according to UK corporate records.
Huxtable is a managing partner and the head of European real estate at InfraRed.
He joined Charterhouse as it was then known in 1996, originally helping to build the principal
property and specialist fund management businesses. He previously worked for DTZ Debenham
Tie Leung and AMP Asset Management.49
The following addresses have been identified as being linked to Huxtable:
• Oaklands, Coombe End, Kingston upon Thames, Surrey KT2 7DQ (2010 to 2013)
• The Cottage, Golf Club Drive, Kingston upon Thames, Surrey KT2 7DF (2003 to 2008)
• 26 Latimer Road, London SW19 1EP (1997 to 2002)
• 48 Palmerston Road, London SW19 1PQ (1993 to 1996)
Corporate Affiliations
Huxtable has 35 current UK appointments50, all of which are with companies in the InfraRed group.
A list of his current appointments is provided in Appendix One. He has 43 previous UK
appointments.
Regulatory
Huxtable is regulated by the Financial Conduct Authority under reference number CJHO1179. He
is authorised to carry out controlled functions at InfraRed Capital Partners Limited. He was
previously also authorised to carry out controlled functions at CL Residential Limited.
49 http://ircp.com/people/profile/christopher-huxtable.html#managing-partners
so Huxtable is not included in the UK Register of Disqualified Directors.Please note that once a disqualification has
been spent, the individual in question's name will be removed from the list. This therefore does not represent a
definitive conclusion that Huxtable has never been a disqualified director in the UK during the course of his career.
There are no references to Huxtable in the ICC database of UK disqualified directors,which includes historical
disqualifications.
29
There is no disciplinary history noted for Huxtable in the Financial Services Register.
Adverse Media Search
Searches of press archives have identified no significant red flags concerning Huxtable. He has
been quoted in the press from time to time as InfraRed's head of European real estate, mainly in
connection with shopping centre investments.
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for Huxtable at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Huxtable as
having been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Huxtable is not included in the Individual Insolvency Register for England and Wales.The Individual
Insolvency Register contains details of bankruptcies that are current or have ended in the last three
months;debt relief orders that are current or have ended in the last three months; current individual
voluntary arrangements and fast-track voluntary arrangements, including those that have ended in
the last three months; current bankruptcy restrictions orders or undertakings and interim
bankruptcy restrictions orders; current debt relief restrictions orders or undertakings and interim
debt relief restrictions orders. It should however be noted that, should an individual pay off their
debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Huxtable.
4.1.4.5 James Hall-Smith
Background
James Edward Hall-Smith ("Hall-Smith") was born on March 31, 1969 and is British, according to
UK corporate records.
Hall-Smith is a managing partner of InfraRed and in charge of sourcing, structuring and securing
new infrastructure investments in Europe. He is also responsible for the InfraRed environmental
infrastructure fund.
30
He started his career as an engineer with Mott MacDonald and prior to joining InfraRed in 1997,
worked in Hambros Bank's project advisory unit, working on early UK Private Finance Initiative
projects.51
The following addresses have been identified as being linked to Hall-Smith:
• Abbey Oak, Wherwell,Andover SP11 7HY (2002 to 2014)
• 23 Kelmscott Road, London SW11 6QX (1998 to 2001)
• 143 Bennerley Road, London SW11 6DX (1995 to 1998)
4.1.4.6 Corporate Affiliations
United Kingdom
Hall-Smith has 31 current UK appointments52, all of which are with companies in the InfraRed group
or joint ventures.
A list of his current appointments is provided in Appendix One. He has 14 previous UK
appointments.
Regulatory
Hall-Smith is regulated by the Financial Conduct Authority under reference number JEH01099. He
is authorised to carry out controlled functions at InfraRed Capital Partners Limited and InfraRed
(Infrastructure) Capital Partners Limited.
There is no disciplinary history noted for Hall-Smith in the Financial Services Register.
Adverse Media Search
Searches of press archives have identified no significant red flags concerning Hall-Smith. He has
occasionally been quoted in the media in connection with InfraRed's environmental infrastructure
investments.
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for Hall-Smith at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Hall-Smith as
having been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
51 http://ircp.com/people/profile/james-hall-smith.html#managing-partners
52 Hall-Smith is not included in the UK Register of Disqualified Directors.Please note that once a disqualification has
been spent, the individual in question's name will be removed from the list. This therefore does not represent a
definitive conclusion that Hall-Smith has never been a disqualified director in the UK during the course of his career.
There are no references to Hall-Smith in the ICC database of UK disqualified directors,which includes historical
disqualifications.
31
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Hall-Smith is not included in the Individual Insolvency Register for England and Wales. The
Individual Insolvency Register contains details of bankruptcies that are current or have ended in
the last three months; debt relief orders that are current or have ended in the last three months;
current individual voluntary arrangements and fast-track voluntary arrangements, including those
that have ended in the last three months; current bankruptcy restrictions orders or undertakings
and interim bankruptcy restrictions orders; current debt relief restrictions orders or undertakings
and interim debt relief restrictions orders. It should however be noted that, should an individual pay
off their debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Hall-Smith.
4.1.4.7 Tony Roper
Background
Anthony Charles Roper, known as Tony ("Roper") was born on December 11, 1960 and is British,
according to UK corporate records.
Roper is a managing partner of InfraRed and oversees the teams advising InfraRed's three
brownfield infrastructure investment vehicles: HICL Infrastructure Company Limited, The
Renewables Infrastructure Group Limited, and the unlisted Yield Fund. He is also head of asset
management.
Prior to joining InfraRed in 2006, he spent 12 years with John Laing Group, where he built up the
infrastructure investment business.53
The following addresses have been identified as being linked to Roper:
• Allington Grange,Allington, Chippenham, Wiltshire SN14 6LW (since 1997)
• 24 Binden Road, London W12 9RJ (2000 to 2002)
• 53 Speldhurst Road, London W4 1 BY (1993 to 1999)
Corporate Affiliations
Roper has 58 current UK appointments54, all with companies that are part of the InfraRed group,
funds for which it is the investment manager, or joint ventures.
A list of his current appointments is provided in Appendix One. He has 89 previous UK
appointments.
Regulatory
Roper is regulated by the Financial Conduct Authority under reference number ACR01071. He is
authorised to carry out controlled functions at InfraRed Capital Partners Limited and InfraRed
53 http://ircp.com/people/profile/tony-roper.html#managing-partners
54 Roper is not included in the UK Register of Disqualified Directors. Please note that once a disqualification has
been spent, the individual in question's name will be removed from the list. This therefore does not represent a
definitive conclusion that Pritchard has never been a disqualified director in the UK during the course of his career.
There are no references to Roper in the ICC database of UK disqualified directors, which includes historical
disqualifications.
32
(Infrastructure) Capital Partners Limited. He was previously authorised to carry out controlled
functions at John Laing Capital Management Limited.
There is no disciplinary history noted for Roper in the Financial Services Register.
Adverse Media Search
Searches of press archives have identified no significant red flags concerning Roper. He has
occasionally been quoted in the media, mainly in connection with HICL Infrastructure investment
trust which he manages.
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for Roper at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Roper as having
been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Roper is not included in the Individual Insolvency Register for England and Wales. The Individual
Insolvency Register contains details of bankruptcies that are current or have ended in the last three
months; debt relief orders that are current or have ended in the last three months; current individual
voluntary arrangements and fast-track voluntary arrangements, including those that have ended in
the last three months; current bankruptcy restrictions orders or undertakings and interim
bankruptcy restrictions orders; current debt relief restrictions orders or undertakings and interim
debt relief restrictions orders. It should however be noted that, should an individual pay off their
debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Roper.
4.1.5 Financing Agreements in the U.K.
Kroll identified the following nine outstanding financing agreements naming InfraRed in the U.K.
Date InfraRed Entity/Entities Other Party/ Type Notes
Created Parties
1/30/2012 InfraRed Capital Partners Limited National Australia Security
Bank Limited Agreement
1/30/2012 InfraRed Capital Partners Limited and InfraRed National Australia In favor of National
Environmental Infrastructure Fund(I)LP Bank Limited Australia Bank Limited
33
Security
Agreement
InfraRed Capital Partners Limited and InfraRed National Australia
1/30/2012 Security In favor of National
Environmental Infrastructure Fund(II)LP Bank Limited
Agreement Australia Bank Limited
InfraRed Capital Partners Limited and InfraRed National Australia
1/30/2012 Deed of In favor of
Environmental Infrastructure Fund(III)LP Bank Limited
Assignment Australia Bank nk k Limited
InfraRed Capital Partners Limited,InfraRed
3/13/2015 Infrastructure III(No 5)LP and InfraRed Infrastructure HSBC Bank plc Deed of In favour of HSBC
III(SCV)LP Assignment Bank plc as assignee
InfraRed Capital Partners Limited,InfraRed
3/13/2015 Infrastructure III(No 5)LP,InfraRed Infrastructure III HSBC Bank plc Deed of In favour of HSBC
(No 2)LP,InfraRed Infrastructure III(No 3)LP and Assignment Bank plc as assignee
InfraRed Infrastructure III(No 4)LP
InfraRed Capital Partners Limited,InfraRed Active Real Wells Fargo Bank,
3/24/2015 Estate III(No.2)LP and InfraRed Active Real Estate III National Security in favour of HSBC
General Partner LLP Association, Assignment Bank plc as assignee
London Branch
InfraRed Capital Partners Limited,InfraRed Active Real Wells Fargo Bank, In favour of Wells
3/24/2015 Estate III(No 1)LP and InfraRed Active Real Estate III National Security Fargo Bank,National
General Partner LLP Association Assignment Association as security
trustee
InfraRed Capital Partners Limited,InfraRed
3/22/2016 Infrastructure III(No.6)LP and InfraRed Infrastructure HSBC Bank plc Deed of In favour of HSBC
III(No.7)LP Assignment Bank plc as assignee
4.1.6 Adverse Public Records
4.1.6.1 Register of Judgments, Orders and Fines for England & Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for InfraRed Capital Partners.55
4.1.7 U.K. Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found the following no references to
InfraRed Capital Partners as having been involved as a named party in reported litigation in the
U.K.
This does not represent a definitive conclusion that the subjects have not been involved in any civil
or criminal proceedings in this country. Whilst statements of case are available for public
inspection, such information is not available on an online database. This means that, unless it is
known in advance that a subject is or has been involved in legal proceedings in a particular court,
it is difficult, if not impossible, to gather this information without actually inspecting the records of
individual County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable U.K. litigation archives do not contain information from criminal cases.
4.1.7.1 U.K. Regulatory Records
InfraRed Capital Partners Limited is regulated by the Financial Conduct Authority ("FCA") under
reference number 195766. It has been authorised by the FCA since 1 April 2013 to provide
regulated products and services. Prior to that, it was regulated by the FCA's predecessors, the
Investment Management Regulatory Organisation and the Financial Services Authority.
Kroll identified no disciplinary history for InfraRed Capital Partners Limited in the Financial Services
Register.56
55 The Register of Judgments, Orders and Fines for England &Wales is a statutory public register run on behalf of
the Ministry of Justice. The Register covers all non-defended money-related County Court Judgments,
Administration Orders,Child Support Agency Liability Orders,High Court Judgments, Fines defaults and Tribunal
Awards. County Court and High Court Judgments remain on the Register for six years. Other orders and awards
may be removed earlier.
56 Disciplinary history noted in the Financial Services Register would include details of supervisory,disciplinary and
civil regulatory action(but not criminal action)which the Financial Conduct Authority("FCA"),Prudential Regulation
Authority("PRA")or their predecessor the Financial Services Authority("FSA")may have taken,may have decided
to take,or may have proposed to take, under the Financial Services and Markets Act 2000 or civil penalties which
34
4.2 Research in the U.S.
•
4.2.1 Adverse Public Records
Kroll conducted onsite research for civil litigation, criminal records, liens and judgments in New
York County, New York,57 where InfraRed Capital Partners Ltd58 ("InfraRed")59 is incorporated. Kroll
identified no records naming InfraRed.
4.2.1.1 Bankruptcies, Liens & Judgments
Kroll searched for bankruptcies filed by InfraRed and searched for any tax liens or lawsuit
judgments filed against it. No proceedings were identified.
4.2.1.2 Regulatory Actions and Compliance Databases
Kroll found no regulatory sanctions or litigation, including Securities and Exchange Commission
sanctions or litigation involving InfraRed. Searches of compliance databases that list those
suspected of organized crime, drug trafficking, money laundering, terrorist activities or corruption
found no mention of InfraRed.
the FCA or FSA may have imposed, or may have decided to impose, under the Money Laundering Regulations
2007 in relation to the regulated company or individual and which the FCA, FSA, or, where relevant, the PRA
considers it appropriate to publish.The Financial Services Register does not hold information on action taken by
other enforcement agencies.
57 Kroll searched the New York Supreme Court, Civil Court of the City of New York and Office of the City Register
from January 1, 1996 through May 24,2016 for civil records.Kroll conducted a statewide criminal search with the
Office of Court Administration.
se According to New York Secretary of State records, InfraRed was incorporated in New York on May 9, 2011. It is
currently active and its identification number is 4091391.
sa Kroll also conducted searches for affiliated entities InfraRed Capital Partners (US) LLC and InfraRed 288 LLC.
InfraRed was formerly a part of HSBC Specialist Investments before being bought by management in 2011.At the
client's request, Kroll will perform searches to identify records naming HSBC Specialist Investments.
35
5
.ref
5. ALSTOM TRANSPORT SA / ALSTOM TRANSPORTATION INC.
5.1 Research in France
5.1.1 Identification
According to its website, Alstom Transport SA is a rail freight manufacturing subsidiary of French
publicly listed transport conglomerate Alstom SA. It is headquartered in the Saint-Ouen commune
of the Seine-Saint-Denis department located north of Paris, and has operated in the transport
industry since as early as 1928.60 Alstom Transport SA is one of the world's largest rail freight
manufacturers and rail infrastructure service providers. It maintains 12 sites in France with
approximately 9,000 employees and employs another 31,000 throughout its global operations in
more than 60 jurisdictions.61 Jean-Baptiste Eymeoud is Alstom Transport SA's chairman.
Based in Saint-Ouen, Alstom SA has operated in the transportation industry since 1928. It has
been involved in major global rail and transport projects including France's high speed trains (AGV
and TGV), Eurostar (U.K., France, and Belgium), and,Pendolino (Italy). Throughout its history the
conglomerate expanded into other industries such as power, grid, transmission and shipbuilding.
In November 2015,Alstom SA sold its power and,transmission businesses to General Electric for
—EUR 17 billion (—USD 12.4 billion) and refocused on its original rolling stock manufacturing
operations through global subsidiaries, including Alstom Transport SA.62 Henri Poupart-Lafarge is
the conglomerate's chairman and CEO, Thierry Best is its COO, Marie-Jose Donsion is its SVP of
Finance, and Jean-Baptiste Eymeoud is/SVP of its French operations.63
Alstom Transport SA's annual reports and a proprietary database that compiles corporate
information indicate that in fiscal year 2015, the company recorded approximately $4.11 billion in
revenue, approximately $2.97 billion in gross profit, and approximately $4.91 billion in total
assets.64 According to its website, Alstom SA recorded approximately $7.77 billion in sales and
booked approximately$11.94 billion in orders in fiscal year 2016.65
French Business Tribunal Registry records contain the following details for Alstom Transport SA:
• Date of Registration: November 17, 1992
• Date of Most Recent Update: February 12, 2016
• File Number: 389 191 982
• Status:Active
• Entity Type: Public Limited Company with Appointed Board of Directors
• Registered Address: 48 Rue Albert Dhalenne 93400 Saint Ouen, France
• Social Capital: EUR 343.6 million (—USD 387.05 million)
• 2015 Turnover: —EUR 2.56 billion (—USD 2.89 billion)
• Business Activities: Rolling Stock Manufacturing
• Officers:
60 http://www.alstom.com/france/
61 http://www.alstom.com/about-us/
62 http://www.alstom.com/ge-alstom-transaction/; http://www.lemonde.fr/economie/article/2015/11/02/general-
electric-boucle-l-acquisition-du-pole-energie-d-alstom_4801361_3234.html;http://www.genewsroom.com/press-
releases/ge-completes-acquisition-alstom-power-and-grid-businesses-282159
63 http://www.alstom.com/about-us/Corporate-Governance/management-team/
fi4 http://www.alstom.com/Global/Group/Resources/Documents/Investors%20document/Financial%20results/2015-
16/FY15-16%20Notes%20annexes%20VA.pdf
65 http://www.alstom.com/about-us/
36
o Jean-Baptiste Eymeoud (Chairman, General Manager,Administrator)
o Nathalie Pivet (Administrator)
o Olivier Chantal (Administrator)
o Marc Ehret(Administrator)
5.1.2 Affiliated Entities
Alstom SA's 2016 annual report and archived U.S. regulatory filings indicate that, as of March 31,
2016, Alstom Transport SA is a wholly owned subsidiary of Netherlands-based Alstom Transport
Holdings BV, itself a subsidiary of France-based Alstom Power Holdings SA. The latter entity is
owned by France-based Alstom Holdings SA, a subsidiary of the Alstom SA conglomerate which
comprises more than 260 global companies.66 French Business Tribunal Registry and Dutch
Chamber of Commerce records contain the following details for these affiliated entities:
Entity Name Location File No. Date of Date of Most Main Executive
Registration Recent Update _
Saint Ouen, 389 058 Henri Poupart-Lafarge
Alstom SA France 447 11/17/1992 05/26/2016 (Chairman,General
Manager)
Saint Ouen, 347 951 Maria Donsion(General
Alstom Holdings SA France 238 09/16/1988 01/05/2016 Manager,Administrator)
Alstom Power Holdings SA Saint Ouen, 315 398 04/05/1979 05/03/2016 Jacques Failliot
France 214 (President)
Alstom Transport Holdings BV Rijswijk,
Netherlands 60055545 11/2312005 N/A N/A
_
Euronext Paris filings indicate that, as of February 12, 2016, Alstom SA had the following major
shareholders:67
Entity Name Location Shareholding Percentage
French Government France 20.00%
Bouygues SA France 8.33%
Societe Generale SA France 4.43%
DNCA Investments SA68 France 3.08%
State Street Corporation US 2.87%
Aviva PLC U.K. 2.33%
Schroders PLC U.K. 2.24%
FMR LLC US 1.98%
Amundi SA France 1.96%
GIC Private Limited Singapore 1,81%
Norqes Bank Norway 1.57%
Alstom SA Employees N/A 1.35%
66 http://www.alstom.com/Global/Group/Resources/Documents/Investors%20document/ALSTOM%20DDR2015-
16_U.K._BAT.PDF;https://www.sec.gov/Archives/edgar/data/1062066/000119312503062461/d2Of.htm
67 https://www.euronext.com/en/products/equities/FR0010220475-XPAR/company-information
68 Formerly DNCA Finance SA.
37
5.1.3 Adverse Public Records
5.1.3.1 Labor Issues
Multiple references were found to labor issues at Alstom SA and Alstom Transport SA plants across
France. For example, a February 27, 2003 Le Figaro article reported that a French Labor Court
found Alstom Transport SA guilty of discriminating against unionized employees at its Belfort plant
by offering them "less favorable" raises in comparison to their non-unionized colleagues.69 On May
25, 2011, AFP reported that 5,000 German employees held a strike outside the company's plant in
Salzgitter to protest a"lack of vision and planning"of the plant's operations.70 No additional details
concerning related enforcement proceedings against the company, if any, were found.
On January 18, 2013, French newspaper La Voix du Nord reported that a French court sentenced
a Valenciennes, France-based Alstom Transport SA plant manager to one year in prison after one
of his employees died in a work accident.71 An April 23, 2015 AFP article indicated that hundreds
of Alstom Transport SA employees conducted strikes at six French plants, demanding better raises
than those recently offered by the company's management.72
5.1.3.2 General Electric Acquisition
General Electric's aforementioned acquisition of Alstom SA's power and transmission businesses
in November 2015 was widely reported in French media sources. Media articles additionally noted
that the deal included provisions for the sale of General Electric's railway signaling businesses to
Alstom SA.73 In May 2016, La Tribune and Le Monde:reported that Alstom SA filed a complaint in
an unidentified US court after the companies failed/to reach an agreement on the final value of
GE's railway signaling business, which was originally estimated at EUR 717 million (—USD 800
million). 74 The articles indicated that General Electric filed arbitration proceedings in the
International Chamber of Commerce, to which Alstom SA responded by filing a lawsuit in an
unidentified US court. This matter is ongoing.
5.1.3.3 Operations in Sanctioned Jurisdictions
French media sources reported that Alstom SA and its subsidiaries have operated in several
jurisdictions sanctioned by the US Department of the Treasury's Office of Foreign Assets Control
(OFAC) and international governments, including Iran, Sudan, Cuba, Ukraine, Syria, Yemen, Iraq,
Lebanon, and Myanmar.
On January 29, 2016,AFP reported that Alstom SA signed agreements with the Iranian government
in anticipation of the construction of multiple tramway and metro projects across the country. In
December 2003,AFP reported that the conglomerate signed a€257 million(approximately$289.07
million) contract with the Sudanese government to build a hydroelectric station as part of the
Merowe Dam development project. A June 23, 2014 article in French daily newspaper L'Humanite
noted that by acquiring Alstom SA's energy companies, General Electric exposed itself to risks
created by the French conglomerate's known operations in OFAC-sanctioned Cuba.
On May 2, 2014, French financial newspaper Les Echos published an article discussing challenges
in the European energy sector and referenced Alstom SA's operations in Ukraine, which has been
subject to partial sanctions related to the Russian annexation of Crimea. A December 2, 2013 Les
Echos article indicated that Alstom SA subsidiary Alstom Arabia Power Factory provided electricity
•
69 "Alstom Transport condamne pour discrimination syndicale," Le Figaro, February 27,2003.
70 "Allemagne:5.000 salaries manifestent contre Alstom,"Agence France Presse, May 25,2011.
71 "Un an de prison avec sursis requis contre le directeur du site d'Alstom Petite-Foret, les avocets de l'entreprise
plaident la relaxe,"La Voix du Nord,January 18, 2013.
72 "Nouveaux debrayages chez Alstom Transport pour les salaires,"Agence France Presse,April 23,2015.
70 http://www.lemonde.fr/economie/article/2015/11/02/general-electric-boucle-l-acquisition-du-pole-energie-d-
alstom_4801361_3234.html; http://www.lesechos.fr/01/11/2015/lesechos.fr/021446279601_energie---ge-boucle-
le-rachat--strategique--d-alstom.htm
74 "Etats-Unis : Alstom attaque General Electric.en justice," La Tribune, May 26, 2016; "Alstom poursuit General
Electric en justice,"Le Monde, May 31,2016.
38
to multiple Middle Eastern countries, including OFAC-sanctioned Iraq,Yemen, Syria, and Lebanon.
On May 29, 2013, French financial news website Boursier reported that India-based Alstom T&D
delivered a turnkey electric power station to Power Grid Corporation of India Limited in OFAC-
sanctioned Myanmar.
No references indicating that Alstom Transport SA has violated any sanctions by operating in these
jurisdictions were found in French-language sources.
5.1.3.4 Insolvency
Kroll found no bankruptcy or insolvency proceedings involving Alstom Transport SA as a debtor in
French Business Tribunal Registry records.
5.1.3.5 Litigation75
More than 295 lawsuits involving Alstom SA and its subsidiaries were found in a national index of
select civil judgments, as well as administrative and tribunal decisions in France. These lawsuits
primarily consist of labor and contract issues involving its routine transport industry activities.
Of these lawsuits, 29 cases directly involving Alstom Transport SA and are detailed in the table
below.
' Court Chamber Filing Date Case Type Case Number
Cour d'appel de Pau Chambre sociale 9/11/2008 _ Civil 06/03602
Cour d'appel de Pau Chambre sociale 9/11/2008 _ Civil 07/01533
Cour d'appel de Poitiers Unknown 12/5/2006 Civil CT0193
Cour d'appel de Poitiers Unknown rx 11/14/2006 Civil CT0173
Cour de cassation Chambre sociale 12/2/2015 Civil 14-21.680
Cour de cassation Chambre commerciale 4/8/2015 Civil 13-28.001
Cour de cassation Chambre criminelle 10/30/2013 Criminal 12-81.683
Cour de cassation Chambre Sociale 10/30/2013 Civil 12-21.288
Cour de cassation Chambre commerciale 7/0/2013 Civil 12-15.515.
Cour de cassation Chambre civile 2/27/2013 Civil 12-16.328
Cour de cassation Chambre criminelle 11/3/2011 Criminal 10-87.674
Cour de cassation Chambre sociale 9/22/2011 Civil 09-70.746
Cour de cassation Chambre sociale 12/15/2010 Civil 08-44.956
Cour de cassation Chambre sociale 12/15/2010 Civil 08-44.955
Cour de cassation Chambre sociale 11/10/2010 Civil 09-42.168
Cour de cassation Chambre sociale 3/31/2010 Civil 09-40.739
Cour de cassation Chambre sociale 3/31/2010 Civil 09-40.740
08-43.764;
Cour de cassation Chambre sociale 12/8/2009 Civil
08-43.863
Cour de cassation Chambre civile 2/21/2008 Civil 07-11.505
Cour de cassation Chambre sociale 2/20/2008 Civil 07-40.223
Cour de cassation Chambre sociale 5/16/2007 Civil 06-41.796
75 Due to privacy laws,comprehensive litigation searches are not available in France.Select civil and administrative
judgments are published by the courts,and the names of individuals are often redacted from the records.Criminal
litigation searches are available only through an application submitted by the individual.
39
Court Chamber Filing Date Case Type Case Number
Cour de cassation Chambre sociale 3/20/2007 Civil 04-44.536
Cour de cassation Chambre civile 11/9/2006 Civil 05-15.470
Cour de cassation Chambre sociale 9/20/2006 Civil 05-11.730
Cour de cassation Chambre civile 6/15/2004 Civil 03-30.227
Cour de cassation Chambre civile 6/15/2004 Civil 03-30.220
Cour de cassation Chambre civile 6/15/2004 Civil 03-30.219
Cour de cassation Chambre sociale 5/7/2003 Civil 02-60.052
Conseil d'Etat N/A 10/19/2001 Civil 233173
While most of the above listed cases involved routine labor and contract disputes, the following
noteworthy lawsuits were identified: /
• La Communaute d'agglomeration de Rouen-Elbeuf-Austreberthe v. Eiffaqe construction, et
al., No. 12DA01100 (Cour Administrative d'Appel de Douai, July 23, 2012)76
The plaintiff, a French metropolitan authority now known-as Metropole Rouen Normandie,
sued Alstom Transport SA and six other construction companies involved in the
development of France's Rouen tramway system, seeking —EUR 10.65 million (USD 11.98
million) in damages after defects were discovered in the tramway system. No additional
details concerning these defects were provided. The plaintiff's original claim was rejected
in May 2012; it appealed to the Court Administrative D'Appel de Douai, which upheld the
lower court's ruling on September 17, 20'13 and ordered the plaintiff to pay EUR 1,500
(USD 1,687.20) in court fees to each defendant.
• La Communaute Urbaine de Bordeaux v.Alstom Transport SA, et al., No. 12BX01515(Cour
Administrative d'Appel de Bordeaux, June 15, 2012)77
In March 2012 a French administrative court ordered the Bordeaux Metropolitan Authority
to pay —EUR 3.09 million (USD 3.48 million) to Alstom Transport SA and seven other
companies in exchange for construction, maintenance, and repair services for Bordeaux's
tramway system. No additional details concerning this judgment were provided. In June
2012 the authority appealed to the Court Administrative d'Appel de Bordeaux, which on
March 12, 2013 upheld the original decision and ordered the Bordeaux Metropolitan
Authority to pay each of the defendants EUR 5,000 (—USD 5,624).
• Regie des Transports de Marseille v. Alstom Transport SA, et al., No. 06MA01025 (Cour
Administrative d'Appel de Marseille, April 7, 2006)78
The plaintiff (Marseille Transport Authority) sued Alstom Transport SA and aluminum
company Pechiney SA for—EUR 16.54 million (USD 18.60 million) in damages for repairs
on the Marseille metro system,which the defendants built. No additional details concerning
specific defects or negligence by the defendants were provided. In February 2006 the case
was decided in favor of Alstom Transport SA; the plaintiff appealed to the Cour
Administrative d'Appel de Marseille, which upheld the lower court's judgment on June 9,
2008.
76
https://www.legifrance.gouv.fr/affichJuriAdmin.do?oldAction=rechExpJuriAdmin&idTexte=CETATEXT000027976
006&fastReg1d=1727579846&fastPos=1
77
https://www.legifrance.gouv.fr/affichJuriAdmin.do?oldAction=rechExpJuriAdmin&idTexte=CETATEXT000027173
537&fastRegld=1727579846&fastPos=2
78
https://www.legifrance.gouv.fr/affichJuriAdmin.do?oldAct ion=rechExpJuriAdmin&idTexte=CETATEXT000019278
890&fastRegld=1727579846&fastPos=4
40
5.2 Research in the U.S.
5.2.1 Identification
According to Alstom SA's 2016 annual report, Alstom Transportation Inc. is wholly owned by
Netherlands-based Alstom Transport Holdings BV.79 According to the "Our History" section of the
Alstom USA website, the company has been active in the U.S. since at least 1851 and that the U.S.
Transport business was formed through the acquisition of the American Passenger Rail Car
Company in Hornell, New York.80 A November 2, 2015 Wall Street Journal article reported that
General Electric Co. completed a $13.5 billion acquisition of Alstom SA's power business, after
which Alstom USA focused entirely on its transportation operations.81 Jerome Wallut has been
Alstom Transportation's president since September 2014.82
Online records maintained by the New York Secretary of State report that Alstom Transportation,
Inc. ("Alstom Transportation") was incorporated on September 22, 1986 as,a domestic for profit
business and is currently active.Alstom Transportation's corporation filings also report the following
name history:
Filing Date Entity Name
July 20. 1998 Alstom Transportation Inc.
October 27,1989 GEC Alstom Transportation,Inc.
March 24,1988 Alstom Transportation,Inc.
September 22, 1968 CLRT,Inc.
Kroll did not conduct targeted research using Alstom Transport SA's historical names, but can do
so at the client's request.
5.2.2 Corruption and Bribery Allegations.and Convictions
Kroll identified hundreds of English and French media references to bribery allegations made
against Alstom SA, as well as investigations by various regulatory foreign regulatory authorities,
similar to the aforementioned admissions made in the information filed in U.S.A. v. Alstom SA.
Summarized below are the allegations and investigations in which Alstom SA is cited in over 50
English media sources in the p.st 5 years.
On December 22, 2014, Alstom SA pleaded guilty to foreign bribery charges under the Foreign
Corrupt Practices Act ("FCPA") and agreed to pay a criminal penalty of$772 million, described by
the U.S. Department of Justice ("DOJ") as the largest-ever foreign bribery resolution.83 According
to the information filed in U.S.A. v. Alstom SA84, Alstom SA, various U.S. and foreign based
subsidiaries andexecutive level employees of these entities, paid bribes totalling approximately
$75 million to government officials in Indonesia, Saudi Arabia, Egypt, Taiwan and the Bahamas in
exchange for approximately $4 billion in projects, which resulted in profits of approximately $296
million. The information provided that in some instances, these bribes were concealed through
falsified consulting contracts, and in other instances were paid directly to foreign officials in the
form of gifts, petty cash, hiring of family members and charitable donations to affiliated non-profits.
The judgment filed on November 25, 2015, reported that Alstom pled guilty to one count of
falsification of books, records and accounting and one count of failure to implement adequate
controls.The judge imposed criminal monetary penalties of$790,220,000. On December 22, 2014,
Alstom SA's Swiss subsidiary Alstom Network Schweiz A.G. also pleaded guilty to violating the anti-
79 http://www.alstom.com/Global/Group/Resources/Documents/Investors%20document/ALSTOM%20DDR2015-
16_U.K._BAT.PDF
80 http://www.alstom.com/usa/
81 "GE Completes Alstom Power Acquisition", The Wall Street Journal, November 2, 2015
82 http://www.alstom.com/press-centre/2014/9/jerome-wallut-appointed-president-of-alstom-transportation-inc-/;
https://www.sec.gov/Archives/edg a r/data/1062066/000119312503062461/d 20f.htm
a3 hops://www.justice.gov/opa/pr/alstom-pleads-guilty-and-agrees-pay-772-million-criminal-penalty-resolve-foreign-
bribery
B4 U.S.A.v.Alstom S.A.,case no:3:2014-cr-00246,filed in the U.S.District Court District of Connecticut on December
22,2014
41
bribery provisions of the FCPA.85 Note that neither Alstom Transportation nor Alstom Transport SA
were charged as defendants in these proceedings or named as a co-conspirator in the
aforementioned information.
A February 2,2015 Dow Jones Newswire(French edition)article reported that Alstom SA successfully
petitioned the DOJ to delay the payment of its fine until acquisition proceedings are finalized with
General Electric,which would not be held liable for any portion of the fine.86 According to a May 6,2015
AFP article,Alstom SA recorded approximately$808.73 million in net losses due to"exceptional events"
including the FCPA fine and asset impairments related to its operations in Russia.87 In December 2015,
Intelligence Online (French edition) reported that the DOJ did not follow up on the fine by imposing
monitoring protocols. /
Alstom SA was implicated in the highly publicized corruption investigation of Brazilian state owned
oil company Petrobras, known as Lavo Jato, which commenced on March 17, 2014.88 A February
4, 2015 article published in Industry Week reported that a Brazilian court ordered the freezing of
over $104 million in assets belonging to Alstom SA in connection with the Petrobras corruption
investigation.89 A June 7, 2016 Bloomberg article reported that a former Petrobras executive
informed investigators that Alstom SA paid bribes to secure contracts over a decade ago.90 The
article reported that Alstom SA responded to the allegations via email stating that it is no longer in
the energy business, but did not admit or deny the payment of bribes.
In January 2015 The Economic Times reported that as a result of a six-year bribery investigation,
Alstom Network U.K., and two of its executives;Robert John Hallett ("Hallett") and Graham Denis
Hill ("Hill"), were charged by the U.K. Serious Fraud Office ("SFO") of using corrupt payments to
secure contracts in India, Poland and Tunisia.91 According to the SFO website, in September 2014,
Alstom Network U.K. Ltd was indicted fof paying bribes totalling more than €6 million disguised as
"sham consultancy agreement."92 As part of the investigation, Hill is accused of hiding the payment
of 19,895,000 INR (Indian rupee) as part of a consultancy agreement to Indo European Venture
Pte Ltd.93 Hallett was accused of paying the Delhi Metro Corporation €3.3 million as an incentive
to award contracts to Alstom.94 The trial started in May 2016.95 However, Kroll identified no media
in its preliminary search "..indicate that the trial has reached a conclusion.
On March 29, 2016, Reuters France reported that the SFO found Alstom Transport U.K. & Ireland
director Terence Stuart Watson guilty of corruption linked to the Budapest metro construction project.96
Alstom Transport,SA and Alstom Transportation were not directly referenced in this report.
On June 7, 2016, the Wall Street Journal reported that the SFO charged three high level Alstom
executives with corruption in connection with the supply of trains to the Budapest Metro.97 Jean-
Daniel Laine, former Alstom Vice President, Michael John Anderson, Alstom's business
development director and Terrence Stuart Watson, former country president for the U.K, all face
counts of corruption and conspiracy from 2000 to 2008.98 Mr. Watson's attorney Matthew Cower
"Alstom Sentenced to Pay $772 Million Criminal Fine to Resolve Foreign Bribery Charges," Foreign Affairs,
November 16, 2015.
"Alstom a obtenu un delai pour payer une amende aux USA afin de preserver ses activites," Dow Jones Newswire
(French edition), February 2,2015.
87 "Alstom passe dans le rouge, perte nette annuelle de 719 M EUR,"Agence France Presse, May 6,2015.
8B https://innovationhouserio.wordpress.com/2015/08/28/operacao-lava-jato-update-timeline/
89 http://www.industryweek.com/public-policy/corruption-probe-brazil-leads-freezing-alstoms-assets
90 http://www.bloomberg.com/news/articles/2016-06-07/alstom-ge-accused-of-decade-old-bribes-by-ex-petrobras-
official
91 http://articles.economictimes.indiatimes.com/2015-01-28/news/58546679_1_alstom-network-uk-trial-date-serious-
fraud-office
92 Ibid
93 Ibid
94 Ibid
95 Ibid
98 http://fr.reuters.com/article/businessNews/idFRKCN0WVIZI
97 http://blogs.wsj.com/riskandcompliance/2016/04/05/hearing-set-for-7th-person-charged-in-alstom-probe/
98 Ibid
42
stated that, "Mr. Watson welcomes the opportunity to challenge the SFO's charges in court. [He]
vigorously denies all the charges brought today."99 Kroll identified no media in its preliminary search
to indicate that the trial has reached a conclusion.
Kroll did not conduct targeted media or regulatory research in Brazil, the U.K. or foreign
jurisdictions other than France, but can do so at the client's request.
5.2.3 Criminal Records and Litigation
5.2.3.1 Federal
Kroll searched U.S. Federal Court indices nationwide back to approximately 1990, depending on
the jurisdiction,for civil litigation and criminal proceedings naming Alstom Transportation as a party.
Kroll identified no criminal proceedings naming Alstom Transportation. Kroll identified 19 civil
lawsuits naming Alstom Transportation as a party. Of these cases, Kroll reviewed the four lawsuits
naming Alstom Transportation as a defendant which were filed within the last five years, as well as
a securities lawsuit filed in 2008, which was reported in a Securities and Exchange Commission
("SEC") litigation release. These cases are detailed below:
• Abramskv, et al v. Alstom SA, Alstom Transportation and Alstom U.S.A., Inc., et al, No.
1:2003-cv-06595, filed in the U.S. District Court for the Southern District of New York, on
August 29, 2003.
Excepting the docket, no documents filed in connection with this case are available online.
However, an SEC litigation release reports the following:
/
[The] Plaintiffs, investors in Alstom SA American Depository Receipts
("ADRs"),contend that Defendants engaged in an alleged fraud which entailed
hiding millions of dollars of costs incurred in connection with railcar contracts
performed by ATI, in particular a contract to build Comet V train cars for New
Jersey Transit ("NJT"), which ATI allegedly intentionally underbid in 1999.
These accounting improprieties resulted in an overstatement of income of
[euro] 167 million in Alstom's 2003 accounting statements.
This case was terminated on October 21, 2011, pursuant to court approval a $6.95 million
settlement in favor of the plaintiffs.
• Fernandez v. New England Motor Freight, Inc. and Alstom Transportation, Inc. et al, No.
1:2012-cv-06536, filed in the U.S. District Court for the Southern District of New York, on
August 27, 2012.,
According to the docket, this motor vehicle case was filed by William Fernandez ("the
Plaintiff') against New England Motor Freight Inc., Alstom Transportation Inc. and.Otto
Daniel (;the Defendants").
This case was originally filed in the Supreme Court of the State of New York on July 30,
2012, and subsequently removed to the U.S. District Court for the Southern District of New
York.According to the complaint, the Plaintiff, an employee of Alstom Transportation, was
injured on the job in a motor vehicle accident on December 16, 2009. The Plaintiff alleged
that his injuries resulted from negligence on the part of Otto Daniel, the vehicle's operator,
and Daniel's employer, New England Motor Freight, Inc. The Plaintiff sued the Defendants
for injury, medical expenses and loss of earnings in excess of$75,000.
On May 25, 2016, the parties commenced settlement discussions with the court.According
to the order filed on this date, this case will be dismissed on June 23, 2016, unless one or
more of the parties files a letter with the court requesting that the action not be dismissed.
99 'bid
43
•
• Alfredo J. Balsera, P.A. d/b/a Balsera Communications v. Alstom Transportation, Inc.,
No. 1:2015-cv-20033, filed in the U.S. District Court for the Southern District of Florida, on
January 7, 2015.
According to the docket, this breach of contract lawsuit was filed by Alfredo J. Balsera
doing business as Balsera Communications ("the Plaintiff') against Alstom Transportation
("the Defendant").
This case was originally filed in the Circuit of the Eleventh Judicial Circuit in Miami-Dade
County, Florida on December 16, 2014, and subsequently removed to the U.S. District
Court for the Southern District of Florida. According to the complaint, the Plaintiff rendered
services to Alstom Transportation between February and November 2014, pursuant to an
Advisory Agreement. The Plaintiff sued the Defendant for damages including unpaid fees
of $146,290. This case was dismissed pursuant to a joint stipulation by the parties on
November 19, 2015.
• International Association of Machinists and Aerospace Workers, AEL-CIO, CLC District
Lodge 19, Local Lodge 2741 v. Alstom Transportation, Inc., No. 6:2015-cv-06106, filed
in the U.S. District Court for the Western District of New York, on February 27, 2015.
According to the docket, this labor lawsuit was filed by the International Association of
Machinists and Aerospace Workers Union, AFL-CIO, CLC District Lodge 19, Local Lodge
2741 ("the Plaintiff") against Alstom Transportation ("the Defendant").
r
The complaint stated that on August 30, 2012, the Plaintiff filed a grievance on behalf of
Thomas Giglio ("the Grievant"), "contesting the'failure of the company to recall him after
he had been furloughed from his job as a mechanic at the Hornell facilities on March 1,
2010." The Plaintiff alleged that Alstom Transportation violated the terms of its collective
bargaining agreement when it recalled other mechanics with less seniority than the
Grievant. The Plaintiff brought this action pursuant to a Section 301 of the Labor-
Management Relations Act, seeking to confirm and enforce the final and binding arbitration
award issued on September 17', 2014, in which the arbitrator decided in favor of the
Grievant.
This case was voluntary dismissed with prejudice by the parties on June 22, 2015.
5.2.3.2 State
i
Kroll conducted online civil litigation and criminal records searches in available jurisdictions
nationwide,100 Kroll also conducted onsite research in New York County, New York101 and targeted
online searches/of the New York State Unified Court System for any matters naming Alstom
Transportation that were filed in the last 20 years. Other than those matters described above as
having been removed to Federal Court, Kroll identified 14 state level lawsuits naming Alstom
Transportation as a party, which are reported in a table below. Of these lawsuits, Kroll reviewed
those naming Alstom Transportation as a defendant filed within the last 5 years. Kroll additionally
reviewed one lawsuit naming Alstom Transportation as a plaintiff, which resulted in a judgment
naming the company as a debtor(detailed below in section 5.2.4).
Title Filed Date Docket Number Court Case Type
Scott Yessa v.Owen Vicki and 7/17/2015 2015-L-007317 Cook County Circuit Court Torts/Negligence,Personal
Alstom Transportation Inc.et al (Illinois) Injury,Motor Vehicle
0o Nationwide online searches cover jurisdictions that make their information available in databases. Certain
jurisdictions do not provide their information to these sources.Available information varies from county to county
and state to state.Some jurisdictions only provide information on felonies,and most jurisdictions report convictions
only.
101 Kroll searched for civil,criminal and small claims records at the New York County Superior Court, New York City
Civil Court,and the New York County Clerk's Office from January 1, 1996 through May 29,2016.
44
Title Filed Date Docket Number Court Case Type
Alfredo J BaIsere PA v.Alstom 12/16/2014 2014-031695-CA-01 Miami-Dade 11th Judicial Contract
Transportation Inc. Circuit Court(Florida)
Victor Ano Hernandez and Teoista Queens County Superior
Hernandez v.Alstom Transportation 4/19/2011 0020234/2010 Court(New York) Torts/Negligence
Inc.et al.
Hopkins et al v.Alstom 7/8/2009 0984CV02840 Suffolk County Superior Court Torts/Negligence,Personal
Transportation Inc.et al. (Massachusetts) Injury
Bombardier Inc.and Alstom New York County Civil Court
Transportation et al v.Faiveley 4/9/2008 601041/2008 Contract
(New York)
Transport et al
Clement Amankaa v.New Jersey Philadelphia Court of
Transit and Alstom Transportation 4/13/2005 050401611 Common Pleas Civil
Inc. (Pennsylvania)
Clement Amankaa v.New Jersey
Transit and Alstom Transportation 9/11/2007 2776 EDA 2007 Superior Court of Civil Appeal
Inc.,Appeal of:New Jersey Transit Pennsylvania
Rail Operations,Inc.
John Hall v.New Jersey Transit and Monmouth Superior Court Torts/Negligence,Product
Alstom Transportation Inc. 6/8/2006 L-002613-06 (New Jersey) Liability
Dorinda Tucker v.Alstom Middlesex Superior Court Torts/Negligence,Product
Transportation Inc.
2/17/2006 L-001892-06 (New Jersey) Liability
Joyce Barber v.Alstom 10/25/2005 0031804/2005 Allegany County Superior/ Civil
Transportation Court(New York)
Kevin Patrick Baker v.Alstom 4/18/2005 2005-CA-002968-B District of Columbia Superior Civil
Transportation,Inc. Court
R.A.Environmental Corp.v.Mass.
Electric Construction Company, 3/17/2005 0006040/2001 Bronx County Superior Court Contract
Alstom Signaling Inc.and Alstom '(New York)
Transportation Inc.et al /
Wendy Cooper v.Alstom 7/22/2004 SC-000066-04/HO Hornell City Court Small Claims
Transportation
Tech Tran Corp v.Alstom Burlington Superior Court
11/6/2002 L-003738-02 Contract
Transportation Inc. (New Jersey)
• Alstom Transportation et al. v. Faiveley Transport et al, No. 601041-08, filed in New York
County Supreme Court (New York State)on April 9, 2008.
This action arises from construction contracts to provide the high speed Acela trains
operated by Amtrak on the Northeast Corridor. The amended complaint stated that Amtrak
removed the Acela trains from service in 2005 due to pervasive cracks in the spokes of the
brake disks, resulting in millions of dollars in damages incurred by Amtrak and its
subcontractors. Alstom Transportation, Inc., Bombardier Transit Corporation, Bombardier
Transportation Canada, Inc. and Northeast Corridor Management Services Company, LLC
(collectively"the Plaintiffs")filed this lawsuit seeking to recover $10.7 million in losses and
monetary damages based upon claims assigned to them by Amtrak. The complaint alleged
that the defendants are liable for these losses as successors in interest to SAB WABCO,
the company that designed the defective brake discs, having acquired the company in
2004.
On May 13, 2010, the court issued a judgment for costs to be paid by the plaintiffs. This
case was dismissed with prejudice pursuant to a joint stipulation on November 11, 2010.
• Scott Yessa V. Owen Vicki, Hertz Corporation and Alstom Transportation, No. 2015-L-
007317, filed in Cook County Circuit Court(Illinois) on July 17, 2015.
According to the complaint, Scott Yessa ("Yessa") was driving a motor vehicle on August
1,2013 when he was involved in a collision with co-defendant Vicki Owen ("Owen").Alstom
Transportation and Hertz Corporation were named as co-defendants in their capacities as
owners of the vehicle operated by Owen.Yessa sued the defendants for damages in excess
of$50,000. This case is ongoing as of the writing of this report.
45
• Alfredo J Balsera PA v. Alstom Transportation, No. 2014-031695-CA-01, filed in Miami-
Dade 11th Judicial Circuit Court(Florida) on December 16, 2014.
According to the complaint, Alfredo J. Balsera, P.A. doing business as Blasera
Communications ("the Plaintiff") rendered public affairs and media relations services to
Alstom Transportation between July 2013 and November 2014, pursuant to an agreement
executed between the parties in 2012. The Plaintiff sued Alstom Transportation for unpaid
fees of $146,290. This case was removed to a federal court on January 7, 2015. See
section 5.2.3.2 above for further details of the correspondent federal case.
• Victor Ano Hernandez v. Alstom Transportation, No. 020234/2010, filed in Queens
County Civil Supreme Court (New York State) on April 19, 2011.
Online records maintained by the New York State Unified Court System report that this is
a negligence case, which was disposed on January 21, 2016. No additional information,
including the complaint detailing allegations against Alstom Transportation, is available
online. Kroll can retrieve this case file by conducting onsite research in this jurisdiction at
the client's request.
r
r
5.2.3.3 Bankruptcy
A nationwide online search of U.S. bankruptcy proceedings identified no records naming Alstom
Transportation as a debtor. Kroll identified two bankruptcy filings naming Alstom Transportation as
a creditor, which can be reviewed at the client's request.
5.2.4 Judgments, Liens and UCC Filings
Kroll conducted searches of national databases containing judgments, federal and state tax liens
and Uniform Commercial Codes ("UCC") for records naming Alstom Transportation, as well as
onsite research in New York County, New York.102 Kroll's onsite research identified the following
judgement naming Alstom Transportation as a debtor, which resulted from case No. 601041-08,
Bombardier v. Alstom Transportation et al. reported in section 5.2.3 above.
Debtors: Alstom Transportation Inc. and 11 other debtors
Creditor: Faiveley Transport
Filing Date: May 3, 2010
Filing Number: 002689552-01
Jurisdiction: New York County, New York
Amount: ,' $340.00
Status: Satisfied on unknown date
Kroll also identified the following database records of judgments and liens naming Alstom
Transportation.,Kroll can conduct further research into the below-listed judgments and liens at the
client's request.
Debtor Creditor Nature Date Filed' Filing No. Court/'Office Amount Status
Alstom Employment State Tax Sacramento
Transportation Development Lien 8/7/2015 1675193373 County Clerk Unknown Unknown
Inc. Department Recorder's Office
Alstom State Tax Sacramento Released
Transportation State of California Lien 8/3/2015 201604140486 County Clerk $4,787 8/3/2015
Inc. Recorder's Office
Alstom Philadelphia
Transportation Clement Civil 11/9/2007 050401611 County $90,000 Unknown
Corp. Amankwaa Judgment Prothonotary
702 Kroll searched for judgment and lien records at the New York County Clerk's Office from January 1, 1996 through
May 29, 2016.
46
Debtor Creditor Nature Date Filed Filing,No. Court I Office Amount Status
Alstom NYS
Transportation Commissioner of Judgment 12/21/2005 11916674 New York $4,234 Unknown
Inc. Labor
5.2.5 Patents and Trademarks
Kroll identified no U.S. trademarks currently registered to Alstom Transportation. Kroll identified
the following patents assigned to Alstom Transportation:
Patent De ,
Number Patent Name Inventor Name Granted.
9717307 Oil sample analysis calculator and method of using the Donald W.Bolt
same 3/29/11
I in Paul G.Robbins and Robert J.
6971278 Manual multi-ratio tension-applying 9 device Wright 9/21/12
5.2.6 Regulatory Registrations and Actions
5.2.6.1 Securities Industry Regulatory Actions
Kroll searched for any sanctions or actions by governmental or self-regulatory organizations,
including the Financial Industry Regulatory Authority (or its predecessor the National Association
of Securities Dealers), the New York Stock Exchange, the U.S. Securities and Exchange
Commission, the National Futures Association, and the Commodity Futures Trading Commission.
Other than the FCPA criminal conviction detailed above, Kroll identified no adverse records naming
Alstom Transport SA or Alstom Transportation. However, commercial database searches identified
sanctions placed on Alstom SA by various authorities for its role in a global price-rigging cartel and
its listing as a "scrutinized company" by US institutions such as the California Department of
Insurance, the Iowa Board of Regents, and the Sudan Divestment Task Force, owing to its
operations in OFAC-sanctioned Sudan and Iran.Additional details of these issues involving Alstom
SA can be provided at the client's request.
5.2.6.2 Office of Foreign Assets Control and Watch Lists
Alstom Transportation was not identified on any "watch" lists to which Kroll subscribes. Research
used to obtain this information included a search of both international and national organizations,
including but not limited to the U.S. Department of Treasury's Office of Foreign Assets Control, the
United Kingdom's Financial Conduct Authority, and Interpol, as well as national and international
media sources.
5.2.6.3 United States Tax Court
An online search.of tax petitions filed from 1986 to the present identified no records naming Alstom
Transportation.'
47
APPENDIX ONE — INFRARED CAPITAL PARTNERS LIMITED
5.1 Werner von Guionneau
Von Guionneau has the following current appointments:
Company,name, Status Posjtlon Date oVappolnttnantt
InfraRed Capital Partners Limited Active Director Appointed June 3,1999
InfraRed(Infrastructure)Capital Partners Limited Active Director Appointed March 3,2000
Paternoster Partners Limited Active Director Appointed July 15,2004
Infrastructure Investments General Partner Limited Active Director Appointed January 10,2006
InfraRed NF China Investment Limited Active Director Appointed May 10,2007
Paternoster Irere GP Limited Active Director Appointed November 26,2007
InfraRed Indochina Investments GP Ltd Active Director Appointed February 19,2008
Paternoster IEIF GP Limited Active Director Appointed,February 19,2008
InfraRed Environmental Infrastructure GP Limited Active Director Appointed February 20,2008
InfraRed Infrastructure III General Partner Limited Active Director Appointed February 25,2010
Paternoster IIF III GP Limited Active Director Appointed March 1,2010
InfraRed Capital Partners Management LLP Active Designated Appointed November 17,2010
Member
InfraRed Capital Partners(Holdco)Limited Active Director Appointed November 18,2010
InfraRed Principal Book(GP)Limited Active . Director Appointed January 26,2011
Paternoster IRCP(GP)Limited Active Director Appointed March 10,2011
Paternoster Intermediate(GP)Limited Active Director Appointed April 26,2011
InfraRed Infrastructure Yield General Partner Active Director Appointed June 7,2012
Limited i
InfraRed Infrastructure Yield Holdings Limited Active Director Appointed June 18,2012
InfraRed NF China Investment II Limited Active Director Appointed July 4,2014
48
5.2 Chris Gill
Gill has the following current appointments:
Company name { Status- Date of appointment
InfraRed Environmental Infrastructure GP Active Director I Appointed 21 April 2009
Limited
Infrastructure Investments General Active Director Appointed 21 April 2009
Partner Limited
Infrastructure Investments Holdings Active Director Appointed 21 April 2009
Limited
InfraRed (Infrastructure)Capital Partners Active Director Appointed 8 July 2009
Limited
InfraRed Capital Partners Limited Active Director Appointed 8 July 2009
InfraRed Indochina Investments GP Active Director Appointed 21 July 2009
Limited
InfrarRed Infrastructure III General Active Director Appointed 25 February 2010
Partner Limited
Paternoster IIF III GP Limited Active Director Appointed 1 March 2010
Paternoster IEIF GP Limited Active Director Appointed 15 November 2010
Paternoster Irere GP Limited Active Director , Appointed 15 November 2010
InfraRed Capital Partners (Management) Active Designated Appointed 17 November 2010
LLP Member
InfraRed Capital Partners (Holdco) Active Director Appointed 18 November 2010
Limited
InfraRed Principal Book(GP)Limited Active Director Appointed 26 January 2011
Paternoster IRCP(GP)Ltd ,Active Director Appointed 10 March 2011
Paternoster Intermediate(GP)Limited Active Director Appointed 26 April 2011
Q General Partner Limited Active Director Appointed 2 August 2011
InfraRed UK Retail General 'Partner Active Director Appointed 23 February 2012
Limited
InfraRed UK Retail General Partner 2 Active Director Appointed 27 March 2012
Limited
InfraRed European Active Real Estate Active Director Appointed 18 April 2012
General Partner Limited
InfraRed Infrastructure Yield General Active Director Appointed 7 June 2012
Partner Limited
InfraRed Infrastructure Yield Holdings Active Director Appointed 18 June 2012
Limited
InfraRed NF China Investment II Limited Active Director Appointed 18 September 2012
The Renewables Infrastructure Group Active Director Appointed 12 June 2013
(UK)Limited
Arctic Infrastructure Investments (UK) Active Director Appointed 20 August 2013
Limited
InfraRed UK Lion GP Limited Active Director Appointed 17 December 2013
49
Company. name 1 Status 1 Position 1 Date of appointment
Binigill Limited Active Director Appointed 20 January 2014
European Investments Solar Holdings Active Director Appointed 4 March 2014
Limited
InfraRed UK Tiger GP Limited Active Director Appointed 27 May 2014
European Investments Solar Holdings 2 Active Director Appointed 21 July 2014
Limited
IRAF UK Dragon GP Limited Active Director Appointed 27 January 2015
The Renewables Infrastructure Group Active Director Appointed 28 April 2015
(UK) Investments Limited
Paternoster Partners Limited Active Director Appointed 26 June 2015
IRAF III Limited Active Director Appointed 29 July 2015
IRAF II Limited Active Director Appointed 22 October 2015
5.3 Bryn Jones /
Jones has the following current appointments:
Company-name Status Position t Date of appointment
InfraRed (Infrastructure)Capital Partners Active Director Appointed 4 January 2005
Limited
InfraRed Capital Partners Limited Active Director Appointed 19 January 2010
InfraRed Capital Partners (Management) Active LLP Appointed 30 April 2011
LLP / Member
Arctic Infrastructure Investments (UK) Active' Director Appointed 20 August 2013
Limited
5.4 Christopher Huxtable
Huxtable has the following current appointments:
Company name 1 Status Position Date of appointment
InfraRed Capital Partners Limited Active Director Appointed 3 November 1997
InfraRed Indochina Investments GP Ltd Active Director Appointed 19 February 2008
I
Irere Kingdom 1 Limited Active Director Appointed 2 December 2010
Irere Kingdom 2 Limited Active Director Appointed 2 December 2010
Irere Kingdom Holdings Limited Active Director Appointed 2 December 2010
InfraRed Capital Partners (GP Holdco) Active Director Appointed 10 December 2010
Limited
InfraRed European Active Real Estate Active Director Appointed 10 December 2010
Fund Trustee Limited
InfraRed European Active Real Estate Active Director Appointed 10 December 2010
General Partner Limited
Irere Eagle 1 Limited Active Director Appointed 10 December 2010
Irere Eagle 2 Limited Active Director Appointed 10 December 2010
50
Company name . 1 Status Position Date of appointment" •
Irere Eagle Holdings Limited Active Director Appointed 10 December 2010
Irere SIT 1 Limited Active Director Appointed 10 December 2010
Irere SIT 2 Limited Active Director Appointed 10 December 2010
Irere SIT Holdings Limited Active Director Appointed 10 December 2010
InfraRed Capital Partners (Management) Active Member Appointed 30 April 2011
LLP
Cromwell Land Limited Active Director Appointed 30 April 2011
Nessdale Limited Active Director Appointed 30 April 2011
Q General Partner Limited Active Director Appointed 18 July 2011
InfraRed Principal Book(GP) Limited Active Director Appointed 3 August 2011
InfraRed UK Retail General Partner Active Director Appointed 23 February 2012
Limited
InfraRed UK Retail Nominee 1 Limited Active Director Appointed 23 February 2012
InfraRed UK Retail Nominee 2 Limited Active Director Appointed 23 February 2012
InfraRed UK Retail General Partner 2 Active Director Appointed 27 March 2012
Limited
InfraRed UK Retail Nominee 3 Limited Active Director Appointed 27 March 2012
InfraRed UK Retail Nominee 4 Limited Active Director Appointed 27 March 2012
InfraRed UK Lion GP Limited Active Director' Appointed 17 December 2013
InfraRed UK Lion Nominee 1 Limited Active Director Appointed 17 December 2013
InfraRed UK Lion Nominee 2 Limited Active Director Appointedl7 December 2013
InfraRed UK Tiger GP Limited Active Director Appointed 27 May 2014
InfraRed UK Tiger Nominee 1 Limited Active Director Appointed 27 May 2014
InfraRed UK Tiger Nominee 2 Limited Active Director Appointed 27 May 2014
InfraRed UK Dragon GP Limited Active Director Appointed 27 January 2015
IRAF UK Dragon Nominee 1 Limited Active Director Appointed 27 January 2015
IRAF UK Dragon Nominee 2 Limited Active Director Appointed 27 January 2015
InfraRed Capital Partners (Holdco) Active Director Appointed 20 April 2015
Limited
5.5 James Hall-Smith
Hall-Smith has the following current appointments:
Company name i Status. I Position L I Date of appointment
InfraRed (Infrastructure)Capital Partners Active Director Appointed 4 January 2005
Limited
InfraRed Environmental Infrastructure GP Active Director Appointed 20 February 2008
Limited
Partnerships For Renewables Active Director Appointed 17 March 2008
Construction Holdco Limited
Partnerships For Renewables Active Director Appointed 17 March 2008
Development Company Limited
51
Company name Status Position_ i Date,of appointment '
Partnerships For Renewables Limited Active Director Appointed 17 March 2008
InfraRed Capital Partners Limited Active Director Appointed 6 May 2008
Maesgwyn Investments Limited Active Director Appointed 17 September 2009
Solar Clean Energy Holdings Limited Active Director Appointed 16 March 2011
Solar Clean Energy Intermediate Limited Active Director Appointed 16 March 2011
InfraRed Capital Partners (Management) Active Member Appointed 30 April 2011
LLP
Green Frog Power 214 Limited Active Director Appointed 7 June 2011
Green Frog Power Limited Active Director Appointed 7 June 2011
European Investments(GFP)Limited Active Director Appointed 20 July 2011
European Investments(Moron) 1 Limited Active Director Appointed 20 July 2011
European Investments Moron)2 Limited Active Director Appointed 20 July 2011
European Investments (Olivenza) 1 Active Director Appointed 20 July 2011
Limited
European Investments (Olivenza) 2 Active Director Appointed 20 July 2011
Limited
Partnerships For Renewables CWFL Active Director Appointed 16 November 2012
Holdco Limited
European Investments(GFC)Limited Active Director' Appointed 14 January 2013
European Investments(PAC) Limited Active Director Appointed 3 September 2013
Partnerships For Renewables Asset Active Director Appointed 3 September 2013
Company Holdings Limited
Partnerships For Renewables Asset Active' Director Appointed 3 September 2013
Company Limited
GFP II Limited 'Active Director Appointed 6 February 2015
Adret Limited Active Director Appointed 23 February 2015
Arpasson Limited / Active Director Appointed 23 February 2015
Berangere Limited Active Director Appointed 23 February 2015
GF Energy Limited . Active Director Appointed 23 February 2015
Viridis 178 Limited Active Director Appointed 2 March 2015
InfraRed Infrastructure III General Active Director Appointed 24 March 2015
r
Partner Limited,'
Infrastructure Investments General Active Director Appointed 7 July 2015
Partner Limited
Infrastructure Investments Holdings Active Director Appointed 7 July 2015
Limited
52
5.6 Tony Roper
Roper has the following current appointments:
Company name I Status { Position Date of appointment
InfraRed Capital Partners Limited Active 1 Director Appointed 10 May 2006
Infrastructure Investments General Active Director Appointed 13 September 2006
Partner Limited 1
ICB Securities 1 Limited Active Director Appointed 12 March 2007
ICB Securities 2 Unlimited Active Director Appointed 19 March 2007
Amalie Infrastructure Limited Active Director Appointed 8 August 2007
Amalie PFI (UK)Limited r Active Director Appointed 16 August 2007
Redwood Partnership Ventures Limited Active Director Appointed 9 October 2007
Infrastructure Investments (HSL Zuid) Active Director Appointed 29 February 2008
Limited
Infrastructure Investments Holdings Active Director Appointed 15 May 2008
Limited
InfraRed Infrastructure III General Active Director Appointed 7 October 2010
Partner Limited
HICL Infrastructure Company Limited Active Director .Appointed 25 March 2011
InfraRed Capital Partners (Management) Active LLP Appointed 30 April 2011
LLP Member
Academy Services (Norwich) Holdings Active Director Appointed 1 November 2011
Limited
Academy Services(Norwich)Limited Active Director Appointed 1 November 2011
Academy Services (Oldham) Holdings Active Director Appointed 1 November 2011
Limited
Academy Services(Oldham) Limited Active Director Appointed 1 November 2011
Brentwood Healthcare Partnership Active Director Appointed 1 November 2011
Holding Limited
Brentwood Healthcare Partnership Active Director Appointed 1 November 2011
J
Limited
Hadfield Healthcare Partnerships Holding A• ctive Director Appointed 9 November 2011
Limited
Hadfield Healthcare Partnerships Limited Active Director Appointed 9 November 2011
Blue Light Holdings Limited Active Director Appointed 19 December 2011
CSES(Dorset) Limited A• ctive Director Appointed 19 December 2011
Infrastructure Investments (Portal) GP Active Director Appointed 19 December 2011
Limited
Infrastructure Investments (Portal) Active Director Appointed 19 December 2011
Limited
Infrastructure Investments (Roads) Active Director Appointed 19 December 2011
Limited
New Intermediate Care Limited A• ctive Director Appointed 19 December 2011
53
Company name 1 S• tatus Il Position I Date of appointment
New Schools Investment Company Active , Director Appointed 19 December 2011
Limited
Schools Investment Company (IRL) Active Director Appointed 19 December 2011
Limited
InfraRed Infrastructure Yield General Active Director Appointed 7 June 2012
Partner Limited
InfraRed Infrastructure Yield Holdings A• ctive Director Appointed 18 June 2012
Limited
Central Blackpool PCC Holding Company , Active Director Appointed 4 July 2012
Limited
Central Blackpool PCC Limited A• ctive Director Appointed 4 July 2012
Redwood Partnership Venture 2-Limited Active Director Appointed 31 July 2012
Yorker Holdings PKR Limited Active Director Appointed 13 December 2012
Zealburg Holdings Limited Active Director Appointed 13 December 2012
Infrastructure Investments (Portsmouth) Active Director Appointed 14 March 2013
Limited
HDM Schools Solutions (Holdings) Active Director Appointed 26 March 2013
Limited
HDM Schools Solutions Ltd. A• ctive Directory Appointed 26 March 2013
R B L H Medway Investment Company Active Director Appointed 29 April 2013
Limited
RBLH Limited Active r. Director Appointed 29 April 2013
RBLH RWF Investment Company Limited Active' Director Appointed 29 April 2013
RL Investment Limited Active Director Appointed 29 April 2013
European Healthcare Projects Limited 'Active Director Appointed 24 May 2013
The Renewables Infrastructure Group Active D• irector Appointed 21 June 2013
(UK)Limited
Manchester Housing (MP Equity) Limited Active Director Appointed 27 June 2013
Manchester Housing (MP Subdebt) Active Director Appointed 27 June 2013
Limited
Manchester Housing (MP Topco)Limited A• ctive Director Appointed 27 June 2013
BIue3 (Gloucestershire Fire) (Holdings) Active D• irector Appointed 28 June 2013
Limited
BIue3(Gloucestershire Fire)Limited Active D• irector Appointed 28 June 2013
Infrastructure Investments (Defence) A• ctive D• irector Appointed 24 December 2013
Limited
Road Infrastructure(Ireland) Limited Active Director Appointed 30 January 2014
European Investments Solar Holdings A• ctive Director Appointed 4 March 2014
Limited
European Investments Solar Holdings 2 Active D• irector Appointed 21 July 2014
Limited
54
Company name 13 Status Position 1 Date of appointment
The Renewables Infrastructure Group Active Director Appointed 28 April 2015
(UK) Investments Limited
InfraRed (Infrastructure)Capital Partners Active Director Appointed 11 August 2015
Limited
Infrastructure Investments (A63) Active Director Appointed 6 January 2016
Holdings Limited
Academy Services (Sheffield) Holdings Active Director Appointed 4 February 2016
Limited
Academy Services(Sheffield) Limited Active Director Appointed 4 February 2016
•
J
f
,/
55
MIAMI BEACH MOBILITY PARTNERS
Sacyr Infrastructure USA
• Significant contract disputes reported regarding spiraling cost overruns (appear to exceed $2.5
billion), for the Sacyr consortium's work on the Panama Canal extension project, including
allegations that Sacyr intentionally underbid the project and, in particular, the concrete work for the
project
• Involvement in "Barcenas Affair" corruption scandal in Spain and allegations from the papers of a
PP party treasurer and senator, Luis Barcenas, that the PP Party in Spain kept a parallel bookkeeping
system through Swiss bank accounts and that Sacyr, among others, made undeclared and illegal cash
donations to pay bonuses to senior members of the party
o Sacyr has denied all allegations, including the specific allegations that a Sacyr subsidiary,
Sufi, made a EUR 200,000 payment to Jose Angel Callas, a member of the PP, in exchange
for a government street-cleaning contract in Castilla-La Mancha
• In 2005, media reports indicate that Sacyr's former President was under investigation by the Madrid
public prosecutor, alleging that Sacyr's President was involved in theft of water from a river that was
then sold to local famers and used on urban projects; Sacyr denied participation in the water theft
enterprise
• Kroll lists at least 5 instances in 2016 where Sacyr was involved in litigation in Spanish courts.
Proposal submission disclosures
• Miami Beach Mobility Partners did not make any litigation disclosures for Sacyr Infrastructure USA
URS Energy and Construction/AECOM
• Kroll identified 7 federal lawsuits naming URS Energy and Construction, including a federal
whistleblower complaint filed by a former employee, Walter Tamosaitis, at the Hanford Nuclear Site
in Washington, where URS was a subcontractor under Bechtel. Tamosaitis claims he identified over
100 issues at the nuclear waste treatment site that needed to be addressed, and alleged that his
concerns were ignored so as to not compromise a $6 million milestone payment due to Bechtel
• URS settled the Tamosaitis whistleblower lawsuit for $4.1 million. Tamosaitis later testified before
the U.S. Senate Homeland Subcommittee on Financial and Contracting Oversight, stating his
concerns were later validated by investigations of the Defense Nuclear Facilities Safety Board and
the Department of Energy
• In AECOM's February 2016 SEC 10-Q filing, AECOM reported that the federal government is
conducting an investigation into URS compliance issues at the Hanford Nuclear Site
• In April 2016, it was reported that a leak at one of the Hanford nuclear waste tanks had significantly
worsened. According to the news reports, AECOM was aware of issues with the storage tanks as
early as 2011, but had failed to address any related for nearly a year. The Department of Energy has
stated there is no indication the leaks pose a risk to the public
• Pursuant to the False Claims Act the Department of Justice sought damages and civil penalties
against URS, as well as a refund for all amounts paid under contracts approximating $ 373 million,
for a potential violation of USAID origin and nationality regulations in connection with five
USAIFD-financed projects located in Egypt. URS denied wrongdoing, and settled the case for $9
million in January of 2016 with no admission of liability.
• Kroll reports also include information with respect to at least 1 other whistleblower complaint
against URS re: its participation in the Hanford Nuclear Site
• Kroll reports several complaints alleging workplace discrimination and hostile work environment,
most of which were either dismissed or resolved in favor of URS
• Kroll reports at least 12 state level cases naming URS as a party in the last 5 years
Proposal submission disclosure
• Miami Beach Mobility Partners disclosed 7 cases for URS EC and 14 cases for AECOM
Brookville Equipment Co.
• Kroll identified one federal product liability lawsuit involving the death of Ryan Thatcher, who was
operating a mining locomotive manufactured by Brookville. The estate claimed the locomotive
provided inadequate visibility and was improperly designed in that it lacked a mechanism to prevent
operation when the canopy safety hatch was not full closed. The lawsuit was settled.
• Kroll identified two other product liability actions; one case alleged Brookville negligently
engineered and failed to place sufficient warnings on its locomotives (parties stipulated to a
dismissal); another case alleged the breaks and other safety systems on a Brookville vehicle did not
function and was dismissed with prejudice
Proposal submission disclosures
• Miami Beach Mobility Partners did not disclose any matters for Brookville
John Laing Investments Ltd.
Proposal submission disclosures
• Miami Beach Mobility Partners did not disclose any litigation for John Laing, and the Kroll report
did not identify any notable matters.
June 22, 2016
Miami Beach Mobility Partners
Prepared for: Miami Beach — Office of the City Attorney
pm Kroll ®
Private & Confidential
RESTRICTED USE WARNING
This report was prepared by Kroll at the request of the client to whom it is furnished. The client agrees that
reports and information received from Kroll, including this report, are intended solely for the private and
exclusive use of the client only in connection with a business, investment or other commercial purpose. Any
other use(including for employment purposes,credit evaluation or insurance underwriting purposes)is strictly
forbidden. Any communication, publication, disclosure, dissemination or reproduction of this report or any
portion of its contents shall be subject to prior notice thereof to Kroll. Kroll assumes no direct, indirect or
consequential liability to any third party or any other person who is not the intended addressee of this report
for the information contained herein, its interpretation or applications,or for omissions, or for reliance by any
such third party or other person thereon.To the extent information provided in this report is based on a review
of publicly-available records, such information, as presented, relies upon the accuracy and completeness of
those records,which have not been corroborated by Kroll.Statements herein concerning financial, regulatory
or legal matters should be understood to be general observations based solely on Kroll's experience as risk
consultants and may not be relied upon as financial, regulatory or legal advice,which Kroll is not authorized
to provide. All such matters should be reviewed with appropriately qualified advisors in these areas. THIS
REPORT DOES NOT CONSTITUTE A RECOMMENDATION, ENDORSEMENT, OPINION OR APPROVAL
OF ANY KIND WITH RESPECT TO ANY TRANSACTION,DECISION OR EVALUATION,AND SHOULD NOT
BE RELIED UPON AS SUCH UNDER ANY CIRCUMSTANCES.
2
CONTENTS
1. INTRODUCTION AND METHODOLOGY 5
2. EXECUTIVE SUMMARY 7
2.1.1 John Laing Investments Limited(U.K./U.S.) 7
2.1.2 SACYR Infrastructure USA (Spain/U.S.) 7
2.1.3 URS Energy and Construction(U.S.) 8
2.1.4 Brookville Equipment Co. (U.S.) 9
3. JOHN LAING INVESTMENTS LIMITED 10
3.1 Research in the U.K. 10
3.2 Identification 10
3.2.1 Affiliated Entities 10
3.2.2 Activities 11
3.3 Directors 13
3.4 Ownership 14
3.5 Financials 14
3.5.1 Charges 14
3.6 Media Profile 14
3.6.1 Litigation 15
3.7 International Regulatory and Financial Crimes Watch-Lists 15
3.8 Key Executives 15
3.8.1 Chris Waples 15
3.8.2 Patrick O'Donnell Bourke 17
3.8.3 Derek Potts 18
3.8.4 Carolyn Cattermole 20
3.8.5 Brett Pieterse 21
3.9 Research in the U.S. 23
3.9.1 Identification 23
3.9.2 Adverse Public Records 23
4. SACYR INFRASTRUCTURE USA 25
4.1 Research in Spain 25
4.1.1 Identification 25
4.1.2 Ownership and Corporate Structure 26
4.1.3 Media Profile 27
4.1.4 Adverse Public Records 31
4.2 Research in the U.S. 33
4.2.1 Adverse Public Records 33
5. URS ENERGY AND CONSTRUCTION 35
5.1 Identification 35
5.1.1 Affiliated Entities 36
5.1.2 Hanford Nuclear Site Federal Whistleblower Complaints 36
5.2 Criminal Records and Litigation 40
5.2.1 Federal . 40
5.2.2 State 43
5.2.3 Bankruptcy 44
5.3 Judgments, Liens and UCC Filings 44
- 5.4 Patents and Trademarks 45
5.5 Regulatory Registrations and Actions 46
5.5.1 Occupational Health and Safety Administration 46
5.5.2 Securities Industry Regulatory Actions 47
5.5.3 Office of Foreign Assets Control and Watch Lists 47
5.5.4 United States Tax Court 47
6. BROOKVILLE EQUIPMENT CO. 48
6.1 Identification 48
6.1.1 Affiliated Entities 49
6.2 Criminal Records and Litigation 49
6.2.1 Federal 49
6.2.2 State 51
3
6.2.3 Bankruptcy 53
6.3 Judgments, Liens and UCC Filings 53
6.4 Patents and Trademarks 58
6.5 Regulatory Registrations and Actions 58
6.5.1 Securities Industry Regulatory Actions 58
6.5.2 Office of Foreign Assets Control and Watch Lists 58
6.5.3 United States Tax Court 59
7. APPENDIX ONE—JOHN LAING INVESTMENTS 60
7.1 Investment Subsidiaries 60
7.2 Project Companies 60
7.3 Directors' UK Appointments 61
7.3.1 Chris Waples 61
7.3.2 Patrick O'Donnell Bourke 61
7.3.3 Derek Potts 62
7.3.4 Carolyn Cattermole 62
7.3.5 Brett Pieterse 62
7.4 Former Directors 63
4
11111--
1. INTRODUCTION AND METHODOLOGY
The City of Miami Beach — Office of City Attorney ("the client") has retained Kroll to conduct due
diligence inquiries of the following entities:
• John Laing Investments Limited ("John Laing Investments") — full scope in U.K. and
limited screening inquiries in the U.S.
• SACYR Infrastructure USA ("SACYR") — full scope in Spain and limited screening
inquiries in the U.S.
• URS Energy and Construction ("URS Energy and Construction") —full scope in the U.S.
• Brookville Equipment Co. ("Brookville") —full scope in the U.S.
In the U.S., the objective of the investigation was to identify material legal proceedings, significant
business or personal controversies, corporate governance issues, undisclosed business interests
or any other issues that might reflect on the subjects' reputation, character or credibility. The
investigation included research and analysis of public record sources only, including: civil, criminal
and bankruptcy filings in federal and state court jurisdictions, as well as selected local jurisdictions
where research indicated that the subjects have lived and/or worked; lien, judgment and UCC
indices; regulatory filings; business registrations; U.S. Tax Court filings; local, national and trade
media sources; and the Internet. Kroll's investigation included online database research in
available jurisdictions, as well as targeted onsite field research in jurisdictions known to be affiliated
with the subjects. No reputational source inquiries were conducted.
•
In Spain, the investigation included research and analysis of public record sources, including:
corporate registry information; litigation searches,' including research of judgment records on file
with the Supreme Court,the National Audiences,the Provincial Audiences,and the Superior Courts
of Spain; regulatory searches, including the National Securities Market Commission and the
Ministry of Finance and Public Administration;fraud and anti-money laundering database research;
and a comprehensive Spanish-language media review for any other issues of concern. Kroll notes
that due to Spanish privacy laws, litigation records are not always made publicly-available and as
a result, these searches cannot be considered fully comprehensive.
In U.K., Kroll's research was aimed at identifying adverse findings in materials available in the
public domain, including media archives and online press databases; corporate filings available in
Companies House; litigation and judgements; bankruptcy and insolvency records; and regulatory
filings, including Disqualified Directorship searches, government and financial watch lists, and FCA
disciplinary history (where applicable).
Kroll's online searches cover jurisdictions that make their information available to third parties.
Certain jurisdictions do not provide their information in this way. Information and periods covered
in criminal searches varies from county-to-county and state-to-state. With respect to criminal
records, some jurisdictions only provide information on felonies whereas many jurisdictions report
convictions only.
Kroll notes that these subject companies are significantly large in size and public profile, many with
global operations and multiple subsidiaries. As a result and due to the narrow budget/scope
In Spain, court documents are not a matter of public record and privacy regulations protect individuals'judicial
records.This limits Kroll's ability to find information such as an individual's or company's criminal record or history,
or the current status of litigation. Consulted databases may contain a non-exhaustive number of judgment rulings.
5
•
restrictions for this first phase of the investigation, Kroll's searches were conducted on the main
bidding entity with additional checks to identify issues with (but not necessarily full summaries of)
the parent companies or sibling subsidiaries. While general international media searches were
conducted, more focused public records searches were only conducted in the jurisdictions noted
above. Further, this first phase relied heavily on readily available media profiles and did not include
the retrieval or review of all available primary source materials.Additional research in subsequent
phases and as requested by the client can be conducted into any concerns included in this report.
The information contained in this report is based upon a review of publicly-available records. As
such, the information presented relies upon the accuracy of those records, which has not been
corroborated by Kroll.
6
2. EXECUTIVE SUMMARY
2.1.1 John Laing Investments Limited (U.K. / U.S.)
John Laing Investments is the investment arm of John Laing Group plc, an established and
prominent construction and infrastructure company that is listed on the London Stock Exchange.
John Laing Investments executes investments and acts as operator and manager of infrastructure
assets on behalf of John Laing Group plc. John Laing Investments primarily invests in so-called
Public Private Partnership projects and renewable energy infrastructure companies, with a
particular focus on wind, solar, and biomass power generation.
Neither John Laing Investments Limited nor any of the subjects was found to have been the focus
of direct adverse press comment. However, One of the Public Private Partnerships in which John
Laing Investments has been involved has generated adverse comment, as detailed further below.
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for John Laing Investments or the members of the executive team researched for this report,
nor are the subjects mentioned in searchable online litigation databases. There are, however,
certain limitations in UK litigation records, as noted in the report.
None of the executives are included in the Individual Insolvency Register for England and Wales
ore mentioned in the historical archive of the London Gazette,which publishes bankruptcy notices.
Searches of various U.S. and international regulatory oversight agencies, which maintain
databases containing information on companies and individuals subject to various government
sanctions, did not identify any references to John Laing Investments.
John Laing Investments Ltd. operates in the United States under the name "John Laing (USA) Ltd."
Kroll conducted nationwide research for federal civil litigation and criminal proceedings filed within
the last 20 years and did not identify any records naming the subject. At the state level, Kroll
conducted nationwide online searches as well as onsite research in New York County, New York
for litigation naming John Laing Investments. Kroll did not identify any records naming the subject.
Kroll identified one New York State tax lien naming the subject for$1,482 that was filed in 2011. It
has since been released. John Laing Investments was not identified in any international "watch"
lists to which Kroll subscribes.
2.1.2 SACYR Infrastructure USA (Spain / U.S.)
Sacyr Infrastructure USA LLC is part of the Sacyr Group, formerly known as Sacyr Vallehermoso,
a Spain-based diversified group of entities engaged in construction, property development,
concessions and services.
•
Kroll conducted Spanish-language media research for news articles, press releases and other
reports involving Sacyr and identified thousands of media references to the company and its
affiliated entities, primarily in the form of news reports on Sacyr's projects, legal disputes and
partnerships with other firms. The bulk of the information identified was media reports in relation
to transactions and contracts which occur in the normal course of business; however, Kroll's
investigation identified several allegations in the press of environmental crime,fiscal evasion, stock
manipulation and corruption which implicated Sacyr in Spain and its then-President, Luis Del
Rivero.
7
Kroll's regulatory searches identified two references to actions taken by regulatory bodies against
the parent company:
The first instance relates to claims by the French regulator, the Autorite des Marches Financiers
("AMF"), that Sacyr violated stock market rules prior to its EUR 6.5 billion bid to win control of
Eiffage. In March 2010, the AMF disciplined Sacyr and fined it EUR 300,000 for concealing the fact
that its ownership of Eiffage capital had crossed a disclosure threshold.
The second regulatory action relates to the company's operations in Chile through its subsidiary,
Sacyr Chile, S.A. The company was sued along with 14 other entities by Chile's Production
Development Corporation ("Corfo") for "damages caused by the irregular removal of financial
instruments" from Inverlink Corredores de Boise S.A. The companies were collectively ordered to
pay Corfo CHP 33,151,103,037 (USD 48,238,501); of the total amount, Constructora ACS-Sacyr
Chile S.A. was ordered to pay CHP 8,194,805,500 (USD 11,924,343).
Kroll searched for adverse public records, litigation,criminal records, bankruptcy filings,judgments,
liens, Uniform Commercial Code filings, media and regulatory actions naming SACYR
Infrastructure USA in the United States. Kroll identified no records naming the subject in the United
States.
Kroll also performed searches of compliance databases that list those suspected of organized
crime, drug trafficking, money laundering, terrorist activities or corruption. Kroll identified no
adverse records naming SACYR Infrastructure USA in the United States.
2.1.3 URS Energy and Construction (U.S.)
URS Energy and Construction is a provider of engineering, construction and technical services,
and is incorporated in Ohio with a location in Idaho. URS Energy and Construction is a subsidiary
of Aecom Technology Corporation.
Kroll identified seven federal lawsuits naming URS Energy Construction as a party, with the
exception of the two whistleblower complaints described below, all of the lawsuits were within the
normal course of business. Kroll identified over 400 lawsuits naming the company by its former
name,Washington Group International; approximately 26 of these suits were filed by the company,
and approximately 244 named the company as defendant. Kroll reviewed the 13 cases filed within
the past five years which name the company as defendant.
Kroll identified two federal whistleblower complaints against URS Energy and Construction in its
capacity as a subcontractor at the Hanford Nuclear Waste Treatment Plant. In November 2011, Dr.
Walter Tamosaitis filed a complaint alleging that the company fired him after he repeatedly brought
up numerous safety violations occurring at Hanford. In August 2015, the case was settled in the
plaintiff's favor for approximately $4 million. Donna Busche, the plant's former Manager of
Environmental and Nuclear Safety, filed a similar complaint in February 2013, alleging that she
had been discriminated against at URS Energy and Construction for disclosing a number of safety
issues. Busche was fired from her position at the company in February 2014. In March 2014, she
dismissed her case in order to file a new claim with the Department of Labor.According to a 2016
Aecom SEC filing, the company is under investigation by the federal government regarding
contractual compliance and various technical issues in the design, development and construction
of the Hanford Nuclear Waste Treatment Plant.
Kroll identified 12 state level lawsuits naming URS Energy and Construction, all of which were filed
in the normal course of business. Kroll identified 11 judgments and liens naming URS Energy and
Construction as debtor. URS Energy and Construction was the subject of four OSHA inspections
which contained violations. Two of these violations did not result in penalties.
URS Energy and Construction was not identified in any international "watch" lists to which Kroll
subscribes.
8
•
2.1.4 Brookville Equipment Co. (U.S.)
Kroll searched for adverse public records, litigation,criminal records, bankruptcy filings,judgments,
liens, Uniform Commercial Code filings,media and regulatory actions naming Brookville Equipment
Co. Kroll also performed searches of compliance databases that list those suspected of organized
crime, drug trafficking, money laundering, terrorist activities or corruption.
Kroll identified three federal level lawsuits naming Brookville or its affiliates:
• Brookville was named as a plaintiff in a flood insurance contract lawsuit related to a denial
of coverage filed on June 11, 1997. The court found that Brookville failed to submit a timely
claim and dismissed the case. Brookville appealed, and, on appeal, Brookville and the
insurance company filed a stipulation to dismiss and the case was dismissed.
• In May 2012, Brookville was named as a defendant in a product liability lawsuit.According
to the lawsuit, a mine worker was injured and killed in an accident while operating a
Brookville mining locomotive and standing with his head outside the locomotive's hatch.
The worker's estate alleged that the locomotive had been designed negligently. Brookville
subsequently settled the case.
• Brookville filed a patent lawsuit on January 11, 2013. The case was resolved through
mediation and Brookville and the defendant, locomotive company A. L. Lee Corporation,
filed a confidential settlement agreement.
Brookville was named in an administrative settlement filed on July 30, 2015 with the Environmental
Protection Agency. The settlement stated that Brookville manufactured and shipped locomotives
without receiving approval that they conformed to emissions standards, as required by law.
Brookville agreed to pay a penalty of$202,000.
Kroll identified four state level lawsuits naming Brookville:
• A workmen's compensation lawsuit and negligence lawsuit filed on May 24, 2006 and
January 8, 2007, both naming Brookville as a defendant, pertained to alleged injuries that
mine workers sustained while working with Brookville mining locomotives. Both cases were
resolved in a stipulation'of dismissal.
• On February 23, 2011, Brookville was named as a defendant in a dispute over a contract
that it had been awarded to build commuter locomotives for the South Florida Regional
Transportation Authority. The plaintiff, a losing bidder, alleged that the South Florida
Regional Transportation Authority had unfairly favored Brookville.The case attracted some
negative press, as Florida state lawmakers criticized the decision.The case was voluntarily
dismissed by the plaintiff.
• On June 20, 2012, Brookville filed a lawsuit against the City of Cincinnati to block the
release of an un-redacted version of its bid to provide commuter locomotives to the city.
Brookville cited concerns about making public their trade secrets contained within the bid.
The court refused to block the release of the un-redacted documents.
Kroll identified one judgment and two tax liens naming Brookville Equipment Co., filed between
2007 and 2010. One of the tax liens,filed on August 13, 2007, was for$164,827.50 and no release
information was identified. The second tax lien, filed on May 28, 2010, was for $6,389. It was
released on an unstated date.
Kroll identified 54 Uniform Commercial Code filings naming Brookville Equipment Co., filed
between 1984 and 2016.
9
3. JOHN LAING INVESTMENTS LIMITED
3.1 Research in the U.K.
3.2 Identification
John Laing Investments Limited was incorporated on November 7, 1963 as John Laing (Overseas)
Limited. Its name was changed to John Laing Holdings Limited in 1988, to John Laing Investments
Limited in 1997, to Laing Investments Limited in 2000 and to its current name on August 14, 2007.
Its registered address is 1 Kingsway, London WC2B 6AN.2
John Laing Investments is part of the John Laing Group, which has its origins in the housebuilding
business founded by James Laing in 1846 and later expanded by his son John Laing. Regarded
as the "flagship" of the UK construction sector, the firm worked on prestigious projects including
Britain's first motorway(the M1) and the Millennium Dome.
However,costly overruns on some construction projects including the Millennium Stadium in Cardiff
caused heavy losses and, in 2001, John Laing sold its construction division for£1. It then divested
its housebuilding, property development, plant hire and retirement home businesses to focus on
infrastructure investment through Laing Investments as it was then known.3
The infrastructure investment business was boosted in March 2003, when Laing Investments
bought eight projects from Amey plc.4
John Laing Investments participated in the UK's private finance initiative programme ("PFI") from
the start before expanding into overseas markets.
3.2.1 Affiliated Entities
John Laing Investments lists 16 wholly-owned investment entity subsidiaries in its 2014 annual
report.
The 2014 annual report lists ten UK investment companies and six overseas investment companies,
in the Netherlands and US. It also lists 32 UK project companies and 13 overseas project
companies in Europe, the US and Australasia.
A list of investment entities and project companies is provided in Appendix One.
John Laing Investments owns 6.98 per cent of John Laing Environmental Assets Group Limited
("JLEN"), an environmental infrastructure projects fund which is incorporated in Guernsey and
listed on the main market of the London Stock Exchange. It was originally a cornerstone investor,
subscribing to 39.7 per cent of the JLEN IPO in 2014.5
2 According to UK Companies House research.
3 Financial Times, May 15,2015.
4 Western Morning News(Plymouth), March 18,2003.
5 http://www.4-traders.com/JOHN-LAING-ENVIRONMENTAL-16113730/company/
10
3.2.2 Activities
John Laing Investments is a specialist investor, as well as operator and manager of infrastructure
assets on behalf of its ultimate parent, John Laing Group plc.
It primarily invests in Public Private Partnership ("PPP") projects and renewable energy
infrastructure companies with a focus on onshore windfarms, solar PV parks and biomass plant.
The sectors in which it has invested include: criminal justice, defence, education, emergency
services, healthcare, leisure, office accommodation, rail, regeneration, renewable energy, waste
treatment, roads and bridges, street lighting and highway maintenance and telecoms and utilities.8
John Laing Investments operates in three main geographical regions: Europe (including the UK),
North America (Canada and US) and Asia Pacific (Australia and New Zealand). As of December
31, 2014, it had 26 UK projects and 14 overseas projects in its investment portfolio.
According to its 2015 annual report, as of December 31, 2015, John Laing Group held 39
investments in infrastructure projects in 11 countries, with a book value of£825 million.
3.2.2.1 Recent Newsworthy Developments
• John Laing Investments is in partnership with Hitachi Rail Europe in Agility Trains,which
will provide the super express train service on two phases of the UK Intercity Express
Programme: Agility Trains West owned by Hitachi Rail Europe (70 per cent), John Laing
Investments (24 per cent) and MetLife Private Capital Investors (6 per cent); and Agility
Trains East owned by Hitachi Rail Europe (70 per cent) and John Laing Investments (30
per cent).'The contracts were awarded in 2012 and the first trains will go into service in
December 2017.8
• John Laing Investments partnered with Skanska Infrastructure Development as an equity
member in the 1-4 Mobility Partners consortium to win the US$2.3 billion "1-4 Ultimate"
project to rebuild a 21-mile stretch of Interstate 4 ("1-4") in Central Florida. They broke
ground on the seven year project last year.9
• In October 2015, John Laing Investments Limited committed £27 million towards the £137
million total cost of a new 27.7MW biomass combined heat and power plant at Cramlington
in Northumberland. UK Green Investment Bank plc invested £23 million and Barclays
provided the rest of the funding as debt.10
• John Laing bought Glencarbry Windfarm in County Tipperary, Ireland from Ecopower
Limited in June 2015.11 In January 2016, John Laing Investments awarded a contract to
Nordex to install and service 35MW(12 turbines) at the wind farm.12
• In early 2016, John Laing Investments concluded framework agreements with the German
wind farm developer WKN AG to acquire 50MW of wind energy projects in France and
40MW in Poland, subject to building and operational approval.WKN will construct the wind
farms as a contractor to John Laing.13
6 http://www.laing.com/what-we-do/project_portfolio/by-sector.html
http://www.agilitytrains.com/about-us
6 New Civil Engineer, March 30, 2015.
9 Florida Trend,October 2015.
10 Worldwide Energy, October 2015.
11 http://www.laing.com/project_portfolio/116/131/glencarbry-wind-farm.html
12 http://www.energybusinesseurope.com/2016/01/14/nordex-nabs-35mw-in-ireland/
13 AWP OTS, February 5, 2016.
11
3.2.2.2 Outstanding Bids
• In July 2015, Front Range Mobility Group was one of four firms selected by the Colorado
Department of Transportation to bid on the 1-70 East road improvement project. The equity
members of Front Range Mobility Group are Hochtief PPP Solutions North America Inc.,
ACS Infrastructure Development Inc., Aecom Capital Inc. and John Laing Investments
Limited.14 The successful bidder will be announced in spring 2017.15
• John Laing Investments is a member of Maryland Transit Connectors, one of four bidders
for the US $2 billion project to build and operate the Purple Line rail system between
Bethesda in Montgomery County and New Carrollton in Prince.George's County. InfraRed
Capital Partners is part of a rival consortium — Maryland Purple Line Partners. As of
December 2015, the state had not yet committed to using a public-private partnership to
develop the project but was seeking proposals.16
• John Laing Investments is part of Legacy Link Partners, one of three bidders shortlisted in
January 2016 by the Windsor-Detroit Bridge Authority for the Gordie Howe International
Bridge project linking the US and Canada.17
• John Laing Investments is part of Northlink, one of three shortlisted bidders for the Puhoi
to Warkworth motorway project in New Zealand. The other members of the consortium are
Cintra Developments Australia, InfraRed Infrastructure III General Partner, Ferrovial
Agroman, and Fulton Hogan. The contract is expected to be awarded in October 2016.18
• John Laing Investments is part of the Combination Eemhoek consortium, one of three
bidders shortlisted by the Dutch waterways agency Rijkswaterstaat for a€200-€250 million
project to develop sections of the A-27 and Al roads. The other members of Combination
Eemhoek are Dura Vermeer, Besix Group and Rebel.19
• In March 2016, the Parkway-6 consortium, of which John Laing Investments is a member,
was named as the preferred bidder for the A6 road upgrade project in the Netherlands.
They were bidding on a €300 million design, construction, finance and maintenance
concession contract under a public-private partnership.20 It was announced on 8 June 2016
that Parkway-6, comprising Dura Vermeer, BESIX, Rebel Valley and John Laing
Investments, has won the project. The European Investment Bank is contributing almost
€80 million.21
• In partnership with Aecom Capital,John Laing Investments is one of four shortlisted bidders
for a US$1.8 billion design, finance, construction, operation and maintenance concession
contract to widen a 12-mile stretch of Interstate 70 in Denver. However, environmental and
civic groups have filed a lawsuit against the federal Environmental Protection Agency and
director Gina McCarthy over revisions to the Clean Air Act which made the project eligible
for federal funding. The state is expected to choose a private partner in autumn.22
14 http://www.frontrangemobilitygroup.com/en/our-team
15 hops://www.codot.gov/programs/high-performance-transportation-enterprise-hpte/projects/i-70/i-70-east-1/i-70-
. east-documents/projectschedule.pdf
16 Infrastructure Investor, December 16,2015.
17 http://www.bridgeweb.com/Three-teams-shortlisted-for-US-Canada-bridge/3870
1B http://contractormag.co.nz/contractor/ara-tuhono-puhoi-to-warkworth/
19 Business Monitor Online,January 13, 2016.
20 Business Monitor Online, March 29, 2016.
21 https://ec.europa.eu/commission/2014-2019/katainen/announcements/investment-plan-europe,-financial-close-
widening-a6-motorway-netherlands_en
22 The Bond Buyer, March 22, 2016.
12
3.2.2.3 Unsuccessful Bids
• John Laing Investments was a member of the TransForm consortium, which failed to win
the operations, trains and systems contract for the North West Rail Link automated metro
in Sydney,Australia in 2014.23
• In 2014, the SecurePathways consortium, which included John Laing Investments,
unsuccessfully bid for the $420 million contract to construct the new Ravenhall Prison in
Melbourne,Australia.24
• Also in 2014, John Laing Investments lost out on a license to become the offshore
transmission operator at the West of Duddon Sands project off the Cumbrian coast. Ofgem
awarded the £296 million contract to the Blue Transmission consortium.25
• John Laing Investments was part of the Commonwealth Bridge Partners consortium which
unsuccessfully bid for the Pennsylvania US$899 million Rapid Bridge Replacement project
in 2014. Keystone Bridge Partners, which included InfraRed Capital Partners, was also
unsuccessful.26
• John Laing Investments was one of the members of the Astrela consortium which bid for
the construction, financing, operations and maintenance concession contract on the
Bratislava ring road D4-RZ project — one of the largest PPP infrastructure projects in
Central Europe. The other consortium members were Strabag of Austria, Reding
Infrastructure and Strabag Motorway.27 The Obchvat Nula consortium won the contract.28
3.2.2.4 Divestments
• In March 2014, John Laing Investment sold all its shares in John Laing Infrastructure Fund
Limited for a net consideration of£38.9 million.29
• In November 2015, John Laing Investments and John Laing Investments Mauritius (No. 1)
sold their 11.9 per cent stake in Dhule Palesner Tollway in India to Sadbhav Infrastructure
Project.30
3.3 Directors
John Laing Investments has the following current directors:
Name Date of Appointment
Derek Potts August 3,2001
Christopher Brian Waples September 1,2007
•
Patrick Francis John O'Donnell Bourke August 17,2011
Brett Johannes Theodorus Pieterse November 4,2011
Carolyn Tracy Cattermole secretary since September 27,2012,director since August 16,2013
Philip Naylor September 4,2015
The company's former directors are listed in Appendix One.
23 Tenderslnfo,June 25,2014.
24 Financial Services Monitor Worldwide,September 16, 2014.
25 Tenderslnfo,July 14,2014.
26 Infrastructure Investor,October 27,2014.
27 SME, November 13,2015.
28
http://www.infrastructure.porr.pl/index.php?id=6153&L=1&tx_ttnews%5Btt_news%5D=4439&cHash=bf76c5fd282
e7d34f3adebe44f48a39a
29 John Laing Investments Limited 2014 Accounts
3° Pivotal Sources, November 2, 2015.
13
3.4 Ownership
In April 2015, the issued share capital of John Laing Investments was reduced through a special
resolution from £30,000,000 to £10,000. John Laing Limited owns the company's 10,000 £1
ordinary shares. Its ultimate parent is John Laing Group plc.
3.5 Financials •
In the financial year ended December 31, 2014, John Laing Investments made a group operating
profit of £158.2 million on income of £176.2 million compared with an operating profit of £142.8
million on income of £215.7 million the previous year. At December 31, 2014, it had total group
assets of 895.9 million and net assets of£686.9 million compared with total assets of£722.5 million
and net assets of£579.4 million a year earlier.
3.5.1 Charges
The following outstanding charges are registered against John Laing Investments:
• A deed of pledge of shares in the capital of Speyside Renewable Energy Partnership Hold
Co Limited in favor of BNY Mellon Corporate Trustee Services Limited (as security trustee)
created on August 27, 2014.
• A security agreement over loan notes in favor of BNY Mellon Corporate Trustee Services
Limited (as security trustee) created on August 28, 2014.
• A charge over accounts between Agility Trains West Limited (borrower) and John Laing
Investments Limited (charging company) and The Bank of Tokyo-Mitsubishi UFJ Ltd
(account bank) and BTMU (Europe) Limited (security trustee) created on July 7, 2015.
• A security agreement over loan notes in favor of Barclays Bank plc created on September
17, 2015.
3.6 Media Profile
John Laing Investments' media profile is mostly derived from its membership of various consortia
and the bids they have made on infrastructure projects, as described in the sections above.
Ongoing contracts are often referred to as simply "John Laing projects" rather than John Laing
Investments.
Kroll identified the following issue concerning a contract in which John Laing has been involved:
John Laing Investments is part of the Octagon Healthcare consortium, which won the contract for
the design, construction, finance and part operation of Norfolk and Norwich University hospital.
The other consortium members are 3i plc, Barclays UK Infrastructure Fund, Innisfree PFI Fund and
Serco Investments.31
Work began in 1998 and the main construction phase finished in 2001.The building cost was£159
million but the National Health Service Trust which runs it has to pay£832 million rent per annum
up to 2037. In 2003, the hospital's borrowing was geared up from £200 million to £308, generating
refinancing gains of £116 million. £82 million went to the consortium, increasing their return on
investment from under 20 per cent to 60 per cent. A report by the Commons Public Accounts
Committee in 2006 concluded that the consortium had "bamboozled" inexperienced executives at
the .NHS Trust and declared it to be the "unacceptable face of capitalism".32 In 2009, Dr Chris
31 http://www.nnuh.nhs.uk/departments/serco/
32 http://www.thisismoney.co.uk/money/news/article-1598435/Barclays-in-NHS-rip-off-scandal.html
14
Edwards of the University of East Anglia estimated that the NHS Trust would save£217 million if it
bought itself out of the contract.33
3.6.1 Litigation
3.6.1.1 Register of Judgments, Orders and Fines for England & Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for John Laing Investments.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier.
3.6.1.2 UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of John Laing
Investments as having been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
3.7 International Regulatory and Financial Crimes Watch-Lists
Searches of various U.S. and international regulatory oversight agencies, which maintain
databases containing information on companies and individuals subject to various government
sanctions, did not identify any conclusive references to John Laing Investments.
Databases checked include, but are not limited to: the Bank of England, the UK Financial Conduct
Authority,the United Nations Security Council Committee,the U.S. Federal Bureau of Investigation,
the U.S. Securities and Exchange Commission, or the U.S. Treasury's Office of Foreign Assets
Control.A full list of databases can be supplied on request.
It should be noted that current investigations are not a matter of public record and would not be
revealed in the searches conducted by Kroll.
3.8 Key Executives
3.8.1 Chris Waples
3.8.1.1 Background
Christopher Brian Waples ("Waples")was born on January 31, 1959 and is British, according to UK
corporate records.
33 Guardian,June 1, 2009. •
15
Waples joined John Laing Group in 2007 as operations director. He is now the group managing
director for asset management and chair of the investment committee.A member of the executive
team, he is also the director responsible for IT and health and safety within the group as well as
being a trustee of the John Laing Charitable Trust.34 He is a member of education leadership team
of Business in the Community, whose president is Prince Charles.35
He previously worked for Blue Circle plc, Scottish Power plc and Amey plc, where he was the
director in charge of public and private sector facilities management.36
The following addresses have been identified as being linked to Waples:
• Clovermead, Lyons Road, Slinfold, Horsham, West Sussex RH13 OQS (2007 to 2014)
• 1 Knights Acre, Station Road, Billingshurst, West Sussex, RH14 9RE (1995 to 2006)
• The Hollies, Ford, Salisbury, Wiltshire SP4 6DH (1994)
3.8.1.2 Corporate Affiliations
United Kingdom
Waples has nine current UK appointments37, all of which are with companies in the John Laing
Group or joint ventures.
A list of his current appointments is provided in Appendix One.
He is believed to have 49 previous UK appointments.38
3.8.1.3 Adverse Media Search
Searches of press archives have identified no significant red flags concerning Waples. He has a
low media profile.
Litigation, Insolvency and Bankruptcy
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for Waples at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Waples as having
been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
16
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Waples is not included in the Individual Insolvency Register for England and Wales. The Individual
Insolvency Register contains details of bankruptcies that are current or have ended in the last three
months;debt relief orders that are current or have ended in the last three months; current individual
voluntary arrangements and fast-track voluntary arrangements, including those that have ended in
the last three months; current bankruptcy restrictions orders or undertakings and interim
bankruptcy restrictions orders; current debt relief restrictions orders or undertakings and interim
debt relief restrictions orders. It should however be noted that, should an individual pay off their
debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Waples.
3.8.2 Patrick O'Donnell Bourke
3.8.2.1 Background
Patrick Francis John O'Donnell Bourke ("O'Donnell Bourke")39 was born on March 22, 1957 and is
British, according to UK corporate records.
He has been the group finance director of John Laing Group since 2011.
After qualifying as a chartered accountant with Peat Marwick, he spent nine years in investment
banking, with Hill Samuel and Barclays de Zoete Wedd. He worked for Powergen from 1995 to
2000 in M&A and then as group treasurer. He joined the Northern Ireland-based energy group
Viridian plc in 2000 as group finance director and was appointed group chief executive in 2007.
He has been a non-executive director of Affinity Water Limited since 2013.
The following addresses have been identified as being linked to O'Donnell Bourke:
• Sherenden, Curtisden Green, Goudhurst, Kent TN17 1LJ (2007 to 2014)
• 4 Ladbroke Mews, London W11 4JT(1992 to 1998 and 2007)
• Oranmore, 43 Station Road, Graigavad, County Down, Northern Ireland BT18 OBP (2004
to 2006)
• 23 Cultra Avenue, Holywood, County Down BT18 OAZ
3.8.2.2 Corporate Affiliations
United Kingdom
O'Donnell Bourke has eight current UK appointments40, seven of which are with John Laing Group
companies. He is also a non-executive director of Affinity Water Limited.
A list of his current appointments is provided in Appendix One.
He has 19 previous UK appointments.
17
3.8.2.3 Adverse Media Search
Searches of press archives have identified no significant red flags concerning O'Donnell Bourke.
He has a fairly low media profile, mainly connected with his previous role as chief executive of
Viridian Group.
3.8.2.4 Litigation, Insolvency and Bankruptcy
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for O'Donnell Bourke at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with'a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of O'Donnell Bourke
as having been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court,it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
O'Donnell Bourke is not included in the Individual Insolvency Register for England and Wales. The
Individual Insolvency Register contains details of bankruptcies that are current or have ended in
the last three months; debt relief orders that are current or have ended in the last three months;
current individual voluntary arrangements and fast-track voluntary arrangements, including those
that have ended in the last three months; current bankruptcy restrictions orders or undertakings
and interim bankruptcy restrictions orders; current debt relief restrictions orders or undertakings
and interim debt relief restrictions orders. It should however be noted that, should an individual pay
off their debts, their name would be removed from the Register.
He is not included in the Northern Ireland Individual Voluntary Arrangement Register."
Searches of the historical archive of the London Gazette and Belfast Gazette, which publish
bankruptcy notices, revealed no references to O'Donnell Bourke.
3.8.3 Derek Potts
3.8.3.1 Background
Derek Potts ("Potts") was born on October 20, 1958 and is British, according to UK corporate
records.
Potts joined John Laing Group in 2001. Following roles as director of Laing Investments, managing
director of Laing Roads, managing director of John Laing Infrastructure and director of business
18
development, he is now the group managing director for primary investments and a member of the
executive team. He is responsible for all bidding and primary investment activities, both in the UK
and internationally.
An engineering graduate and qualified chartered accountant, he worked for Jardine Matheson UK
Virgin Group, Passport Alliance42 and GB Railways Group plc before joining John Laing.43
The following addresses have been identified as being linked to Potts:
O 55 East Street, Coggeshall, Colchester CO6 1SJ (1992 to 2015)
O Neva Villa, Summer Grove, Elstree, Borehamwood WD6 3HH
3.8.3.2 Corporate Affiliations
United Kingdom
Potts has 11 current UK appointments44, all with companies in the John Laing Group.
A list of his current appointments is provided in Appendix One.
He has 261 previous UK appointments.
3.8.3.3 Adverse Media Search
Searches of press archives have identified no significant red flags concerning Potts.
He has been quoted in the press from time to time in connection with John Laing's primary
investments.
3.8.3.4 Litigation, Insolvency and Bankruptcy
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for Potts at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Potts as having
been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court,it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
19
Insolvency and Bankruptcy
Potts is not included in the Individual Insolvency Register for England and Wales. The Individual
Insolvency Register contains details of bankruptcies that are current or have ended in the last three
months; debt relief orders that are current or have ended in the last three months;current individual
voluntary arrangements and fast-track voluntary arrangements, including those that have ended in
the last three months; current bankruptcy restrictions orders or undertakings and interim
bankruptcy restrictions orders; current debt relief restrictions orders or undertakings and interim
debt relief restrictions orders. It should however be noted that, should an individual pay off their
debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Potts.
3.8.4 Carolyn Cattermole
3.8.4.1 Background
Carolyn Tracy Cattermole ("Cattermole") was born on September 5, 1960 and is British, according
to UK corporate records.45
She has been the group general counsel and company secretary of John Laing Group since
September 2012. She qualified as a solicitor worth Norton Rose and was a senior legal adviser
with Courtaulds plc before spending three years as company secretary of Courtaulds Textiles plc.
She then spent ten years as general counsel and company secretary of the recycled packaging
supplier DS Smith plc before joining John Laing.46
The following addresses have been identified as being linked to Cattermole:
• 31 Cornwall Grove, Chiswick, London W4 2LB (2001 to 2013)
• 81 Cranbrook Road, Chiswick, London W4 2LJ (1992 to 2001)
• 31 Homefield Road, London W4 2LW
3.8.4.2 Corporate Affiliations
United Kingdom
Cattermole has 12 current UK appointments47, 11 of which are with companies in the John Laing
Group or joint ventures. She is also a director of DS Smith B.V. which is registered in the UK as a
foreign company. It is possible that her name was not removed from corporate records when she
left DS Smith -the last document to include directors' names was filed on 17 June 2011 when she
still worked for the company.
A list of her current appointments is provided in Appendix One.
She has 369 previous UK appointments.
3.8.4.3 Adverse Media Search
Searches of press archives have identified no significant red flags concerning Cattermole. Except
for her name on Stock Exchange notifications as the company secretary of Courtaulds Textiles, DS
Smith plc and now John Laing plc, she has a low media profile.
3.8.4.4 Litigation, Insolvency and Bankruptcy
Litigation
Register of Judgments, Orders and Fines for England &Wales
20
Searches of the Register of Judgments, Orders and Fines for England &Wales did not identify any
entries for Cattermole at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of Cattermole as
having been involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Cattermole is not included in the Individual Insolvency Register for England and Wales. The
Individual Insolvency Register contains details of bankruptcies that are current or have ended in
the last three months; debt relief orders that are current or have ended in the last three months;
current individual voluntary arrangements and fast-track voluntary arrangements, including those
that have ended in the last three months; current bankruptcy restrictions orders or undertakings
and interim bankruptcy restrictions orders; current debt relief restrictions orders or undertakings
and interim debt relief restrictions orders. It should however be noted that, should an individual pay
off their debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Cattermole.
3.8.5 Brett Pieterse
3.8.5.1 Background
Brett Johannes Theodorus Pieterse ("Pieterse") was born on September 15, 1975 and is South
African, according to UK corporate records.
He has been a divisional finance director at John Laing since June 2011, having joined the group
as an interim financial controller for the business development division in September 2010,
according to his Linkedin profile.48
He qualified as a chartered accountant in South Africa and was an audit senior with Deloitte before
his first stint at John Laing as a financial controller form 2003 to 2008. He spent two years as a
financial controller with Catalyst Lend Lease before rejoining John Laing.49
The following addresses have been identified as being linked to Pieterse:
• 45 Fox Dene, Godalming, Surrey GU7 1YG (2014)
• 38 The Paddocks, Normandy, Guildford GU3 2HA(2008 to 2013)
21
• Flat 1, Lancaster House, Brathway Road, Wandsworth, London SW18 4BD (2006 to 2007)
• Flat 5, Fairheathe, 43 Putney Hill, Putney, London SW15 6QP (2003 to 2004)
• 16 Dowman Close, London SW19 2XG (2002 to 2003)
• Flat 13, Fairlawns, Putney Hill, London SW15 6BD
3.8.5.2 Corporate Affiliations
United Kingdom
Pieterse has five current UK appointments50,which are all with companies in the John Laing Group.
A list of his current appointments is provided in Appendix One.
He has four previous UK appointments.
3.8.5.3 Adverse Media Search
Searches of press archives have identified no significant red flags concerning Pieterse. He has a
low media profile.
3.8.5.4 Litigation, Insolvency and Bankruptcy
Litigation
Register of Judgments, Orders and Fines for England &Wales
Searches of the Register of Judgments, Orders and Fines for England&Wales did not identify any
entries for Pieterse at addresses at which he is known to have lived in the last six years.
The Register of Judgments, Orders and Fines for England & Wales is a statutory public register
run on behalf of the Ministry of Justice. The Register covers all non-defended money-related
County Court Judgments,Administration Orders, Child Support Agency Liability Orders, High Court
Judgments, Fines defaults and Tribunal Awards. County Court and High Court Judgments remain
on the Register for six years. Other orders and awards may be removed earlier. Searches of
individuals must be conducted in conjunction with a UK address.
UK Civil and Criminal Litigation
Searches of the relevant legal databases and media reports found no mention of x as having been
involved as a named party in any reported litigation in the UK.
This does not represent a definitive conclusion that the subject has not been involved in civil or
criminal proceedings in this country. Whilst statements of case are available for public inspection,
such information is not available on an online database. This means that, unless it is known in
advance that a subject is or has been involved in legal proceedings in a particular court, it is difficult,
if not impossible, to gather this information without actually inspecting the records of individual
County and High Courts.
It should also be noted that other than selected judgments from the Criminal Court of Appeal,
publicly searchable UK litigation archives do not contain information from criminal cases.
Insolvency and Bankruptcy
Pieterse is not included in the Individual Insolvency Register for England and Wales.The Individual
Insolvency Register contains details of bankruptcies that are current or have ended in the last three
months;debt relief orders that are current or have ended in the last three months;current individual
voluntary arrangements and fast-track voluntary arrangements, including those that have ended in
the last three months; current bankruptcy restrictions orders or undertakings and interim
22
bankruptcy restrictions orders; current debt relief restrictions orders or undertakings and interim
debt relief restrictions orders. It should however be noted that, should an individual pay off their
debts, their name would be removed from the Register.
Searches of the historical archive of the London Gazette, which publishes bankruptcy notices,
revealed no references to Pieterse.
3.9 Research in the U.S.
3.9.1 Identification
John Laing Investments Ltd ("John Laing Investments") operates in the United States under the
name John Laing (USA) Limited.51 The company is currently listed as an active foreign business
corporation in the state of New York.52 During the course of its investigation, Kroll conducted
searches under both "John Laing Investments Ltd." and "John Laing (USA) Ltd."
3.9.2 Adverse Public Records
Kroll searched U.S. Federal Court indices nationwide back to approximately 1990, depending on
the jurisdiction, for civil litigation and criminal proceedings naming John Laing Investments as a
party. Kroll did not identify any records naming the subject.
Kroll conducted onsite research for adverse public records(e.g. civil litigation, criminal records,tax
liens and lawsuit judgments) in the following jurisdiction where John Laing Investments has most
recently been associated:
• New York County, New York
Kroll did not identify any state level civil litigation naming John Laing Investments as a party.53
Additionally, Kroll conducted a criminal records search with the New York Statewide Office of Court
Administration and did not identify any records naming the subject.
3.9.2.1 Bankruptcies, Liens & Judgments
Kroll searched for bankruptcies filed by John Laing Investments, as well as any tax liens or
judgments filed against the company. Kroll identified the following tax warrant:
Debtor Creditor Nature Date Filed Filing No. Court I'Office Amount Status
John Laing State of New State Tax E035164717 Westchester
USA Limited York Warrant
10//25/2011 W0018 County Clerk $1.482 Released
3.9.2.2 Regulatory Actions and Compliance Databases
Kroll found no regulatory sanctions or litigation, including Securities and Exchange Commission
sanctions or litigation, involving John Laing Investments.
Searches of compliance databases that list those suspected of organized crime, drug trafficking,
money laundering, terrorist activities or corruption found no mention of John Laing Investments.
51 According to records maintained by the New York Secretary of State.
52 No.3637063
53 Kroll searched the Supreme Court of New York County for general civil,family and small claims cases naming the
subject as plaintiff or defendant from approximately January 1, 1996 through May 26,2016.
23
3.9.2.3 Press Reports and Internet
Kroll's review of press reports and Internet pages, including social media pages, found no ,
derogatory or controversial references to John Laing Investments.
•
n
24
4. SACYR INFRASTRUCTURE USA
4.1 Research in Spain
4.1.1 Identification
Sacyr Infrastructure USA, LLC is part of the Sacyr Group ("the Group"), formerly known as the Sacyr
Vallehermoso Group,54 a Spain-based diversified group of entities engaged in construction, property
development,concessions and services.According to its website,the Group operates in more than 20
countries across five continents through its subsidiaries.55-These entities primarily focus on contracting,
managing,and executing public and private works projects, including transport infrastructures, such as
freeways, highways and roads; waterworks; railroads; ports; airport infrastructure; and environmental
works.56
Commercial databases identify the group's holding company in Spain as Sacyr S.A. ("Sacyr"). Sacyr
shares currently trade on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges, and the
company is listed on the Ibex 35 index.57 Records maintained by the Spanish Central Mercantile
Registry contain the following details regarding Sacyr:
• Name: Sacyr S.A.
• Registry: Madrid
• CIF: A28013811
• Registered Address: Paseo de la Castellana, 83-85, 28046, Madrid,Spain
• Authorized Capital: EUR 517,430,991
• Disbursed Capital: EUR 517,430,991
According to a 2016 shareholder presentation, Sacyr operates the following four main divisions:58
• Construction, through its head units, Sacyr Construccion, Somague and SIS. The focus is on
the construction and civil engineering of residential and non-residential building infrastructure.
Projects include the construction of motorways, railways, hydraulics, airports and urban
development.The division's sales in 2014 was reported as USD 1.913 million,with a net profit
of USD 46 million.
• Concessions, through the head unit, Sacyr Concesiones. This division operates in Spain,
Portugal, Italy, Ireland, Colombia, Peru, Chile and the United States. Its primary focus is the
management of infrastructure,such as toll roads,hospitals,transport hubs and airports,among
other projects. The division's 2014 sales was reported as USD 472 million, with a net profit of
USD 21 million.
• Industrial, through its head unit, Sacyr Industrial. The division was formed following the
consolidation and integration of various affiliated entities operating in the areas of engineering
54 According to the company's 2015 annual report,the Group was formerly known as Sacyr Vallehermoso as a result
of its 2003 merger with Vallehermoso, S.A., but changed its name to Sacyr in June 2013 following a General
Shareholders'Meeting.The Group is formed by the parent company, Sacyr, and its subsidiaries and associates.
55 According to the company's 2015 annual report, Sacyr's holdings include hundreds of subsidiaries and affiliated
entities. Kroll will provide a complete list of these companies at the client's request.
56 http://www.sacyr.com/es_en/global-company/Corporate-activity/default.aspx
57 http://www.sacyr.com/es_en/channel/shareholders-and-investor-channel/general-information/share-and-share-
capital/
58 Sacyr 2016 Shareholder Presentation published in February 2016.
• 25
and industrial construction. The division also covers the promotion, performance, start-up and
operation of projects in four key business areas:
o Engineering and Energy
o Environment and Mining
o Oil&Gas
o Electrical Facilities
The division's 2014 sales was reported as USD 219 million, with a net profit of USD 2 million.
• Services, through its head unit, Valoriza. This division specializes in environmental services
(municipal, waste treatment and regeneration), water services, and other environmental
service categories, which include facilities maintenance, upkeep of road infrastructure,
dam/canal maintenance, highway and toll road service stations, and mining exploration. The
division's 2014 sales was reported as USD 1.045 million.
The company's 2015 annual report,audited by Ernst&Young, provides the following details regarding
Sacyr's financial results(in thousands of Euros):
Revenue 2,948,914
Total Operating Income 3,063,394
Operating Profit 147,821
Total Comprehensive Income 518,725
According to news sources, the company's debt has been reduced from EUR 11.8 billion in 2011
to approximately EUR 4.3 billion in 2015.59
4.1.2 Ownership and Corporate Structure
According to the company's 2015 annual report, Sacyr's shareholders,as of December 31,2015,were
as follows:
Shareholder 2015 2014
Disa Corporaci6n Petrolifera,S.A. 12.66% 12.07%
Grupo Corporativo Fuertes,S.L. 6.27% 5.79%
Cymofag, S.L. 5.06% 5.27%
Beta Asociados,S.L. 5.08% 5.08%
Prilomi,S.L. 4.66% 4.66%
Taube Hodson STonex Partners LLP 3.06% 4.61%
Prilou,S.L. 3.16% 3.16%
Other 60.05% 59.36%
The company's listed Board Members include:
• Manuel Manrique Cecilia—Chairman and CEO
• Demetrio Carceller Arce—Deputy Chairman
• Jose Manuel Loureda Mantinan—Director
• Isabel Martin Castella—Director
• Matias Cortes Dominguez—Director
• Jose Manuel Loureda Lopez—Director
• Gonzalo Manrique Sabatel—Director
• Javier Adroher Biosca—Director
• Juan Miguel Sanjuan Jover—Director
• Tomas Fuertes Fernandez—Director
• Jose Moreno Carretero—Director
• Raimundo Baroja Rieu—Director
• Juan Maria Aguirre Gonzalo—Director
59 "Las empresas espanolas, morosas, pero menos," El Nuevo Lunes de la Economia y la Sociedad, February 8,
2016.
26
• Augusto Delkader Teig—Director
4.1.3 Media Profile
Kroll conducted Spanish-language media research for news articles, press releases and other
reports involving Sacyr and identified thousands of media references to the company and its
affiliated entities, primarily in the form of news reports on Sacyr's projects, contractual disputes
and partnerships with other firms. Given the large volume of information pertaining to the company
and its subsidiaries, Kroll's research was conducted using the company's name and specific
adverse keywords. The following significant milestones in Sacyr's history and recent disputes
involving the company were identified:
4.1.3.1.1. Sacyr President Investigated Over "Environmental Crime" and Fiscal
Evasion
In 2005, news sources reported that the then-President of Sacyr, Luis Del Rivero ("Del Rivero"),
was under investigation by the Madrid public prosecutor.60 According to an article in El Mundo, Del
Rivero was a listed managing director of Frocap Lo Romero, a company that the public prosecutor
alleged had illegally captured water from a river, which it then sold to local farmers and/or for use
in urban projects. Media reports did not specify how much money was allegedly siphoned off to
Del Rivero personally, but noted that the amount of water appropriated by the company was valued
at approximately EUR 33 million.61
In an interview with La Verdad, Del Rivero denied his or Sacyr's participation in the alleged water
theft enterprise, and said the accusation was a "scheme devised to discredit him and his
company."62 However, it is unclear from available information Frocap Lo Romero's degree of
affiliation to Sacyr.
4.1.3.2 Sacyr Submits Takeover Bid of Eiffage, Fined by French Regulator
In 2007, El Diario Vasco and other news sources reported on Sacyr's "hostile" takeover bid for
Eiffage, a French construction company of which Sacyr was already the largest shareholder, with
33.32 percent of Eiffage's capital and 29 percent of its votes.63 According to an article published in
Expatica, in April 2007, Sacyr bid EUR 6.5 billion (USD 8.8 billion) for control of Eiffage in a bid
that "would give rise to the fourth-biggest European civil engineering and construction group."64
According to an article published in El Mundo, the offer was made "the day after an Eiffage
shareholders' meeting rejected, with 59.40% of the votes, the nomination of five directors
suggested by Sacyr."65 At the same time, Eiffage Chairman Jean-Francois Roberato also stripped
voting rights from Spanish investors that bought into Eiffage, sparking a legal battle between both
parties.66 After the meeting, Del Rivero announced that Sacyr would have to take certain
"necessary steps" to reverse the shareholders' meeting decision.67
In June 2007, the French securities regulator, the Autorite des Marches Financiers ("AMF"), said
Sacyr "violated stock market rules"68 prior to its EUR 6.5 billion bid to win control of Eiffage by
acting "in concert with other Spanish investors to buy shares of Eiffage, taking its stake in the
French builder to a level that should have triggered an offer earlier and at a higher price."69 The
60 "La Fiscalia investiga a Luis del Rivero por delito ecolOgico y evasion fiscal," El Mundo,January 28, 2005.
6' "Un juez de Murcia esta investigando al president de Sacyr-Vallehermoso, Luis del Rivero, por un presunto delito
ecologico y otro de evasion fiscal," El Mundo,January 28, 2005.
62 "Sacyr dice que ni extrae ni vende agua de forma ilegal," La Verdad, January 29,2005.
63 "Eiffage considera hostil la opa de Sacyr," El Diario Vasco,April 24, 2007.
64 http://www.expatica.com/fr/news/Sacyr-bids-65-bin-euros-for-control-of-Eiffage_144753.html
65 "Sacyr lanza una OPA sobre el 100%de la francesa Eiffage," El Mundo,April 20,2007.
66 https://next.ft.com/content/5b049660-Ocaa-11 dd-86df-0000779fd2ac
67 "Sacyr lanza una OPA sobre el 100%de la francesa Eiffage," El Mundo,April 20,2007.
s6 "AMB voids Sacyr's Eiffage offer, raises furture bid cost," The Globe and Mail,June 28,2007.
69 Ibid.
27
•
AMF ruling rendered Sacyr's bid null and void, forcing Sacyr to submit a new offer based on the
highest price paid for the stock in the past year.
In April 2008, Sacyr and President Del Rivero were charged with lying to the Spanish stock market
during the company's attempted takeover of Eiffage. According to Paris court judge Pierre
Gazeaux, Sacyr issued "deceitful information" in 2007 when it denied it had reached a shareholder
stake in Eiffage that was higher than 33.3 percent.70 Shortly thereafter, the company issued a
release announcing the sale of its 33 percent stake in Eiffage, putting a formal end to its "bitter
two-year campaign for board seats at its French rival."71 According to a regulatory filing submitted
to the Spanish National Securities Market Commission ("CNMV"), Sacyr sold its shares to a group
of French institutional investors for a total of EUR 1.92 billion. The company filing said the
agreement included the termination of all judicial proceedings initiated by both parties.72 At the
same time, CNBC also reported that the Paris Appeals Court overturned the AM F's decision,which
had alleged that Sacyr acted in concert with other shareholders to buy a third of Eiffage "to try and
get seats on its board."73 As reported by Europa Press, Sacyr would use the proceeds from the
sale to cancel its debt, which by December 2007 reportedly amounted to EUR 1.71 billion.74
In March 2010, the AMF issued a EUR 300,000 sanction against Sacyr, and a EUR 100,000
sanction against President Del Rivero. According to news sources, the sanction was filed against
Sacyr for not informing the French regulator of the increase in its shares of Eiffage.75
4.1.3.3 Stock Manipulation Claims Filed Against Del Rivero
In December 2008, a Citigroup infrastructure fund bid EUR 7.9 billion to buy most of Itinere, a
Sacyr highway-operations subsidiary. The deal involved the Citi fund assuming EUR 5 billion of
debt and paying EUR 2.87 billion in cash in a transaction that would "slash Sacyr's debt load by as
much as 37%." The sale would also involve Sacyr buying back some highway concessions that
were in an initial phase.76
The following year, in November 2009, 15 minority shareholders of Europistas, a highway operator,
accused Del Rivero of"stock manipulation"with regard to his involvement in the Europistas-Itinere
merger deal.77 According to news sources, Itinere had bought most of Europistas and merged with
it in 2007.78 In November 2009, a court judge charged Del Rivero with "breach of fiduciary duties"
and"conspiracy to manipulate stocks."79 According to a news article, Del Rivero sought to"elevate"
Sacyr's stake in the consolidated company, and obtained an increased stock option in exchange
for an "overvalued" price.80 Sacyr denied all charges, and defended the "absolute legality" of its •
actions in the deal.81
Following an investigation into the above claims, in April 2011, the CNMV announced it uncovered
no evidence of an "overvaluation"of the Itinere subsidiary during the Europistas merger.According
to Carlos Lazaro, CNMV director, the change in Itinere's value and the stock options Sacyr and
Del Rivero received in exchange "were unsubstantial."82
70 "Contencioso judicial—Adopta la decision tras tomar declaracion a Del River," El Mundo,April 17,2008.
71 https://next.ft.com/content/5b049660-Ocaa-11dd-86df-0000779fd2ac
72 Sacyr S.A., Registro No.92079 filed with the CNMV on April 17, 2008.
73 "Court Rules Against Sacyr Cash Bid for Eiffage,"CNBC,April 2, 2008.
7a "Sacyr cancelara la deuda de 1.713 millones asociada a Eiffage con to que obtenga por su yenta," Europa Press,
April 9, 2008.
75 "La CNMV francesa sanciona con 400.000 euros a Sacyr por el contencioso con Eiffage," Europa Press, March
24, 2010.
76 http://www.marketwatch.com/story/citi-fund-buying-spanish-highways-for-10-billion
77 Luis Del Rivero, imputado por irregularidades en la fusion de Itinere," Ideal, November 24,2009.
76 http://www.reuters.com/article/itinere-idUSL1145391420080411
7° "Imputan a Del Rivero por posibles anomalias en la fusion de Itinere y Europistas," ABC, November 24,2009.
6° Ibid.
81 Ibid.
62 "CNMV no ve indicios de que Itinere se sobrevalorara en fusion con Europistas,"Agencia EFE,April 13,2011.
28 •
•
4.1.3.4 Sacyr Accused of Granting Kickbacks for Waste Collection Contract
Kroll identified an article published in El Pais in July 2013 reporting on Sacyr's connection to the
Barcenas Affair, a corruption scandal in Spain involving the People's Party ("PP"), which allegedly
kept a parallel bookkeeping system to record undeclared and illegal cash donations used to pay
bonuses to senior members of the party.83
According to the article, Luis Barcenas ("Barcenas"),former Treasurer of the PP, confirmed in court
the existence of a slush fund and named Mariano Rajoy, Spain's Prime Minister, along with other
top PP officials, as the recipients. According to the so-called Barcenas Papers —the accounts of
the alleged party slush fund maintained by the former treasurer —executives of large construction
groups, such as OHL, FCC and Sacyr, made dozens of illegal payments in exchange for
government contracts and concessions.84 The El Pais article reported specifically on a EUR
200,000 payment made by a Sacyr subsidiary, Sufi, to Jose Angel Catias, Manager of the PP in
Castilla-La Mancha in exchange for a government street-cleaning contract.85 In response to
Barcenas' claims, Del Rivero, then-former President of Sacyr, filed a civil suit for slander and
defamation, and demanded EUR 300,000 for the "absolutely false information" regarding his
involvement in the kickback scheme alleged by Barcenas to news publications.86
4.1.3.5 Sacyr Accused of Breach of Contract in Emmasa Project
Kroll identified several news sources which reported on Sacyr's alleged "breach of contract" in a
deal with the Municipal Government of Santa Cruz.According to one article, in 2005,the Municipal
Government privatized the municipality's water supply company, Emmasa, through a bid won by
Sacyr.87 In July 2014, the local government announced it would enact an "intervention" into the
municipal water management system as a result of several "breach of contract" issues.88
Sacyr allegedly won the bid in 2005 because it stated in its proposal that it would invest more than
EUR 150 million in the capital city of the Tenerife region. However, according to Jose Manuel
Corrales, spokesperson for a local advocacy group, Por Tenerife, "the results of an audit from 2006
until 2012 could only verify EUR 13 million in investments of the EUR 150 million Sacyr initially
promised."89
According to the government intervenor, Rogelio Padron, Sacyr was accused of several
"irregularities," including "financial damages incurred by Emmasa as a result of Sacyr's
subcontracting practices,which granted a disproportionate number of benefits to the subcontracted
companies, many of which were Sacyr affiliates."90
4.1.3.6 Lags in Sacyr's Repsol Investment Lead to Layoffs
Kroll identified numerous articles reporting on the financial difficulties of Sacyr's 8.5-percent share
in Repsol SA, a Madrid-based energy company focused on upstream and downstream activities.
According to Spanish newspaper Expansion, "Sacyr might have closed a historic year [2015] if it
weren't for its 8.5 percent shareholding in Repsol and its associated losses."91 With recent asset
offloadings, including the sale of Testa in 2015 to Merlin Properties for EUR 1.8 billion, Sacyr was
83 www.ft.com/cros/s/0/4feec248-186b-11e2-b4c4-
00144feabdc0.html+&cd=4&hl=en&ct=clnk&gl=us#axzz4Bg2G8u7j
Ibid.
es "Un contrato de basuras bajo sospecha," El Pais,July 21,2013.
66 "Del Rivero reclama 300.000 euros a Barcenas por las falsedades filtradas a un diario," ABC Sevilla, August 1,
2013.
87 "Las aguas turbias de Emmasa," La Opinion de Tenerife,July 22,2014.
88 "Los incumplimientos de contrato de Sacyr fuerzan a intervenir Emmasa," La Opinion de Tenerife,July 22,2014.
89 "XTF amplia la denuncia contra Sacyr por delito societario y prevaricacion," La Opinion de Tenerife, August 30,
2014.
90 "El interventor solicita dos meses mas para investigar la gestion de Emmasa," La Opinion de Tenerife, June 23,
2015.
91 "Repsol lastra el beneficio de Sacyr," Expansion,February 27, 2016.
29
reportedly able to "compensate for Repsol's EUR 655 million in losses."92 However, given the
setbacks in the construction industry and the Spanish financial crisis, Sacyr began announcing
layoffs in some of its Spain and Portugal facilities. According to an article published by Agencia
EFE, in February 2016, Sacyr announced it would lay off approximately 350 employees from its
construction division after a prolonged slump in the market.93 Following the announcement,
approximately 300 people attended a strike organized at Sacyr's headquarters in Madrid.94
4.1.3.7 Construction of Panama Canal
After nearly seven years of work under a contract the company was awarded in July 2009, in Jun e
2016 Sacyr concluded the construction of the third set of locks at the Panama Canal. Over the
years, various news sources have reported on a "bitter dispute" between the Panama Canal
Authority ("PCA") and the Sacyr-led consortium of construction companies over the spiraling cost
of expanding the waterway.95
According to an article published in El Mundo, a legal battle is still underway to decide the price of
the construction work and, depending on what a Miami arbitration court decides, the project could
mean significant losses for the builders.96 Leaders of the Sacyr-led consortium contracted to
perform the work, Grupos Unidos por el Canal ("GUPC"), have repeatedly told Spanish journalists
in Panama that"it is going to be very difficult for this project to make money."97 With an initial budget
of EUR 2.85 billion, Sacyr reported in 2016 that costs have spiked to EUR 5.58 billion, triggering
demands for more money from Panama Canal authorities and nearly doubling the initial costs of
the project.98
According to an El Pais article from January 2014, Sacyr was contracted to build an extension to
widen the Panama Canal, but decided to suspend work on the project,99 stating that it would be
impossible to complete the project within the budget specified in its project bid.700 GUPC wanted
the PCA to agree to pay an additional USD 1.6 billion for them to continue the project.101 According
to an article in The Economist from January 2014, PCA administrator Jorge Quijano ("Quijano")
stated that the PCA refused to pay the USD 1.6 billion because cost increases were accounted for
in the contract.t02 He stated that the PCA was prepared to pursue the issue through dispute
resolution to ensure that construction continued, and was prepared to bring the matter to the
International Chamber of Commerce if necessary.103 Sacyr accused the PCA of"serious breaches"
of contract.104
The January 2014 article in The Economist further states that the consortium's bid was too low
because the European firms were "desperate" for international contracts.105 According to the
article, journalists identified a Wikileaks cable supposedly from United States diplomatic officials
"saying that Bechtel, a losing American bidder, thought the Sacyr-led bid wouldn't even cover the
cost of cement."106
92 Ibid.
93 http://uk.reuters.com/article/uk-spain-sacyr-idUKKCNOVC2GV
94 "Protestas contra los ERE de Sacyr y FCC en el negocio de la construccibn," Agencia EFE,April 14, 2016.
95 http://www.reuters.com/article/us-sacyr-panama-insight-idUSBREAOJ09320140120
96 http://www.elmundo.es/economia/2016/05/25/57449fbce2704e2e408b4638.html
97 http://www.expansion.com/empresas/inmobiliario/2 0 1 6/0 5/2 4 15 74 46f16e2704e4a7d8b45db.html
9e https://www.capitalmadrid.com/2016/4/28/42062/sacyr-concluye-el-canal-de-panama-pero-con-las-
reclamaciones-sin-cerrar.html
99 http://elpais.com/elpais/2014/01/02/inenglish/1388662541_449784.html
1°° Ibid.
101 Ibid.
102 "Your money or your locks," The Economist, January 3, 2014.
103 Ibid.
1Q4 Ibid.
106 "Your money or your locks," The Economist, January 3, 2014.
106 Ibid.
30
The Economist article from January 2014 states that the Sacyr consortium to expand the Canal
and the PCA had a prior conflict.107 According to Quijano, when the PCA rejected the consortium's
preferred mix of concrete, approximately USD 900 million was "magically" added to the cost of
construction.108 Quijano dismissed the Wikileaks cable, saying that the winning bid used fewer
materials and was therefore cheaper.109 A May 2014 article in El Pais stated that the government
of Panama continued to refuse to offer Sacyr a price increase to finish construction.710
4.1.3.8 Other Incidents
Kroll identified numerous other news articles and media reports referencing the company and/or
its affiliated entities in relation to contractual disputes and ensuing legal proceedings. For instance,
news sources reported on a long-standing dispute between Sacyr and the regional government in
Murcia regarding construction delays at a local airport.171 Other news articles identified by Kroll
reported on a"probe" initiated by Chilean authorities into Costanera Norte SA and Sacyr, after road
works conducted by the two companies in Santiago diverted "torrential rains into a wealthy
neighborhood"of the city,flooding shops and restaurants.172 Kroll can conduct further research into
these matters at the client's request.
4.1.4 Adverse Public Records
4.1.4.1 Litigation
Kroll conducted searches of judgment records on file with the Supreme Court, the National
Audiences, the Provincial Audiences and the Superior Courts of Spain.113 Approximately 1,050
judgment records naming the company were identified.114 A large number of these cases were
small claims, arbitration and labor dispute matters in which the plaintiff(s) accused Sacyr of unfair
dismissal or sought workman's compensation and/or unpaid benefits and salary.
Numerous cases involving Sacyr's subsidiaries and/or joint ventures also were found. Additional
inquiries into these entities can be conducted upon request.
Several appeals by Sacyr against government decisions were found and primarily concerned
disagreements related to tax calculations.
The following includes a sample of judgment rulings filed in 2016 in which Sacyr or one of its
affiliates was a defendant in the original dispute:
• No. SAP GC 39/2016, filed in the Provincial Audience of Las Palmas de Gran Canaria on
February 2, 2016.
According to the decision, an appellate proceeding was filed by Galobra S.A. ("Galobra")
pursuant to a court decision entered in favor of Sacyr in a breach of contract lawsuit.
According to the appellate ruling, Galobra and Sacyr signed a contract in August 2009 for
certain unspecified construction work. Sacyr allegedly failed to comply with certain
contractual terms and deadlines, for which Galobra sought relief and compensatory
damages. According to the appellate record, the court upheld in part the claims against
Sacyr.
107 Ibid.
108 Ibid.
109 Ibid.
110 http://elpais.com/elpais/2014/05/13/inenglish/1399990193_399229.html
111 "Un camino sin retorno," La Verdad,April 2, 2016.
112 "Deluge That Flooded Chile Boutiques Engulfs Builder in Probe,"Bloomberg,April 18, 2016.
11° In Spain, court documents are not a matter of public record and privacy regulations protect individuals'judicial
records.This limits Kroll's ability to find information such as an individual's or company's criminal record or history,
or the current status of litigation.These databases contain a large, although not exhaustive, number of judgment
rulings. -
114 The majority of these judgment records name Sacyr as a party to litigation,while some only reference the company
in the text of the document.
31
• No. SAP M 4283/2016,filed in the Provincial Audience of Madrid,Court of Social Proceedings,
on March 18, 2016.
This appeal was filed by Messrs. Saturino, Blas, Palm ira and Adelina, pursuant to a court
ruling entered in favor of Vallehermoso Division Promocion S.A.U. ("Vallehermoso
Division") and Sacyr Construccion.According to the judgment record, the court ruled in the
initial proceeding that the defendants were "absolved" of the claims filed against them,
which related to construction and repair work "defects."The judgment record indicates that
the plaintiffs acquired various homes in a residential neighborhood, which Sacyr was
contracted to build. The court upheld the initial ruling, and the case was dismissed.
• No. STSJ M 3887/2016, filed in the Superior Tribunal of Justice of Madrid, Court of Social
Proceedings, on April 7, 2016.
This appeal proceeding was initiated by Sacyr ConstrucciOn pursuant to a civil suit filed by
an individual, Mr. Fermin ("Fermin"),15 against Preser Servicios Auxiliares S.A. ("Preser"),
Fondo de Garantia Salarial ("Fondo"), and Sacyr Construccion.According to the judgment
record, Fermin was terminated from his employment with Preser, and filed a civil suit
claiming he was not informed in due time of his termination, and was not compensated for
overtime work. With regards to Sacyr Construccion, a co-defendant in the initial suit,
Fermin alleged that his employer was a subcontractor to Sacyr Construccion, and as such
both could be held as responsible parties in relation to his claims. In April 2016, the
appellate court ordered Sacyr to pay EUR 500 to Fermin.
• No. SAP M 5154/2016,filed in the Provincial Audience of Madrid on April 19, 2016.
According to an appellate judgment record, this decision is the result of an appeal
proceeding filed by Promociones Cuevas Galicias S.L. ("Promociones") against Sacyr
Construccion S.A.U. ("Sacyr ConstrucciOn") pursuant to a contractual dispute between the
parties 16 According to available court records, the initial plaintiff was Grupo JCA
Hormigones S.A. ("Grupo JCA") but, in March 2014, Promociones became the official court
plaintiff by court decree.Available records do not specify the reason for this change.
As stated in the judgment record, in October 2010, Sacyr ConstrucciOn and Grupo JCA
signed a contract for the provision of certain supplies by Grupo JCA for the construction of
facilities at the Muelle Comercial Oeste de Marin.The dispute allegedly began when Grupo
JCA demanded payment of EUR 170,202 allegedly owed by Sacyr Construccion for
services/materials provided in relation to the construction project. In an initial court proceeding,
Sacyr ConstrucciOn was ordered to pay approximately EUR 50,000 to Grupo JCA.The plaintiff
appealed the court's decision, and a final judgment in the appellate case was entered in April
2016, overturning in part the court's initial finding, with no costs or fees demanded of either
party.
• No. STS 1886/2016, filed in the Supreme Court of Madrid on April 27,2016.
According to an appellate judgment record, an appeal proceeding was filed by Sacyr
Vallehermoso, S.A. against the Contentious-Administrative Court pursuant to the sale of
Vallehermoso, S.A. stock by Sacyr to Grupo Sacyr, S.A. after the group's restructuring in
2003.According to the record, Sacyr Vallehermoso disputed certain fiscal obligations and
payments allegedly owed to the government following the acquisition.
The state tax authority posited that Sacyr was uncompliant with relevant Spanish laws due
to the fact that (i) Sacyr transferred Vallehermoso stock to Grupo Sacyr and received
"extraordinary benefits" in exchange for the investment, and (ii) the subsequent
consolidation between Grupo Sacyr and Vallehermoso resulted in the handoff of
Vallehermoso stock to Grupo Sacyr shareholders, even though they were "outside the
15 Litigation records in Spain do not identify an individual's first name.
16 In March 2014, Promociones became the official court plaintiff by court decree.
32
scope of the newly consolidated group." For the above-stated reasons, the tax authority
sought to regulate the"tributary situation"by demanding fees for the restructuring in excess
of EUR 20 million. According to the appellate judgment record, the ruling entered by the
lower court was overturned.
Additional litigation records found in online media inquiries are reported in the Media Profile section
of this report.
4.1.4.2 Regulatory Sanctions and Compliance Databases
Kroll searched databases of sanctions, enforcement proceedings and press releases of various
regulatory agencies, including the National Securities Market Commission and the Ministry of
Finance and Public Administration. Kroll also searched databases that compile sanctions
lists/watchlists of companies and individuals involved in improper or illegal business practices,
such as money laundering, terrorism financing, corruption and fraud.
Kroll identified numerous contractual disputes involving Sacyr or one of its affiliated entities
published on the Ministry of Finance and Public Administration's website. Most of these relate to
contractual disputes. Additionally, two references to regulatory actions filed against Sacyr were
identified. The first instance relates to the dispute described in the Media Profile section of this
report, above, in which the French regulator AMF alleged in June 2007 that Sacyr violated stock
market rules prior to its EUR 6.5 billion bid to win control of Eiffage.As discussed above, in March
2010,the AMF disciplined Sacyr and fined it EUR 300,000 for concealing the fact that its ownership
of Eiffage capital had crossed a disclosure threshold.
The second regulatory action relates to the company's operations in Chile. As reported in news
sources, Sacyr Chile, S.A., a Sacyr subsidiary, was sued along with 14 other entities by Chile's
Production Development Corporation ("Corfo") for "damages caused by the irregular removal of
financial instruments"from Inverlink Corredores de Bolsa S.A.177 The companies were collectively
ordered to pay Co rfo CHP 33,151,103,037 (USD 48,238,501); of the total amount, "Constructora
ACS-Sacyr Chile S.A." was ordered to pay CHP 8,194,805,500 (USD 11,924,343).118 Kroll can
conduct additional research into these allegations in France and Chile at the client's request.
4.2 Research in the U.S.
4.2.1 Adverse Public Records
•
Kroll conducted searches for adverse public records (e.g. federal and state civil litigation, criminal
records, tax liens and lawsuit judgments) in the following jurisdictions where SACYR Infrastructure
USA LLC ("SACYR")19 has been associated:
• District of Columbia120
• Miami-Dade County, Florida121
Kroll identified no records naming SACYR or its affiliates.
4.2.1.1 Bankruptcies, Liens & Judgments
Kroll searched for bankruptcies filed by SACYR or its affiliates and searched for any tax liens or
lawsuit judgments filed against it. Kroll conducted targeted online research for tax liens and
117 "Caso Inverlink:condenan a sociedad de Pinera a devolver$5 mil millones a Corfo," Cambio 21, March 7,2015.
118 Ibid.
19 Kroll also conducted searches for affiliated entities SACYR Construction USA LLC,SACYR Environment USA LLC,
SACYR Industrial USA LLC and SACYR LLC.
120 Not all records for the District of Columbia are indexed online. At the client's request, Kroll will conduct onsite
research.
121 Not all records for Miami-Dade County are indexed online.At the client's request,Kroll will conduct onsite research.
33
judgments in Miami-Dade County, Florida and searched national indices. No proceedings were
identified.
4.2.1.2 Regulatory Actions and Compliance Databases
Kroll found no regulatory sanctions or litigation, including Securities and Exchange Commission
sanctions or litigation, involving SACYR or its affiliates.
Searches of compliance databases that list those suspected of organized crime, drug trafficking,
money laundering, terrorist activities or corruption found no mention of SACYR or its affiliates.
4.2.1.3 Press Reports and Internet
Kroll conducted a review of press reports and Internet pages, including social media pages. Kroll
identified no negative media naming SACYR or its affiliates in the United States.
•
34
5. URS ENERGY AND CONSTRUCTION
5.1 Identification
URS Energy and Construction is an active corporation registered in Ohio.722 URS Energy and
Construction is a subsidiary of URS Corporation, a California-based construction firm. According
to an archived URS Corporation webpage:
URS Corporation is a leading provider of engineering, construction and technical
services for public agencies and private sector companies around the world. The
Company offers a full range of program management; planning, design and
engineering; systems engineering and technical assistance; construction and
construction management; operations and maintenance; information technology;
and decommissioning and closure services. URS provides services for federal, oil
and gas, infrastructure, power, and industrial projects'and programs.123
In May 2007, URS Corporation announced that it was,acquiring Boise-based Washington Group
International ("WGI"), "the former Morrison Knudsen/builder of such projects as the Hoover Dam
and San Francisco's Bay Bridge."724 URS Corporation completed the deal for $3.1 billion in cash
and stock in November 2007.125 URS Chairman and Chief Executive Officer at the time of the
acquisition announced: "With the addition of Washington Group's complementary engineering and
construction services, URS becomes one of the few fully-integrated engineering, construction and
technical services firms capable of serving every phase of a project — from initial planning,
engineering and construction of a project, to operations and maintenance."126 Energy Central
reported:
The acquisition further/diversifies and broadens URS' market exposure, allowing
the Company to offer a broad range of engineering and construction services to
clients in the transportation, facilities, environmental, water/wastewater, industrial
infrastructure and process, homeland security, installations and logistics, and
defense systems markets. In addition, the combined company will be a major
contractor to the federal government.127
Post-acquisition,the URS Washington Division, maintained a location in Boise, Idaho.128 According
to records maintained by the Ohio Secretary of State, WGI changed its name to URS Energy and
Construction in February 2010. In October 2014, Los Angeles engineering design firm, Aecom
Technology Corporation ("Aecom") finalized its acquisition of URS, in a deal worth approximately
$6 billion.129 As a result of the acquisition, URS Energy and Corporation became an Aecom
company.
122 No. 171108
123 https://web.archive.org/web/20130720011232/http://www.urscorp.com/
124 "URS Corp. acquires Washington Group," The Seattle Times, May 29, 2007.
125 "URS replaces head of new Washington division," San Francisco Business Times,January 11, 2008.
126 "URS Corporation Completes Acquisition of Washington Group International,"Energy Central,November 15,2007.
127 Ibid.
128 https://www.helmetstohardhats.org/career-path/urs-corporation
129 "Aecom finalizes$6-billion acquisition of engineering design rival URS," Los Angeles Times,October 17, 2014.
35
5.1.1 Affiliated Entities
As detailed above, URS Energy and Construction was formed after URS Corporation's acquisition
of WGI in 2007.130 According to records maintained by the Ohio Secretary of State, URS Energy
and Construction has operated under the following names:
Entity Name Effective Date
The H.K. Ferguson Company 7/1/1937_
MK-Ferguson Company 6/6/1985
Morrison Knudsen Corporation 8/10/1990
Washington Group International, Inc. 7/7/2000
URS Energy and Construction, Inc. 2/25/2010
After Aecom's acquisition of URS Corporation, the combined firm's construction services group
was restructured into two segments.According to a Building.co.uk article: "Dan McQuade, currently
Aecom's chief executive for construction services, will become president of the building
construction half of the division, while George Nash, currently president of URS' energy and
construction division will head-up the combined firm's energy, infrastructure and industrial
construction division."131 J
5.1.2 Hanford Nuclear Site Federal Whistleblower Complaints
•
Dr.•Walter Tamosaitis("Tamosaitis")filed the following federal whistleblower complaint against URS
Energy and Construction on November 9, 2011:
• Walter Tamosaitis and Sandra B. Tamosaitis v. URS, Inc., URS Energy & Construction,
Inc., and The Department of Energy, No. 2:2011-cv-05157, filed in the United States
District Court for the Eastern District of Washington on November 9, 2011.
Tamosaitis filed this federal whistleblower complaint against URS Inc., including its
subsidiary URS Energy and Construction and the Department of Energy on November 9,
2011.Tamosaitis was an employee of URS Energy and Construction, a subcontractor under
Bechtel National Inc. ("Bechtel"),at the Hanford Nuclear Site in Washington. Tamosaitis
alleged that he was discriminated against, and that he was ultimately removed from.his
position as Deputy Chief Engineer and Manager of the Research and Technology division
at Hanford on July 2, 2010 for having raised performance and safety issues at a meeting
held on the previous day. According to the complaint, although URS was referred to as a
"subcontractor" at Hanford, "URS functions as a partner in that it splits profits and fees
equally with Bechtel and URS also shares key staff positions with Bechtel."
According to the amended complaint, Tamosaitis worked at the Waste Treatment Plant
("WTP")at Hanford, and his responsibilities on the project included: "identifying and solving
technology problems and raising concerns to management about engineering and process
issues that could potentially affect the safe, efficient, and effective operation of the WTP."
According to the amended complaint, in October 2005, Tamosaitis led the External
Flowsheet Review Team ("EFRT") study, which identified 28 safety issues requiring
immediate attention. Additionally, Tamosaitis stated that in June 2009, he submitted a list
of approximately 100 issues that needed to be addressed and required design attention,
"to ensure the safety, efficiency, and effectiveness of the WTP operation." As of October
2009, 27 of the 28 issues identified by the EFRT had been closed, with the exception of
the EFRT M3 mixing issue.According to the amended complaint, the EFRT mixing issue,
"required that design problems be resolved concerning the mixing of the high-level nuclear
tank waste in thirty-eight tanks in the pre-treatment area of the WTP...If the high-level
nuclear tank waste is not sufficiently mixed in the pre-treatment tanks, plutonium may settle
out and may cause a criticality accident. If the high-level nuclear tank waste is not
sufficiently mixed in the pre-treatment tanks, hydrogen gas bubbles will accumulate and
130 "URS replaces head of new Washington division," San Francisco Business Times,January 11, 2008.
13' "Aecom and URS unveil combined management team," Building.co.uk,September 3,2014.
36
may be trapped in the waste, which could lead to a sudden gas release and an explosion
or fire." -
The amended complaint alleged that Bechtel management wanted the M3 issue to be
closed by June 30, 2010 to ensure that Bechtel could earn $6 million in fees for meeting
its target milestone. Tamosaitis alleged that he repeatedly raised concerns regarding
Bechtel's methods to close this issue, however, "Bechtel did not want to address the mixing
issue directly because of the design changes that would be needed as well as the
reconstruction of the vessels, This would result in major cost increases and schedule
impacts and require more testing thereby jeopardizing the $6 million milestone award for
meeting the June 30, 2010 deadline." In late June 2010, Tamosaitis sent emails to
consultants working on the M3 mixing issues asking their opinions on Bechtel's
management approach of the issue.
Tamosaitis alleged that on July 1, 2010 he participated in a meeting called by the Bechtel
Technical Director to discuss any open issues. Tamosaitis presented a list of approximately
50 open issues, and it"contained several items that were needed to ensure the tanks mixed
safely, efficiently, and effectively." Tamosaitis was fired from the WTP project the following
day. In his March 11, 2014 testimony before the United States Senate Homeland Security
Subcommittee on Financial and Contracting Oversight, Tamosaitis stated, "Bechtel is the
lead on the WTP contract and is a much larger corporation than URS with income estimated
at three times that of URS (about $33B vs $11B). As a result, Bechtel carries much more
contracting weight to affect the desired outcome of events." When Tamosaitis questioned
why he was terminated from the project, a URS Senior Vice President responded, "URS
does anything Bechtel says." �.
According to his March 2014 testimony, Tamosaitis claimed that in August 2010, he was
assigned to a basement office within URS' Richland corporate office and given no work to
do. Tamosaitis stated that on October 2, 201.3, after three years without meaningful work,
his position with URS was terminated. He alleged that his severance package was "held
hostage" by URS, as they would not release it until he signed a termination statement that
released the company from all legal liabilities. According to Tamosaitis, URS hoped he
would sign the termination agreement before his Federal Appeals Court hearing, which
would release the company from the lawsuit.
In his March 2014 testimony before the United States Senate Homeland Security
Subcommittee on Financial and Contracting Oversight,Tamosaitis stated that his concerns
with the WTP at Hanford were validated by actions taken by the Defense Nuclear Facilities
Safety Board ("DNFSB") and the Department of Energy ("DOE"). He stated:
Between October 2010 and mid-2011, the DNFSB held two public hearings
pertaining directly to Hanford. The DNFSB issued two recommendations,
,one relative to mixing issues and one relative to cultural problems, both
directly supporting and furthering my concerns. The DNFSB also pushed
DOE to do cultural surveys across their entire EM division [Environmental
Management].Through this process, the DOE Health, Safety, and Security
group identified problems at many sites including DOE headquarters.t32
Tamosaitis stated that his second validation came in 2012. He explained: "As a result of
the continued technical concerns in mid-2012 [DOE] Secretary Chu initiated an in-depth
investigation into the technical issues surrounding the WTP. Upon his team's conclusion,
Secretary Chu declared that due to the many issues, parts of the WTP plant (pretreatment
in particular)should be shut down until a definitive technical resolution path was defined."133
On October 10, 2012, the court issued a judgment in favor of the defendants on all of the
claims asserted against them by the plaintiffs, ruling that Tamosaitis was required to wait
132 Dr. Walter L. Tamosaitis Testimony Before the United States Senate Homeland Security Subcommittee on
Financial and Contracting Oversight on"Whistleblower Protection at the Hanford Nuclear Site,"March 11, 2014.
133 Ibid.
37
one year after changing the named defendant from URS Inc., to URS Corporation and URS
Energy and Construction. According to the Appeals Court opinion, the district court also
ruled that Tamosaitis "offered no evidence tending to show that URS Corp. was anything
but a parent corporation of Tamosaitis'employer, URS E&C, and that this parent-subsidiary
relationship was insufficient to establish liability under the ERA [Energy Reorganization
Act]." The district court also ruled that there was no genuine issue of material fact as to
whether URS Energy and Construction took adverse action because of Tamosaitis'
conduct.All of the evidence showed that Bechtel, not URS,was responsible for Tamosaitis'
removal from the WTP project. •
On November 7, 2012, the plaintiff filed an appeal with the Federal Court. The Appeals
Court affirmed the district court's dismissal of the case against the Department of Energy
and URS Corporation because Tamosaitis did not wait a full year after naming the
respondent in the Department of Labor, Occupational Safety and Health Administration
("DOL-OSHA")complaint before bringing a federal suit against them. However,the Appeals
Court reversed the grant of summary judgment for URS Energy and Construction, stating:
We hold that Tamosaitis introduced evidence sufficient to create a triable
issue as to whether his whistleblowing activity was a contributing factor in
the adverse employment action URS E&C took against him..there is plenty
of evidence that Bechtel encouraged URS E&C to remove Tamosaitis from
the WTP site because of this whistleblowing, that URS E&C knew that
Tamosaitis's whistleblowing motivated Bechtel, and'that URS E&C carried
out the removal.
Further,the Appeals Court found that, "a reasonable-factfinder could infer not only that the
retaliatory motive of URS E&C's customer, Bechtel, spurred URS E&C's actions against
Tamosaitis, but also that URS E&C knowingly acquiesced in or ratified Bechtel's
retaliation."
On August 17, 2015 the parties filed a settlement agreement,which was reached on August
12, 2015, in which Tamosaitis received $4.1 million. The lawsuit has since been stayed,
pending the distribution of the settlement funds. According to the settlement agreement,
Tamosaitis agreed to dismiss the/lawsuit with prejudice, upon the complete receipt of the
settlement funds.
An August 2015 Los Angeles Times article reported that the $4.1 million settlement was, "among
the largest known legal damages paid out to a whistle-blower in the Energy Department's vast
nuclear waste cleanup program."134 According to the article, a spokesman for Aecom stated: "the
company reached its resolution with Tamosaitis 'in order to avoid the cost and distraction of
litigation relating to events that occurred over five years ago.The company strongly disagrees that
it retaliated against him in any manner.-135
Kroll identified'a second federal whistleblower complaint filed by Donna.Busche ("Busche") on
February 12, 2013:
• Busche v. URS Energy and Construction, Inc., and Bechtel National, Inc., No. 2:13-cv-
05016, filed in the United States District Court for the Eastern District of Washington
(Spokane) on February 12, 2013.
Busche filed this whistleblower complaint with the Department of Labor on November 10,
2011. After one year had passed without a final decision, Busche filed this complaint with
the Federal Court against URS Energy and Construction and.Bechtel National Inc., alleging
that she has been discriminated against by the company after disclosing a number of safety
issues at the Hanford Nuclear Site Waste Treatment Project ("WTP").
134 "Hanford nuclear weapons site whistle-blower wins$4.1-million settlement," Los Angeles Times,August 13,2015.
15 Ibid.
38
•
According to the complaint, in March 2009, Busche, "was assigned to perform the duties
of Manager of Environmental and Nuclear Safety at Hanford" for URS Energy and
Construction, and her responsibilities included, "coordination and preparation of the
dangerous waste permit for URS waste treatment facilities, and development,coordination,
and approval of safety basis documents issued to the Department of Energy and used to
license URS facilities." Busche alleged that, "beginning in 2010, the company's focus
moved away from nuclear and environmental safety compliance and toward meeting
deadlines regardless of the quality of the work."
In the complaint, Busche stated that she attended the 2010 meeting in which Dr. Walter
Tamosaitis "produced a long list of technical items." According to the complaint, "Busche
indicated that she would do a hazards analysis on the listed items. In early July, BNI
Technical Director Greg Ashley told her that she did not need to do the hazards analysis
and that Walt was being reassigned." Additionally, on October 7 and 8, 2010, Busche
testified at a DNFSB public hearing (referenced in the above lawsuit, Walter Tamosaitis
and Sandra B. Tamosaitis v. URS, Inc., URS Energy & Construction, Inc., and The
Department of Energy), regarding the WTP. According to the complaint, "Busche's
testimony to the DNFSB public hearing contradicted the position taken by DOE, URS, and
BNI on nuclear safety calculations used to determine the dose to members of the public in
the event of an accident at a WTP facility and the development of a nonconservative and
noncompliant tool to model hydrogen detonations in pipes and ancillary vessels." Busche
alleged that the following day, members of URS and Bechtel upper management
approached her and asked if she could "provide a different answer" to the questions she
answered in the previous hearing. Busche stated that she refused to recant her testimony.
Busche also testified in a DNFSB closed hearing on December 15, 2010.According to the
compliant, "In January 2011, Mike Coyle verbally directed Busche to stop putting technical
and safety issues in writing to him, and to instead come to him in person with these issues,
so as to avoid making a written record."
According to the complaint, "On June 9, 2011, the DNFSB issued a recommendation to the
Secretary of Energy on the failed safety culture at the WTP, which was based in part on
the Busche closed hearing testimony, and which contained two findings: 1) a chilled
atmosphere adverse to safety exists; and 2) DOE Contractor Management suppresses
technical dissent."
Busche alleged that since filing her complaint, URS and Bechtel have retaliated against
her. Busche stated that/at URS, she, "is no longer considered a senior manager and has
been excluded from routine company meetings and communications afforded to other
employees at her/pay and grade." Busche also alleged, "BNI and URS attempted to
interfere with a federal investigation into nuclear safety violations. Ellen Livingston-Behan,
Sr. Vice President for Business Assurance at URS, reporting to Dave Pethick, President of
Global Management and Operations Services for URS contacted a Senior DOE official to
'call in a'favor and requested that the Office of Nuclear Safety enforcement not interview
Busche or entertain presentations made by her without her supervisor present." Busche
alleged that as a result of URS and Bechtel's retaliation, she was unable to do her job at
WTP, and, "there is a chilling effect on the WTP workforce's willingness to bring forth safety
and engineering concerns that could impact the cost and schedule of the facility in a
manner that might threaten the fees and profits" of Bechtel and URS.
In February 2014, Busche was fired from her position at URS Energy and Construction,
citing "unprofessional conduct" as the reason for her termination.136 On April 17, 2014
Busche filed a motion to dismiss the case with prejudice, and on May 23, 2014, the case
was dismissed.According to the Tri-City Herald, Busche planned "to file a new claim —her
third —with the Department of Labor after being fired from her URS job."137
136 "Second whistleblower Donna Busche fired at troubled Wash.State Hanford nuke plant," CBS News,February 19,
2014.
137 "Hanford whistleblower asks to drop lawsuit;other legal action underway," Tri-City Herald,April 27, 2014.
39
According to a February 2016 Aecom SEC 10-Q, URS Energy and Construction, an affiliate of
URS, "performs services under multiple contracts...at the Department of Energy's Hanford nuclear
reservation that have been subject to various government investigations or litigation."138 In
particular, the SEC filing noted the two lawsuits described above. It stated:
Waste Treatment Plant government investigation: The federal government is
conducting an investigation into the Company's affiliate, URS Energy &
Construction, a subcontractor on the Waste Treatment Plant, regarding contractual
compliance and various technical issues in the design, development and
construction of the Waste Treatment Plant.
Waste Treatment Plant whistleblower and employment claims: Two former
employees have each filed employment related claims against the Company's
affiliate, URS Energy& Construction, seeking restitution for alleged retaliation and
wrongful termination. In August 2015, URS Energy & Construction settled one of
these former employees' whistleblower and employment related claims for $4.1
million.139
In April 2016, the King County local news station KING 5 reported that "a leak in a massive nuclear
waste storage tank at the Hanford Site has expanded significantly."14°One former tank farm worker
referred to the leak as "catastrophic," adding, "this is probably the biggest event to ever happen in
tank farm history."141 The government contractor in charge of the tanks, Washington River
Protection Solutions ("WRPS"), is an affiliate of URS Corporation, a subsidiary of Aecom.142 KING
5 reported that WRPS was aware of the leak as early as 2011, but ignored any potential problems
for nearly a year.143 The Department of Energy and WRPS announced that there was no indication
the leak posed a risk to the public and released the following statement:
The U.S. Department of Energy (DOE) and Hanford tank farms contractor
Washington River Protection Solutions (WARPS) are evaluating recently identified,
anticipated changes in the amount of waste between the inner and outer shells (the
annulus) of Hanford double-shell tank AY-102.
Since March 3, DOE and WRPS have been retrieving waste from Tank AY-102, and
to date approximately 95/percent of the material has been retrieved. Early on the
morning of April 17, crews identified an increase in the waste level in the tanks
annulus. Early on the morning of April 18, a slight decrease in the height of the waste
in the annulus was-detected. Out of an abundance of caution, DOE and WRPS are
in the process of evaluating the tank's condition.
DOE and WRPS are committed to ensuring the safety of the Hanford workforce, the
public and the environment.144
5.2 Criminal Records and Litigation
5.2.1 Federal
Kroll searched U.S. Federal Court indices nationwide back to approximately 1990, depending on
the jurisdiction, for civil litigation and criminal proceedings naming URS Energy and Construction
as a party. Kroll identified the following litigation:
• United States of America, for the use and benefit of Safety and Ecology Corporation v. URS
Energy& Construction, Federal Insurance Company, and National Union Fire Ins. Co. of
'38 Aecom Inc., SEC Form 10-0,filed on February 10,2016.
139 Ibid.
140 "Leak worsens in massive Hanford tank holding nuclear waste," KING 5,April-16,2016.
141 Ibid.
142 Aecom Inc.,SEC Form 10-Q,filed on February 10, 2016.
143 "Leak worsens in massive Hanford tank holding nuclear waste,"KING 5,April 16,2016.
144 Ibid.
40
•
Pittsburgh, PA., No. 3:11-cv-00153-RLJ, filed in the United States District Court for the
Eastern District of Tennessee, on April 5, 2011.
According to the complaint, in 2006, URS Energy and Construction ("URS") was awarded
a government contract to build a Potable Water System Upgrade ("PWSU") on a piece of
property owned by the United States Government and operated by the Department of
Energy ("DOE"). On August 21, 2007, URS entered into a subcontract with Safety and
Ecology Corporation ("SEC") for SEC to provide certain materials, labor and related
services to the PWSU project. According to the complaint, the subcontract required SEC
to:
(a) review the Project's design during design development by URS's
engineers, (b) perform mobilization and site preparation, (c) construct the
foundations for two water towers, (d) install new underground water
distribution pipes, (e) install water lines, pumps and other equipment in a
pump room in the base of one of the water towers, and (f) demobilize the site
at the end of the Project.
The plaintiff alleged that URS submitted a schedule that showed a project completion date
in mid-March 2010, however, delays and disruptions in the project affected the proposed
timeline. Instead of finishing its work in December 2009, SEC was forced to remain on the
project until June 24, 2010. The plaintiff further alleged that URS did not fully compensate
SEC for all of its expenses and that URS failed to pay the remaining balance of what it had
previously agreed to pay on the subcontract. Additionally, URS directed SEC to "proceed
with work based upon change notices and to submit requests for equitable adjustment
('REAs')for proposed increases to the Subcontract price."According to the complaint, URS
failed to act upon some of the submitted REAs and has refused or failed to pay SEC for all
REAs submitted for work and expenses.
The plaintiff alleged that URS breached its contract and demanded $1,500,000 as well as
attorney's fees, costs charges, litigation expenses and prejudgment interest. On July 14,
2011, the case was dismissed with prejudice. No other information on the case resolution
is available. '
• Danny Britt v. URS Energy and Construction, No. 1:12-cv-01328, filed in the United
States District Court for the Central District of Illinois Peoria Division, on August 28, 2012.
Danny Britt ("Britt") filed this discrimination lawsuit against URS Energy and Construction
in the Circuit Court of the Tenth Judicial Circuit for Peoria County, Illinois on July 25, 2012.
It was removed to Federal Court on August 28, 2012. Britt alleged that while working as an
employee for URS Energy and Construction ("URS"), he was discriminated against by his
white supervisor because of his race. Britt alleged that he was continuously harassed by
his supervisor, and that"Managers for URS/Washington Group"forced him "to be the guest
of honor at their Klu [sic] Klux Klan Meetings." According to the complaint, Britt was
unlawfully fired when URS learned of his criminal record. Britt's complaint brought two
counts against URS: one count of race discrimination/hostile work environment and one
count of retaliation.
•
URS denied the allegations and alleged that when Britt was hired, he signed an
employment contract and denied ever being convicted of a criminal offense. This contract
permitted Britt's immediate termination for omitting his criminal record. Additionally, URS
alleged that Britt had faced numerous warnings for unprofessional and aggressive behavior
in the workplace. URS stated that the plaintiff's employment was terminated when the
company learned that his criminal charges had not been expunged, as he claimed, and
that he had been used different social security numbers and birth dates to gain
em ployment.
The court concluded the plaintiff had "failed to provide sufficient evidence to create a triable
issue of fact as to whether race was a motivating factor in the Defendant's decision to
terminate Plaintiff's employment; whether Defendant created a hostile work environment;
41
and whether Plaintiff was terminated as a result of retaliation."The case was terminated in
favor of URS on September 19, 2014.
• Robert Romeco Shannon v. URS Energy and Construction Inc., Chuck Taylor, Zack
Payne, and Toney McDaniel, No. 3:14-cv-01292, filed in the United States District Court
for the Middle District of Tennessee Nashville Division, on June 12, 2014.
One June 12, 2014, Robert Romeco Shannon filed this lawsuit against URS Energy and
Construction, Chuck Taylor, Zack Payne, and Toney McDaniel, alleging that the defendants
terminated his employment in violation of his constitutional rights. On April 9, 2015, the
case was dismissed with prejudice after the court found that the plaintiff's complaint failed
to state a claim. Shannon filed an appeal on May 26, 2015, however this appeal was
dismissed as untimely.
• Alexandra Santos v. URS Energy and Construction, Inc., No. 6:14-cv-00938, filed in the
United States District Court for the Middle District of Florida (Orlando) on June 17, 2014.
Alexandra Santos filed this action against URS Energy and Construction, doing business
as Florida Toll Services, alleging that she was subject to a hostile work environment and
disparate treatment after complaining of discriminatory and retaliatory acts at the company.
According to the complaint, "The supervisors treated her differently by yelling at her,
employing negative body language toward her, utilizing disapproving reactions to her
requests for work assistance, demonstrating lack of respect and publicly using demeaning
facial expressions.These were all in direct contradiction to the manner in which others, not
in the protected class, were treated." Santos claimed URS violated Title VII of the Civil
Rights Act of 1964 and the Florida Civil Rights Act. URS denied all of the allegations. The
plaintiff failed to respond to the court's order to show cause and the case was dismissed
without prejudice, for lack of prosecution on July 7, 2015.
• Primo C Novero v. Duke Energy, URS Energy and Construction, Inc., and CDI
Corporation, No. 4:15-cv-00594, filed in the United States District Court for the Eastern
District of Arkansas (Little Rock) on September 22, 2015.
Novero filed this complaint on September 22, 2015 alleging that his employment with URS
Energy and Construction was wrongfully terminated. According to the complaint, "URS
recruited and hired the Plaintiff as a professional employee to work as a Seismic Walkdown
Engineer (SWE) within the scope of the Nuclear Regulatory Commission's (NRS's)
required Procedure/Guideline and other requirements at Duke's four (4) nuclear plants."
Novero alleged that he`"identified, raised and documented" issues that posed a nuclear
safety concern, and that as a result, he was terminated before his contract expired. The
plaintiff alleged that other team members were not properly trained or qualified to conduct
the work of a Seismic Walkdown Engineer, Novero sought a judgment against the
defendants for no less than $500,000 plus pre-judgment interest. This case is currently
ongoing..
Due to URS Corporation's acquisition of WGI in 2007, and its subsequent name change to URS
Energy and Construction, Kroll also searched for lawsuits naming WGI. Kroll identified over 400
federal lawsuits naming WGI dating back approximately 20 years. The following 13 lawsuits were
filed in the past five years and name WGI as defendant. Kroll can review these cases at the client's
request.
Title Number Court Date Filed ClDosed
Dennis Low v.URS Energy&Construction Inc. 6:2011-cv- U.S.District Court for the Middle
Washington Group International,Inc.,URS 01040 District of Florida(Orlando) 6/22/2011 4/6/2012
Washington Division and Florida Toll Services
Jeff Diehl v.URS Energy and Construction Inc.and 3:2011-cv- U.S.District Court for the 7/12/2011 5/21/2012
Ronnie Walls 00600 Southern District of Illinois(East
St.Louis)
42
Title NuCase
mber Court Date Filed Closed
Herbert La Pointe and Ann La Pointe v.Asbeka 1:2011-cv- U.S.District Court for the
Industries of New York Inc..Washington Group 06272 Southern District of New York 9/8/2011 9!16!2011
International,Inc.—Ebasco Division.et at (Foley Square)
Cyriac,Abraham v Washington Group International, 3:2012-cv- U.S.District Court for the
Inc.,and URS Corporation 00198 Western District of Wisconsin 3/23/2012 3/27/2013
(Madison)
Gerard Gallagher and Kathleen Gallagher v.Allied 2:2012 cv U.S.District Court for the
Glove Corporation,Washington Group International, 01259 Western District of Pennsylvania 8/30/2012 9/6/2012
et al (Pittsburgh)
Eldon E.Amick and Barbara E.Amick v.American 2:2013-cv- U.S.District Court for the
Electric Power Co.,URS Energy and Construction, Southern District of West 3/29/2013 7/29/2014
Inc.,URS Corporation et al 06593 Virginia(Charleston)
Joseph Sullivan and Constance Sullivan v.CBS 1 2013-cv- U.S.District Court for the
Corporation,Washington Group International,Inc.et 02458 Southern District of New York 4/12/2013 5/30/2013
at (Foley Square)
Victor W.Sparks v.4520 Corp.,Inc.,Washington 2:2013-cv- U.S.District Court for the
Group International,Inc.et al 14276 Southern District of West 6/13/2013 6/11/2013
Virginia(Charleston)
Billie Denton v.Air&Liquid Systems Corporation, 3:2013-cv- U.S.District Court for the
Washington Group International,Inc.et al 01243 Southern District of Illinois(East 12/2/2013 4/21/2015
St.Louis)
Charles P.Lockett and Dori Lockett v.AO Smith 32014-cv- U.S District Court for the
Corporation,Washington Group International,Inc.et 00379 i� Northern District of California 1/24/2014 4/16/2015
al (San Francisco)
Sheree Murray v.Air&Liquid Systems Corporation, 4:2014-cv- U.S.District Court for the
Washington Group International,Inc.et al 01638 Eastern District of Missouri(St. 9/22/2014 5/19/2016
• Louis)
Curtis Ard and Judy Ard v.ALFA Laval Inc.,URS 4:2014-cv- U.S.District Court for the
Corporation,et at 01832 Eastern District of Missouri(St. 10/29/2014 11/25/2014
Louis)
Roy A.Siders and Nancy Siders v.20th Century U.S.District Court for the
Glove Corporation of Texas,Washington Group 2:2015-cv- Eastern District of West Virginia 9/18/2015 4/29/2016
International,Inc.,et al 13278 (Charleston)
5.2.2 State
Kroll conducted,"online civil litigation and criminal records searches in available jurisdictions
nationwide dating back approximately five years.145 Kroll also conducted targeted research in
Franklin County, Ohio146 and onsite research in Ada County, Idaho.147 Kroll identified the following
12 state level lawsuits filed against URS Energy and Construction within the past five years. Kroll
can review these lawsuits at the client's request.
Title Case Number Court Date Filed Date
Closed
Fountain Louise,et al v.Arizona Public Service.URS Lo_s Angeles County No
Energy&Construction,Inc.,at al BC462828 Superior Court 6/7/2011 Information
Available
145 Nationwide online searches cover jurisdictions that make their information available in databases. Certain
jurisdictions do not provide their information to these sources.Available information varies from county to county
and state to state. Some jurisdictions only provide information on felonies, and most jurisdictions report
convictions only.
146 Kroll the Court Access Search Engine in Franklin County Municipal Court and the Franklin County Clerk of Courts
for open and closed civil cases naming the subject.
147 Kroll searched the Ada County District Court and Magistrate Court for open and closed general civil,family and
small claims cases as well as felonies and misdemeanors naming the subject from approximately January 1,1996
through May 30,2016.
43
Title Case Number Court Date Flied Date
Closed
Dingman,John and Dingman.Mary Beth v.Kapl,Inc.,
URS Corporation—New York,URS Energy and 0002005/2011 Supreme Court of 2/2/2012 3/17/2016
Construction,Inc.,Bechtel Marine Propulsion Schenectady County
Corporation
Szczerbinksi,Robert S.and Karen A.Szczerbinski v. Supreme Court Civil
OAB Holding,Inc.,URS Energy&Construction,et al 0033042011 Suits for Erie County, 2/14/2012 2/19/2013
New York
Energysolutions Federal EPC,Inc.v.Savannah River Fifth Judicial Court,
Remediation LLC,URS Energy&Construction,Inc., 2012CP4004300 Richland County,South 6/20/2012 10/25/2012
and Washington Group International,Inc. Carolina
Frances Chavers and James Chavers v.Bechtel 10th District Court,
Corporation,URS Energy and Construction Inc.et al 12-CV-1438 Galveston County, 6/28/2012 Active
Texas
Bolanos,Doris v.URS Energy and Construction and SC-45580000- New Jersey Superior
9/21/2012 Active
Adam J.Brower 2012 Court
Szczerbinksi,Robert S.and Karen A.Szczerbinski v. Supreme Court Civil
OAB Holding,Inc.,URS Energy&Construction,et al 0029082012 Suits for Erie County, 2/20/2013 Active
New York
Snyder,Barry T.v.Erie County Industrial 0036602012 Supreme Court Civil
Development Agency.URS Energy&Construction, Suits for Erie County, 8/16/2013 Active
Inc.,et al New/York
i'
Mosher,George W.and Mosher,Lioudmila v.AJ Supreme Court Civil No
Friedman Supply Co.,Inc.,URS Energy& 19046013 Suits for New York 11/22/2013 Information
Construction,at al County,New York Available
Paul Boyce v.Aon Risk Insurance Services West,Inc. Judicial Circuit,City In Appeals
and URS Energy and Construction,Inc. 1522-CC10467 of St.Louis County 8/6/2015 Court
Circuit Court,20"'
Malone,Jerry v.URS Energy and Construction 15C2990 Judicial District, 8/10/2015 8/10/2015
Davidson County
Mei,Frederick v.A.F.Supply Corporation,URS i Supreme Court Civil
Energy&Construction,at al 1903452015 Suits for New York 1/1/2016 Active
County,New York
5.2.3 Bankruptcy %
A nationwide online search of U.S. bankruptcy proceedings identified no records naming URS as
a debtor or creditor.
5.3 Judgments, Liens and UCC Filings
Kroll conducted searches of national databases containing judgments, federal and state tax liens
and Uniform Commercial Codes ("UCC") for records naming URS. Kroll conducted research for
judgments and liens in Ada County, Idaho.148 Kroll also identified the following database records of
judgments and liens naming URS Energy and Construction. Kroll can conduct further research into
the below-listed judgments and liens at the client's request.
Debtor Creditor . Nature Date Filed Filing No. Court/Office Amount Status
URS Energy and Idaho State State Tax Idaho
Construction,Inc. Tax Lien 5/17/2011 T528653 Secretary of $6,857.15 Released
Commission State
148 Kroll searched the Ada County Recorder of Deeds for open and closed federal,state,local tax liens,mechanic's
liens, UCCs,and recorded judgments naming the subject from approximately January 1, 2996 through May 30,
2016. -
44
.
Debtor Creditor, Nature Date Filed Filing No. Court/Office I Amount r Status
i
i
URS Energy and
Construction,Inc. State of State Tax 4/25/2012 201204250478 Sacramento 82,755 Released
and Otay River California Lien County Court
Constructors
URS Energy and
Construction Inc. State of State Tax 5/7/2012 201205071665 Sacramento $2,429 Released
and Otay River California Lien County Court
Constructors
URS Energy and State of New State Tax Albany
Construction,Inc. York Warrant 6/6/2012 E003654973W0027 County Clerk $661 Released
URS Energy and Hudson
Construction,Inc. Doris Civil New County Not Not
and Adam J. Bolanos Filing 9/21/2012 L00455812 Superior Stated Stated
Brower Court
URS Energy and State of New State Tax Torrance Not
Construction,Inc. Mexico Warrant 12/27/2012 2123552 County Clerk $515 Stated
URS Energy and Electrico Inc. Civil 6/7/2013 02C13176473 Anne Arundel $87y 336 Not
Construction,Inc. Judgment Circuit Court Stated
Pulaski
URS Energy and State of State Tax 10/18/2013 07201335548 County $4,775
Not
Construction,Inc. Arkansas Lien Superior Stated
Court
URS Energy and State of State Tax 1/8/2014 63326 Jefferson $2,775
Not
Construction,Inc. Arkansas Lien County Court Stated
URS Energy and State of State Tax 7/17/2014 DN2014085273 Jefferson Not Not
Construction,Inc. Kentucky Lien County Court Stated Stated
URS Energy and
Construction,Inc. St.Louis
AON Risk Paul Boyce Civil New 8/26/2015 1522CC10467 Independent Not Not
Insurance Service Filing City Circuit Stated Stated
West,and Alberici Court
Constructors Inc.
5.4 Patents and Trademarks'
Kroll searched the United/States Patent And Trademark Office ("USPTO"), using the search term
"URS Energy and Construction." Kroll identified the following patents owned by URS Energy and
Construction:
Patent No. Name Inventor(s) Original Assignee Date
Granted
US4848918 A Mixing Apparatus George Kingsley,Christopher Cf Systems Corporation 10/31/1989
Shallice
Ian Drum,Richard S.Madenburg, Home Oil Company
US4332774 A Manufacture of hydrogen Douglas M.Paulsrude,Carrot H. Limited,Morrison- 6/1/1982
sulfide Sherman,Frank G.Turpin,Gerry Knudsen Company,Inc.
A.Wheatcroft
US4735784 A Method of treating fluoride Philip K.Davis,Vijay K.Kakaria Morrison-Knudsen 4/5/1988
contaminated waste Company,Inc.
45
I Patent No. Name Inventor(s) Original'Assignee Date
Granted
US4765257 A Apparatus and method for Ramn Abrishamian,Richard P.de Cf Systems Corporation 8/23/1988
waste disposal Fillippi
US4877530 A Liquid CO2/Cosolvent John M.Moses Cf Systems Corporation 10/31/1989
extraction
Site survey method and James G.Oldham,Charles R. Mk-Ferguson Company,
US5025150 A apparatus Spencer,Carl L.Begley,H.Robert Chem-Nuclear 6/18/1988
Meyer Systems,Inc.
US4994230 A Template method for replacing Martin D.Cepkauskas MK Ferguson Company 2/19/1991
a vessel in a pipe system
US4944444 A Welding or burning shield James S.Renner Mk-Ferguson Company 7/31/1990
US5297182 A Method of decommissioning a Martin D.Cepkauskas M-K Ferguson 3/22/1994
nuclear reactor Company
Pressurized radioactive gas Joseph T Foldyna,Donald J.
US5368633 A treatment system Carpenter,John M.Cron Morrison-Knudson 11/29/1994
Method and apparatus for Washington Group
US7107774 B2 combined cycle power plant Michael J.Radovich 9/19/2006
International,Inc.
operation
•
US D685,164 S Slip simulation shoe cover Patricia Allen URS Energy and 7/2/2013
j
Construction,Inc.
Integration of molten Paul J.Berlowitz,Timothy Andrew Exxonmobil Research
US20140272621 carbonate fuel cells for Barckholtz,S.Allen Erickson,Anita and Engineering 9/18/2014
Al synthesis of nitrogen S.Lee Company
compounds
Using the same search term with the USPTO, Kroll identified the following trademark assigned to
the company:
Serial Number Word Mark Live/Dead Filing'Date Abandonment Date
86121521 NUSOURCE ALLIANCE DEAD 11/18/2013 8/14/2014
5.5 Regulatory Registrations and Actions
5.5.1 Occupational Health and Safety Administration
Kroll searched the Occupational Health and Safety Administration ("OSHA") website for violations
naming URS Energy and Construction dating back approximately five years.
46
Open Date Office Standard,C Red' Penalty
5/16/2012 Calumet City General requirements $7,000
4/9/2014 Charleston Hazard communication -
9/12/2014 Toledo Asbestos $5,000
5/12/2015 Kentucky Respiratory protection -
5.5.2 Securities Industry Regulatory Actions
Kroll searched for any sanctions or actions by governmental or self-regulatory organizations,
including the Financial Industry Regulatory Authority (or its predecessor the National Association
of Securities Dealers), the New York Stock Exchange, the U.S. Securities and Exchange
Commission, the National Futures Association, and the Commodity'Futures Trading Commission.
Kroll identified no adverse records naming URS.
5.5.3 Office of Foreign Assets Control and Watch Lists
URS was not identified on any"watch" lists to which Kroll subscribes. Research used to obtain this
information included a search of both international and national organizations, including but not
limited to the U.S. Department of Treasury's Office of Foreign Assets Control,the United Kingdom's
Financial Conduct Authority, and Interpol, as well as national and international media sources.
5.5.4 United States Tax Court •�
An online search of tax petitions filed from 1986 to the present identified no records naming URS.
47
6. BROOKVILLE EQUIPMENT CO.
6.1 Identification
/
According to its company website, Brookville Equipment Co. ("Brookville"), 749 a locomotive
manufacturer, was founded in 1918.150 During World War I, the company went into full-scale
locomotive production and began producing school buses, ambulances, refrigerated cargo haulers
and other vehicles. The website states that in 1974 the company was purchased and became
Brookville Locomotive.151 According to records maintained by the Pennsylvania Secretary of State,
Brookville was incorporated on June 25, 1974 in Pennsylvania.152 The company changed its name
to Brookville Equipment Co. in 1998.153 /
The company website states that Brookville adapts its machines to keep up with industry trends
and new technology.154 It offers "innovative" options such as regenerative breaking, solid state
IGBT electronic control systems, dry-type exhaust management systems and patented re-railing
technology. 155 Brookville states that it has sold its products to the cities of New Orleans,
Philadelphia and San Francisco in addition to 80 countries throughout the world.156
An article from March 2013 on the SmallBusiness Development Centers website for Pennsylvania
reported that Brookville received a Team Pennsylvania Foundation-sponsored Small Business
Scholarship.157 The $5,000 scholarship was provided to help the company offset the cost of
attending "Governor Tom Corbett's Jobs First Mission to Brazil and Chile," allowing Brookville to
market its products in South America.158
According to an undated page on TheMilwaukeeStreetCar.com, Brookville is currently
manufacturing streetcars for the City of Milwaukee and previously manufactured streetcars for the
City of Dallas.159 A March 2016 article in Metro Magazine stated that Brookville was awarded a
$24.9 million contract to supply five "modern" wireless, battery powered streetcars to Oklahoma
City.160 A National Public Radio report from October 2015 stated that Brookville would not disclose
where it obtains the batteries to power the streetcars.161 In August 2015, The Wall Street Journal
reported that Brookville "pioneered" the battery technology.162
169 Kroll performed searches for the company as "Brookville Equipment," "Brookville Global," "Brookville Mining,"
"Brookville Locomotive"and"Pennbro Corporation."
1" http://www.brookvillecorp.com/history.asp
151 Ibid.
152 Entity number 271569.
153 http://www.brookvillecorp.com/history.asp
'54 http://www.brookvillecorp.com/history.asp
155 Ibid. •
156 Ibid.
157 "Clarion University SBDC Client, Brookville Equipment Corporation, Awarded Scholarship to Aid International
Growth," PASBDC.org, March 25,2013.
158 Ibid.
159 http://www.themilwaukeestreetcar.com/modern_vehicles.php
160 "OKC awards Brookville Equipment$24.9M streetcar contract," Metro Magazine, March 23,2016.
161 "In D.C.And China,Two Approaches To A Streetcar Unconstrained By Wires," National Public Radio,October 22,
2015.
162 "Suppliers Feel Pain as Coal Miners Struggle," The Wall Street Journal,August 30,2015.
48
6.1.1 Affiliated Entities
According to records maintained by the Pennsylvania Secretary of State, Brookville has operated
under the following names:
Entity Name File No: Date of Note
State Incorporation
Brookville Global Pennsylvania 3894342 7/17/2009 Parent company of Brookville Equipment
Holdings Corporation
Brookville Mining 3867369 3/6/2009 Fictitious name of Brookville Equipment
Equipment Pennsylvania Corporation
Brookville 3867369 3/6/2009 Fictitious name of Brookville Equipment
Locomotive Pennsylvania Corporation
Brookville Fictitious name of Brookville Equipment
Locomotive Pennsylvania 2055655 07/16/1945 Corporation
Works
Pennbro 271569 6/25/1974 Prior name of Brookville Equipment
Corporation Pennsylvania Corporation
6.2 Criminal Records and Litigation
6.2.1 Federal
•
Kroll searched U.S. Federal Court indices nationwide back to approximately 1990, depending on
the jurisdiction, for civil litigation and criminal proceedings naming Brookville and its affiliated
entities as a party. Kroll identified the following litigation:164
• Brookville Mining Equipment Corp. and Miller Welding & Machine Co. v. Selective
Insurance Company ofA"merica, No. 2:97-cv-01055-DEZ, filed in the United Stated District
Court for the Western District of Pennsylvania, on June 11, 1997.
This lawsuit was filed over an alleged breach of insurance contract. According to the
opinion filed on July 7, 1999, Brookville and Miller Welding & Machine Co. ("the plaintiffs")
sued Selective Insurance Company of America ("Selective Insurance") for denying an
insurance claim related to flood damage. The opinion stated that on July 19, 1996, flood
waters encroached on the plaintiffs' properties. The plaintiffs contacted an independent
insurance agency, stating that flood waters had already reached their properties when they
requested flood insurance.The insurance agency contacted Selective Insurance, informing
them that flood waters had already reached the plaintiffs' properties.A representative from
Selective Insurance agreed to provide flood insurance coverage starting on July 19, 1996.
The Standard Flood Insurance policies were issued on July 23, 1996, noting that coverage
was in effect on July 19, 1996. On July 22, 1996 the plaintiffs field a notice of claim with
Selective Insurance regarding flood damage to their properties. On December 12, 1996,
Selective Insurance denied coverage, stating that the flood insurance policy was not in full
effect because the plaintiffs filed the claim before the applicable policy forms were
completed and the premiums had been paid.The plaintiffs alleged that Selective Insurance
wrongly denied coverage to them for flood losses.The plaintiffs also alleged that Selective
163 David. G. Oberdick and Brookville Equipment Corporation v. A. L. Lee Corporation, No. 2:13-cv-00059-AJS,
filed in the United States District Court for the Western District of Pennsylvania,on January 11,2013.
164 Kroll also identified a lawsuit, Robert G. Hinton and Rosa Frances Hinton v. International Harvester Co. and
Brookville Equipment, Inc., No. 2:67-cv-00629, in the United States District Court for the Western District of
Pennsylvania, filed on May 18, 1967. No information for the case is available online.At the client's request, Kroll
• will obtain the case fill.
49
•
•
Insurance acted in bad faith. Selective Insurance contended that they considered the flood
loss to be still in progress on July 22, 1996, requiring the plaintiffs to file additional claims
after the flood waters receded. Selective Insurance stated that the plaintiffs failed to do
this.The court found that the plaintiffs were not entitled to coverage because they failed to
file timely proof of their losses. The case was terminated on July 8, 1999.
On August 4, 1999 the plaintiffs filed a notice of appeal. On December 23, 1999 the
plaintiffs and Selective Insurance filed a stipulation, and the case was dismissed. Online
records do not state whether the case was dismissed with or without prejudice.
• Perry Thatcher, et al v. Brookville Equipment Corporation, No. 7:12-cv-00050-ART-EBA,
filed in the United States District Court for the Eastern District of Kentucky, on May 21,
2012.
•
This was a product liability lawsuit filed by Perry and Edna Thatcher ("the administrators"),
administrators of the estate of Ryan Keith Thatcher ("Thatcher"). According to the
complaint, Thatcher was operating a mining locomotive manufactured by Brookville when
he was killed in an accident. The administrators stated that Thatcher was an experienced
operator of mining locomotives. The complaint stated that at the time of the accident, the
mining locomotive Thatcher operated was pulling two loaded flat cars. The administrators
alleged that in order to make sure the two cars would clear the mine roof structure,Thatcher
"positioned himself in a manner such that his head protruded through a retractable hatch
in the locomotive's protective canopy. As the locomotive travelled forward at a low rate of
speed, Mr. Thatcher's head became trapped between the locomotive's canopy and a
ventilation overcast attached to the roof of the mine,"causing his death.The administrators
contended that Brookville's mining locomotive provided inadequate visibility both in front
of and behind the train's operator. They further alleged that the locomotive was designed
in an "unreasonably dangerous" way because the locomotive lacked a mechanism to
prevent operation when the canopy safety hatch was not fully closed and when the operator
was not seated.The administrators asked for,$75,000 or more in damages. Brookville filed
an answer on June 15, 2012 alleging that Thatcher had been negligent and the lawsuit
was barred by the Kentucky Workers' Compensation Act and the administrators'failure to
mitigate damages.
On August 28, 2012, Zurich American Insurance Company ("Zurich") filed an intervening
complaint. The complaint stated that Thatcher held a Zurich Workers' Compensation
Insurance Benefits policy. According to the complaint, Zurich had paid out$70,916 for the
policy. Zurich asked for reimbursements for all benefits it had paid or would pay that were
caused by Brookville's alleged negligence in designing the locomotive.On August 30, 2012
Brookville answered the intervening complaint, denying the allegations.
On October 25, 2012 Brookville filed a third party complaint against Martin County Coal
Corporation, Alpha Natural Resources Inc. and Pilgrim Mining Company Inc. ("the third
party defendants"), the companies who operated the mine where Thatcher worked.
Brookville alleged that the third party defendants failed to train Thatcher in the hazards of
transporting supplies through close overhead clearances and failed to train him regarding
exiting the operator's compartment while the locomotive was in motion. Brookville further
stated that the third party defendants failed to maintain safety by installing close clearance
signs or lights to alert mine personnel to abrupt changes in overhead clearance.According
to the third party complaint, this was a substantial factor in Thatcher's accident and
subsequent death. Brookville asked for a judgment for indemnity against the third party
defendants, or for the court to require the third party defendants pay damages to the
administrators. On December 13, 2012 the third-party defendants filed an answer to the
third party complaint denying that Alpha Natural Resources, Inc. engaged in the operation
of the mine. They also denied that Thatcher was injured while "acting within the scope of
his employment." The answer did not state additional details on how they alleged Thatcher
was injured and killed. The third party defendants denied safety issues at the mine and
claimed that Brookville caused Thatcher's death through its equipment.
50
On October 18, 2013 Brookville filed a notice of settlement. The case was discontinued
with prejudice on October 22, 2013.
• David. G. Oberdick and Brookville Equipment Corporation v. A. L. Lee Corporation, No.
2:13-cv-00059-AJS, filed in the United States District Court for the Western District of
Pennsylvania, on January 11, 2013.
The complaint in this patent lawsuit alleged that A. L.Lee Corporation ("A. L. Lee")infringed
on one of Brookville's patents. Specifically, it alleged that A. L. Lee's "15 Ton Battery
Locomotive" and "Rail Runner (Battery)" can be manufactured with an optional "rerailer"
feature that infringes on at least one claim of a Brookville patent. Brookville stated that it
notified A. L. Lee of the patent infringement through its legal counsel on or about November
2, 2011. The complaint alleged that A. L. Lee responded by saying that they had not
infringed on the patent, and continued to sell the "15 Ton Battery Locomotive" and "Rail
Runner (Battery)" locomotives. On April 1, 2013, Brookville and A. L. Lee agreed to
mediation. On April 4, 2013 A. L. Lee filed an answer, denying any patent infringement. On
the same date, A. L. Lee also sought a judgment declaring that it was not infringing on
Brookville's patent. On June 2, 2013 the court received a mediation report stating that the
case had been resolved, and the case was dismissed the following day.
According to commercial records, A. L. Lee filed a case with the Patent Trial and Appeal
Board.165 The July 15, 2013 decision stated that Brookville and A. L. Lee filed a confidential
settlement agreement and a joint motion to terminate the proceedings. The court granted
the termination and the request to keep the settlement agreement confidential.
Kroll identified the following administrative settlement agreement naming Brookville:
• In the Matter of Brookville Equipment Corporation, No. AED/MSEB 8191, filed with the
United States Environmental Protection Agency Air Enforcement Division, Washington,
D.C. on an unstated date.
This was an Environmental Protection Agency ("EPA") action related to an alleged violation
of the Clean Air Act.According to the administrative settlement agreement,filed on July 30,
2015 Brookville failed to obtain Certificates of Conformity for newly manufactured
locomotives. The Clean,Air Act states that manufacturers must obtain a Certificate of
Conformity for each engine family in each new model year, to ensure that all locomotives
comply with EPA,pollution standards. The EPA alleged that around February 2011,
Brookville entered into a contract with the South Florida Regional Transpiration Authority
to produce 12 diesel-electric passenger locomotives. The EPA stated that Brookville
delivered 11 of these locomotives between September 2013 and May 2014 and did not
submit an application for a Certificate of Conformity to the EPA until February and March
of 2014 respectively. The EPA stated that in December 2014, Brookville informed the EPA
that it had already provided the locomotives to the South Florida Regional Transpiration
Authority. The EPA alleged that Brookville violated the Clean Air Act by delivering the 11
locomotives before obtaining a certificate of conformity.According to the terms of the July
30, 2015 settlement agreement, Brookville neither admitted nor denied the alleged violation
of law, but agreed to pay a penalty of$202,000.
6.2.2 State
Kroll conducted online civil litigation and criminal records searches in available jurisdictions
nationwide.766 Kroll also conducted onsite research in Jefferson County, Pennsylvania167 for any
165 Case No. IPR2013-00245.
166 Nationwide online searches cover jurisdictions that make their information available in databases. Certain
jurisdictions do not provide their information to these sources.Available information varies from county to county
and state to state. Some jurisdictions only provide information on felonies, and most jurisdictions report
convictions'only.
167 Kroll searched the Court of Common Pleas from January 1, 1996 through May 24,2016.
51
matters naming Brookville that were filed in the last 20 years. Kroll identified the following state
level lawsuits filed against Brookville:
• Fred P. Killingsworth Jr. vs. Oak Grove Resources LLC !Brookville Equipment
Corporation!, No. CV-2006-003048.00, filed in the Circuit Court for Jefferson County,
Alabama, on May 24, 2006.
According to the docket,this was a workmen's compensation lawsuit.The second amended
complaint,168 filed on June 27, 2007 alleged that Fred Killingsworth ("Killingsworth") was
injured in the course of his work at Oak Grove Resources LLC. Killingsworth stated that he
was injured while operating a locomotive, which was manufactured and sold by Brookville.
Killingsworth alleged that Brookville negligently engineered the locomotive and failed to
place sufficient warnings on it.According to Killingsworth, he suffered "great physical pain
and mental and emotional anguish, stress, humiliation and embarrassment"and lost wages
and earning capacity due to Brookville's negligence in designing the locomotive. On August
27, 2007, Brookville filed an answer to the second amended complaint, denying all
allegations. On April 29, 2008 the court filed a satisfaction of judgment naming Janet
Killingsworth, the administrator of Killingsworth's estate, as creditor. The docket contained
no information regarding amount of the judgment. The parties stipulated to a dismissal on
July 16, 2008. On July 21, 2008 Brookville was dismissed from the case with prejudice.
The case was dismissed with prejudice on July 23, 2008.At the client's request, Kroll can
conduct onsite research to identify more information about the judgment.
• Joe N. Saxton, et al v. Brookville Equipment Corporation, et al, No. CV-2007-000028.00,
filed in the Circuit Court of Jefferson County, Alabama Bessemer Division, on January 8,
2007.
The complaint for this negligence case stated that Joe Saxton and the other plaintiffs,
employees of Oak Grove Resources ("the plaintiffs"), were riding in a "Man Bus" when it
was struck by a locomotive manufactured by Brookville. This collision occurred in the Oak
Grove Mine. The plaintiffs alleged that they sustained significant injuries caused by
Brookville's negligence, as the breaks and other safety systems of the locomotive did not
function.The plaintiffs stated that•the locomotive's operator was unable to slow it down and
that it was not equipped with a signal to warn others of its approach. The plaintiffs asked
for punitive damages related to physical injuries they had received from the crash,
psychological problems resulting from the crash and payment for hospital bills. Brookville's
answer, filed on February 15, 2007, denied the allegations.The answer also stated that the
locomotive manufactured by Brookville may have been subsequently altered. On October
12, 2007 the court'dismissed the case with prejudice.
• MotivePower Inc. v. South Florida Regional Transportation Authority, et al (Brookville
Equipment Corp.!, No. CACE11004431, filed in Broward County Circuit Court, Florida on
February 23, 2011.
This is a dispute regarding the award of a contract worth approximately $100 million, to
manufacture locomotives for the regional Tri-Rail system in Florida. According to the
complaint, MotivePower, Inc. ("MotivePower") alleged that Brookville's bid for the South
Florida Regional Transportation Authority ("SFRTA") did not conform to its Invitation to Bid.
MotivePower alleged that its bid was the only one to conform to the Invitation to Bid. The
complaint also states that Brookville was given an unfair competitive advantage when it
was allowed to make material alterations to its bid after the deadline had passed.
Specifically, MotivePower alleged that Brookville's locomotives did not meet the "service
proven" standard,which required the locomotive model in each bid to already be in service
and producing revenue elsewhere. MotivePower stated that Brookville submitted
specifications for locomotives that were significantly different than the ones it claimed were
service proven. MotivePower asked the court for a temporary injunction to prevent
168 At the time the complaint and first amended complaint were filed, Brookville's role was unknown and it was
referred to as a John Doe Corporation.The complaint and the first amended complaint contain substantively the
same information as the second amended complaint.
52
Brookville from commencing work on its locomotives. On March 22, 2011 a stipulation of
voluntary dismissal with prejudice was filed.
Kroll identified adverse media related to the case. A February 2011 PalmBeachPost.com
article referred to Brookville as "a small vendor with little experience in building commuter
train locomotives that uses an old technology in decreasing use across the United
States."169 The article supported MotivePower's bid and stated that the Brookville trains
would be less expensive to buy, but would cost taxpayers "far more to run" than
MotivePower's "newer, more-efficient train engines."170 The article criticized the SFRTA's
decision to go with the less expensive, less energy efficient locomotives.Adam Babington,
Vice President of the Florida Chamber was quoted in the article as saying "It's a
shortsighted decision... It's been frustrating to see the obstacles and resistance [the
SFRTA] have put up to a fresh approach."171 Florida's State Senate budget chief, J. D.
Alexander was quoted as saying that choosing Brookville's bid appeared to be a
"sweetheart deal."172 According to a February 2011 article in Sunshine State News,
unnamed Florida state lawmakers and members of the Florida Chamber of Commerce sent
SFRTA letters "expressing concern" about the bidding process for the'locomotives.173
• Brookville Equipment Corp., The Cincinnati Enquirer and CAF USA, Inc. vs. City of
Cincinnati, No.A-1204469, in the Hamilton County Court of Common Pleas, Ohio, filed on
June 20, 2012.
According to an opinion filed for the case on August 15, 2012, this was a dispute over the
release of project bid information. In September 2011, Cincinnati issued a request for
proposals for the construction of a streetcar system. The request included a notice that
documents submitted to the city would be .subject to disclosure under Ohio's Public
Records Act, but that certain information, such as trade secrets, would be exempt from
disclosure. According to the opinion, Brookville submitted a proposal and later the
Cincinnati Enquirer made a public records request. Cincinnati allowed Brookville to redact
its proposal to remove trade secrets, and those redacted documents were given to the
Cincinnati Enquirer. The opinion,,states that the Cincinnati Enquirer made requests for
unreacted documents. Cincinnati informed Brookville that it planned to turn over
underacted documents to The Cincinnati Enquirer and Brookville filed a lawsuit to stop the
disclosure. Another company, United Streetcar LLC, also filed suit, and that lawsuit was
consolidated with Brookville's. The court refused to block the release of the information
and Brookville appealed the decision.
The case was appealed to the Court of Appeals of Ohio, First Appellate District, Hamilton
County. According to the opinion filed on August 15, 2012, the appeals court upheld the
decision of the trial court.
•
6.2.3 Bankruptcy
A nationwide online search of U.S. bankruptcy proceedings identified no records naming Brookville
as a debtor or creditor.
6.3 Judgments, Liens and UCC Filings
Kroll conducted searches of national databases containing judgments, federal and state tax liens
and Uniform Commercial Codes ("UCC") for records naming Brookville. Kroll conducted research
for judgments and liens in Jefferson County, Pennsylvania.174
Kroll identified the following judgments and liens naming Brookville or its affiliates:
169 'South Florida's Tri-Rail set to make controversial locomotive buy," PalmBeachPost.com, February 25,2011.
170 Ibid.
171 Ibid.
172 Ibid.
173 http://www.sunshinestatenews.com/story/bidder-tries-blow-tri-rail-locomotive-deal
174 Kroll searched the Court of Common Pleas from January 1, 1996 through May 24, 2016.
53
Date
Debtor Creditor Nature Filed, ■ Filing,No: Court/Office Amount Status
Brookville Equipment
Corporation,Natural Jefferson-
Civil
Resources Partners LP, "Joe NN January CV200700002 Bessemer
Pinoak Resources LLC Saxton" New 8,2007 8 Circuit Court, Not stated Not stated
and Questor Filing Alabama
Management Co LLC
State August Jefferson
Brookville Equipment State of Tax 13, 2007-00721 County, $164,827.5 No release
Inc. Pennsylvania Lien 2007 Pennsylvania 0 located
State Released
Brookville Equipment State of Tax May 28, 201005281029 Sacramento $6 389 on an
Corp. California Lien 2010 County Court unstated
date
Kroll identified the following waivers of rights to file mechanics' liens, naming Brookville or its
affiliates.According to these records,various contractors waived their rights to file mechanics'liens
against Brookville or its affiliates:
' .Owner Contractor Nature Date Filed FNo 9 ' Location
•
Brookville Equipment Waiver of Right August 11, 1997- Jefferson County.
Corporation Charles H.Dobson to File Mechanic 1997 05094 Pennsylvania
Lien
Brookville Equipment Waiver of Right November 7, 2006- Jefferson County,
Corporation and Jefferson Dobson Incorporated to File Mechanic 2006 05302 Pennsylvania
County Development Council Lien
Brookville Equipment Waiver of Right November 7, 2006- Jefferson County.
Corporation and Jefferson Jewell Electric Inc. to File Mechanic 2006 05304 Pennsylvania
County Development Council Lien
Brookville Equipment Waiver of Right
Corporation and Jefferson Lutons Plumbing Heating to File Mechanic November 7, 2006- Jefferson County,
County Development Council 8.Air Conditioning Lien 2006 05305 Pennsylvania
Brookville Equipment Waiver of Right November 7, 2006- Jefferson County,
Corporation and Jefferson Wheelabrator Group to File Mechanic 2006 0506 Pennsylvania
County Development Council Lien
Brookville Equipment G W People Contracting Waiver of Right November 7, 2006- Jefferson County,
Corporation and Jefferson Company Inc. to File Mechanic 2006 05307 Pennsylvania
County Development Council Lien
Brookville Equipment Waiver of Right November 2006- Jefferson County.
Corporation and Jefferson Eagle Contracting to File Mechanic 30,2006 05320 Pennsylvania
County Development Council Lien
Brookville Equipment Compressed Air Waiver of Right November 2006- Jefferson County,
Corporation and Jefferson Specialists Company to File Mechanic 30,2006 05321 Pennsylvania
County Development Council T/D/B/A Casco USA Lien
' Brookville Equipment Waiver of Right
Corporation and Jefferson Guardian Protection to File Mechanic November 2006- Jefferson County,
County Development Council Services Inc. Lien 30,2006 05322 Pennsylvania
Brookville Equipment Waiver of Right December 2006- Jefferson County,
Corporation and Jefferson Shirey Overhead Doors to File Mechanic
21.2006 05344 Pennsylvania
County Development Council Lien
Brookville Equipment Waiver of Right December 2006- Jefferson County,
Corporation and Jefferson Progressive Crane LLC to File Mechanic 21,2006 05346 Pennsylvania
County Development Council Lien
Brookville Equipment Clara Cressley T/D/B/A Waiver of Right December 2006- Jefferson County,
Corporation and Jefferson CMC Construction to File Mechanic 21,2006 05345 Pennsylvania
County Development Council Lien
Brookville Equipment Waiver of Right December 2006- Jefferson County,
Corporation and Jefferson Doug Olson to File Mechanic
22,2006 05347 Pennsylvania
County Development Council Lien
54
Kroll identified the following UCC filings naming Brookville or its affiliates:
Debtor Creditor • Nature Date Filed Filing No. Location Collateral Status
"Savings& Pennsylvani
Pennbro Trust Original March 23. 12360316 a Secretary Not stated Not stated
Corporation Company of UCC Filing 1984 of State
Pathe"
Brookville Pennsylvani Terminated
Locomotive Bk" Original November 9, 16780704 a Secretary Not stated September
Pennbro UCC Filing 1988
Corp. of State 14,1993
Continuatio Pennsylvani
Pennbro Savings& n of UCC March 14, 17060667 a Secretary Not stated Not stated
Corporation Trust Co. Filing 1989 of State
"The Savings Pennsylvani
Pennbro &Trust Co of Original March 30, 17181918 a Secretary Specified industrial Not stated
Corporation PA" UCC Filing 1989 of State equipment/machinery
Brookville Savings& Pennsylvani
Locomotive Trust Co.of Original February 27, 18240847 a Secretary Not stated Not stated
and Pennbro Pennsylvania UCC Filing 1990 of State
Corporation
Specified equipment,
/inventory,general
Savings and Pennsylvani intangible(s),chattel
Pennbro Trust Co.of Original August 27, 18860720 a Secretar y paper,contract rights Not stated
Corp. Pennsylvania UCC Filing 1990 of State and account(s),
including proceeds
and products
All equipment,
Brookville inventory,general
Mining Original March 21, Pennsylvani intangible(s),chattel
Equipment S&T Bank UCC Filing 1991 19511583 a Secretary paper,contract rights Not stated
Corp. of State and account(s),
including proceeds
and products
Specified equipment,
inventory,general
Brookville intangible(s),chattel
Mining Original Pennsylvani
9 final
g S&T Bank April 20, 1992 20720591 a Secretary paper,contract rights Not stated
Equipment UCC Filing of State and specified
Corp. account(s)including
proceeds and
/ products
Specified inventory,
Brookville general intangible(s),
Mining Original February 25, Pennsylvani chattel paper,
Equipment PNC Bank NA UCC Filing 1993 21690529 a Secretary contract rights and Not stated
Corp. of State account(s),including
proceeds and
products
Brookville Beckwith / Pennsylvani Specified equipment
Original and specified
Mining Machinery UCC Filing April 25,1995 24220035 a Secretary construction Not stated
Equipment Co. of State
equipment/machinery
Brookville UCC
Mining Original January 17, Pennsylvani Continuatio
Equipment S&T Bank UCC Filing 1996 1996-02017 a Not stated n filed
Co. September
19,2000
•
Equipment,inventory,
Brookville general intangible(s),
Mining Original January 18, Pennsylvani chattel paper,
Equipment S&T Bank UCC Filing 1996 25071149 a Secretary contract rights and Not stated
Corporation of State account(s),and
proceeds and
products
Brookville North Central
Mining Pennsylvania Original February 16, Pennsylvani
Equipment Regional UCC Filing 1996 1996-000715 a Not stated Not stated
Inc. Planning&
Dev.
Brookville North Central
Mining Pennsylvania Original February 16, 1996-02049 Pennsylvani Not stated Not stated
Equipment UCC Filing 1996 a
Inc. Reg.
55
i
Debtor Creditor Nature Date Filed Filing No. Location Collateral Status
-
"North Central Not stated,
Brookville Pennsylvania would have
Mining Regional Original February 20, Pennsylvani expired on
Equipment Planning& UCC Filing 1996 25171116 a Secretary Equipment February
Inc. Development of State 20,2001 if
C" still active
Brookville Amendment Pennsylvani
Mining March 14,
Equipment S&T Bank to UCC 1996 25251380 a Secretary Not stated Not stated
Corporation Filing of State
Brookville Amendment Pennsylvani
Mining March 14,
Equipment S&T Bank to UCC 1996 25251378 a Secretary Not stated Not stated
Corporation Filing of State
Brookville Termination Pennsylvani Terminated
Mining PNC Bank NA of UCC April 17,1996 25361426 a Secretary Not stated on April 17,
Equipment Filing of State
Corp. 1996
Brookville A W Miller
Mining Tech Sales Original September 16, 1996-02296 Pennsylvani Not stated Not stated
Equipment Inc. UCC Filing 1996 a
Co.
Brookville A W Miller Pennsylvani Expired on
Mining Tech Sales Original September 23, 25880232 a Secretary Equipment and September
Equipment Inc. UCC Filing 1996 of State proceeds 23,2001
Brookville A W Miller Termination Pennsylvani Terminated
Mining Tech Sales of UCC April 28,1997 26620260 a Secretary Not stated April 28,
Equipment Inc. Filing of State 2007
Brookville
Mining S&T Bank Original December 5, 1997-02383 Pennsylvani Not stated Not stated
Equipment UCC Filing 1997 / a
Co. /
Brookville
Mining S&T Bank Original December 5, 1997-007186 Pennsylvani Not stated Not stated
Equipment UCC Filing 1997 a
Co.
/ Equipment,fixtures,
inventory,general
Brookville intangible(s),chattel
Mining Original December 9, Pennsylvani paper,contract rights,
Equipment S&T Bank UCC Filing 1997 28291727 a Secretary accounts receivable, Not stated
Corporation !r of State machinery,business
machinery/equipment
,account(s)and
other,and proceeds
Not stated,
Brookville US Small Equipment,fixtures, filing would
Mining Business Original Pennsylvani inventory,accounts have
Equipment Ad Business UCC Filing March 3,1998 28621288 a Secretary receivable and expired on
Corporation n of State machinery,and March 4,
proceeds 2003 if still
active
Brookville Jefferson Pennsylvani
Mining County Original July 30, 1998 29221206 a Secretary Equipment Not stated
Equipment Development UCC Filing
Corporation Council Inc. of State
Brookville Continuatio Pennsylvani
Mining S&T Bank n of UCC September 20, 3381010 a Secretary Not staled Not stated
Equipment Filing 2000 of State
Corporation
All equipment,
Brookville Original January 17, Pennsylvani inventory,general
Equipment S&T Bank UCC Filing 2002 34830522 a Secretary intangible(s),chattel Not stated
Corporation of State paper and account(s),
and proceeds
Brookville Capital Assignment Pennsylvani
Mining March 13,
Equipment Crossing of UCC 2002 3610711 a Secretary Not stated Not stated
Corporation Bank Filing of State
Brookville Continuatio Pennsylvani
Mining S&T Bank n of UCC June 13,2002 36341746 a Secretary Not stated Not stated
Equipment Filing of State
Corporation
Brookville Capital Continuatio Pennsylvani
Mining October 22,
Equipment Crossing n of UCC 2002 3676512 a Secretary Not stated Not stated
• Corporation Bank Filing of State
56 •
Debtor Creditor 1, Nature Date Filed Filing No. Location Collateral i, Status
Brookville Beckwith Original March 31, Pennsylvani
Equipment Machinery UCC Filing 2003 20030300389 a Secretary Equipment Not stated
Corporation Company of State
Brookville Beckwith Ori anal March 31, Pennsylvani
9
Equipment Machinery UCCFiling 2003 20030300369 a Secretary Equipment Not stated
Corporation Company of State
Brookville Beckwith Termination Pennsylvani Terminated
Equipment Machinery of UCC May 8,2003 20030457948 a Secretary Not stated May 8,2003
Corporation Company Filing of State
Brookville Beckwith Termination Pennsylvani Terminated
Equipment Machinery of UCC October 29, 20031049577 a Secretary Not stated October 29,
Corporation Company Filing 2003 of State 2003
Brookville Capital Termination Pennsylvani Terminated
Mining January 4, 200501110269
Crossing of UCC a Secretary Not stated January 4,
Equipment Bank Filing 2005 5 of State 2005
Corporation
Brookville Continuatio Pennsylvani
Mining August 29, 200508310018
Equipment S&T Bank n of UCC 2005 0 a Secretary Not stated Not stated
Corporation Filing of State
Brookville Cummins Pennsylvani
Mining Bridgeway Original April 7,2006 200604120290 a Secretary Not stated Not stated
Equipment LLC UCC Filing 0 of State
Brookville Continuatio Pennsylvani
200607310035
Equipment S&T Bank n of UCC July 27,2006 6 a Secretary Not stated Not stated
Corporation Filing of State
Brookville Continuatio Pennsylvani
Equipment S&T Bank n of UCC September 24, 200709240234 a Secretary Not stated Not stated
Corporation Filing 2007 9 of State
Hewlett- Equipment,general
Brookville Packard Pennsylvani intangible(s),
Equipment Financial Original April 9,2009 200904090576 a Secretary computer equipment Not stated
Corporation Services UCC Filing 5 of State and account(s),and
Company proceeds
Department of
Brookville Pennsylvani Equipment and
Equipment Community Original August 10, 200908110045 a Secretary machinery,and Not stated
Corporation and Economic UCC Filing 2009 3 of State proceeds
Development
Brookville Continuatio Pennsylvani
Equipment S&T Bank n of UCC July 21,2010 20100 2 10133 a Secretary Not stated Not stated
Corporation Filing of State
Brookville Pennsylvani
Mazak Original September 14, 201009140681 Leased equipment
Equipment Corporation UCC Filing 2010 2 a Secretary and proceeds Not stated
Corporation of State
Brookville Continuatio Pennsylvani
Equipment S&T Bank n of UCC August 10, 201108100201 a Secretary Not stated Not stated
Corporation Filing 2011 8 of State
Brookville / Termination Pennsylvani
Mazak September 30, 201109300516
Equipment Corporation of UCC 2011 9 a Secretary Not stated Not stated
Corporation Filing of State
Equipment,fixtures,
Brookville Pennsylvani inventory,general
Original 201205041147 intangible(s),chattel
Equipment S&T Bank UCC Filing May 4,2012 6 a Secretary paper,assets and Not stated
Corporation of State
account(s)and
proceeds
Brookville Pennsylvani
Equipment Trumpf Inc. Original June 6,2012 201206060819 a Secretary Equipment Not stated
Corporation UCC Filing 6 of State
Department of
Brookville Termination Pennsylvani Terminated
Community 201206200291
Equipment of UCC June 19,2012 a Secretary Not stated June 19,
Corporation and Economic Filing 6 of State 2012
Development
Brookville Termination Pennsylvani Terminated
Equipment Trumpf Inc. of UCC August 20, 201208200471 a Secretary Not stated June 19,
Corporation Filing 2012 2 of State 2012
57
I
Debtor Creditor Nature Date Filed Filing No. Location: i Collateral Status
Brookville Continuatio Pennsylvani
Mining September 11, 201209110452
Equipment S&T Bank n of UCC 2012 5 a Secretary Not stated Not stated
Corporation Filing of State
Northwest
Laborers- Brookville Original September 16, Washington
Employers Equipment UCC Filing 2013 201325992968 Secretary of Not stated Not stated
Training Corporation State
Trust Fund
Brookville Continuatio Pennsylvani
Mining August 20,
Equipment S&T Bank n of UCC 2015 201508280075 a Secretary Not stated Not stated
Corporation Filing • of State
Equipment,fixtures,
Brookville Pennsylvani inventory,computer
Equipment M-2 Rail Original March 25, 201603250062 a Secretary equipment,vehicles Not stated
Corporation UCC Filing 2016 6 of State and account(s),
including proceeds
and products
6.4 Patents and Trademarks
Using the search terms"Brookville Equipment,""Brookville Global,""Brookville Mining," "Brookville
Locomotive" and "Pennbro." Kroll searched the United States Patent and Trademark Office and
identified the following United States patents currently registered to Brookville:
Patent'Number Date Title Assignee
US5743190 June 13, 1996 Rerailer apparatus Brookville Mining Equipment
Corporation
US6193035 November 30, Trolley pole support apparatus with variable Brookville Mining Equipment
1998 length moment arm Corporation
US5743190 September 30, Rerailer apparatus Brookville Equipment
2001 Corporation
Publication May 5,2010 Filter Regeneration System and Method Brookville Equipment
20100281852175 Corporation
Using the same search terms, Kroll identified no trademarks assigned to Brookville.
6.5 Regulatory Registrations and Actions
6.5.1 Securities Industry Regulatory Actions
Kroll searched for any sanctions or actions by governmental or self-regulatory organizations,
including the Financial Industry Regulatory Authority (or its predecessor the National Association
of Securities Dealers), the New York Stock Exchange, the U.S. Securities and Exchange
Commission, the National Futures Association, and the Commodity Futures Trading Commission.
Kroll identified no adverse records naming Brookville.
6.5.2 Office of Foreign Assets Control and Watch Lists
15 This patent has not yet been awarded.
58
Brookville was not identified on any"watch"lists to which Kroll subscribes. Research used to obtain
this information included a search of both international and national organizations, including but
not limited to the U.S. Department of Treasury's Office of Foreign Assets Control, the United
Kingdom's Financial Conduct Authority, and Interpol, as well as national and international media
sources.
6.5.3 United States Tax Court
An online search of tax petitions filed from 1986 to the present identified no records naming
Brookville.
•
•
•
59
7. APPENDIX ONE — JOHN LAING INVESTMENTS
7.1 Investment Subsidiaries
Companies which are wholly-owned:
United Kingdom:
• Croydon PSDH Holdco 2 Limited
• Croydon PSDH Holdco Limited
• John Laing Cambridge Limited
• John Laing Infrastructure Limited
• John Laing Investments New Zealand Holdings Limited
• John Laing Investments Overseas Holdings Limited
• John Laing Projects & Developments (Croydon) Limited
• John Laing Projects & Developments (Holdings) Limited
• John Laing Social Infrastructure Limited
• Laing Investment Company Limited
Overseas:
• John Laing 1-4 Holdco Corp
• John Laing Investments East West Link BV
• John Laing Investments Netherlands Holdings BV
• John Laing Investments NGR BV
• John Laing Investments NRAH BV
• John Laing Investments Perth Stadium BV
7.2 Project Companies
Companies which are wholly-owned unless otherwise specified.
United Kingdom:
• Agility Trains West Limited (24 per cent)
• Agility Trains East Limited (30 per cent)
• Alder Hey (Special Purpose Vehicle) Limited (40 per cent)
• Aylesbury Vale Parkway Limited (50 per cent)
• Burton Wold Extension Limited
• Branden Solar Parks Limited
• Carscreugh Renewable Energy Park
• City Greenwich Lewisham Rail Link plc (52 per cent)
• CountryRoute (A130) plc
• Croydon and Lewisham Lighting Services Limited (50 per cent)
• CCURV LLP (50 per cent)
• Dreachmhor Wind Farm Limited
• Defence Support (St Athan) Limited
• Forum Cambridge LLP (50 per cent)
• Healthcare Support (Erdington) Limited
• INEOS Runcorn (TPS) Limited (37.43 per cent)
• Inspiral Oldham Limited (95 per cent)
• John Laing (Croydon Development Company) LLP
John Laing Rail Infrastructure Limited
• Laing/Gladedale (Hastings) Limited (50 per cent)
• Laing/Gladedale (St Saviours) Limited (50 per cent)
• New Albion Wind Ltd
• Regenter Myatts Field North Limited (50 per cent)
60
• Services Support (BTP) Limited (54.17 per cent)
• Services Support (Cleveland) Limited (27.08 per cent)
• Severn River Crossing plc (35 per cent)
• Speyside Renewable Energy Partnership Hold Co Limited (23.43 per cent)
• Surrey Lighting Services Limited (50 per cent)
• UK Highways A55 Limited (50 per cent)
• UK Highways Limited (50 per cent)
• Viridor Laing (Greater Manchester) Limited (50 per cent)
• Wear Point Wind Limited
Overseas:
• Al Mobil GmbH & Co. KG (42.5 per cent)
• A-Lanes Al 5 BV (28 per cent)
• Denver Transit Partners LLC (45 per cent)
• Dhule Palesner Tollway Limited (36 per cent)
• Gdansk Transport Company Limited (29.69 per cent)
• 1-4 Mobility Partners Op Co LLC (50 per cent)
• NGR Project Company Pty Limited (40 per cent) /
• MAK Macsek Autopalya Koncesszios Zrt (30 per cent)
• SA Health Partnership Nominees Pty Limited (17.26 per cent)
• Securefuture Wiri Limited (30 per cent)
• SPC Management Services BV(33.33 per cent)
• Rammeldalsberget Vindkraft AB
• Swartvallsberget SPW AB /
7.3 Directors' UK Appointments
7.3.1 Chris Waples
Waples has the following current appointments:
Company name Status Position Date of appointment
John Laing Limited Active Director Appointed August 13,2007
John Laing Investments Limited Active Director Appointed September 1,2007
John Laing Infrastructure Limited Active Director Appointed December 11, 2007
John Laing Social Infrastructure Limited Active Director Appointed December 11, 2007
Modus Services(Holdings)Limited16 Active Director Appointed April 1, 2008
Modus Services Limited Active Director Appointed April 1, 2008
Laing Property Holdings Limited Active Director Appointed July 14, 2008
Sebergham Nominees Limited Active Director Appointed July 14, 2008
Laing Investments Management Services Limited Active Director Appointed December 1, 2009
7.3.2 Patrick O'Donnell Bourke
O'Donnell Bourke has the following current appointments:
Company name Status Position Date of appointment
John Laing Limited Active Director Appointed May 1, 2011
John Laing Services Limited Active Director Appointed May 1, 2011
Laing Property Holdings Limited Active Director Appointed May 1, 2011
Laing Investments Management Services Limited Active Director Appointed May 10,2011
John Laing Investments Limited Active Director Appointed August 17, 2011
Affinity Water Limited Active Director Appointed July 24, 2013
John Laing Group plc Active Director Appointed January 16,2015
John Laing Holdco Limited Active Director Appointed January 26,2015
18 Modus Services is a joint venture between Innisfree and John Laing.
• 61
7.3.3 Derek Potts
Potts has the following current appointments:
Company name Status Position Date of appointment
John Laing Investments Limited Active Director Appointed August 3, 2001
Laing Infrastructure Holdings Limited Active Director Appointed October 31,
2001
John Laing Infrastructure Limited Active Director Appointed March 22, 2002
Hungary M6 Limited Active Director Appointed March 28, 2002
John Laing Limited Active Director Appointed September 1,
2004
Laing Investments Management Services(Canada) Active Director Appointed August 17,
Limited 2006
John Laing Social Infrastructure Limited Active Director Appointed December 11,
2007
Laing Investments Management Services Appointed February 25,
(Singapore)Limited Active Director 2008
Sebergham Nominees Limited Active Director Appointed July 14,2008
Laing Investments Management Services Limited Active Director Appointed February 7,
2011
Laing Investments Management Services(Australia) Active Director Appointed June 10, 2013
Limited
7.3.4 Carolyn Cattermole
Cattermole has the following current appointments: f
Company name Status Position Date of appointment
DS Smith B.V. Active Director Appointed July 25, 2005
John Laing Social Infrastructure Limited Active Secretary Appointed September 27, 2012
Secretary
John Laing Investments Limited Active Appointed September 27, 2012
Appointed August 16, 2013
Director
Hungary M6 Limited ' Active Director Appointed September 27, 2012
Sebergham Nominees Limited Active Director Appointed September 27, 2012
Wimpey Laing Iran Limited Active Director Appointed September 27,
2012
Wimpey Laing Limited Active Director Appointed September 27, 2012
Laing Investments Management Services Active Director Appointed March 26, 2014
Limited'
John Laing Group plc Active Director Appointed January 16, 2015
John Laing Holdco Limited Active Director Appointed January 26, 2015
John Laing Limited Active Director Appointed January 28, 2015
7.3.5 Brett Pieterse
Pieterse has the following current appointments:
Company name Status Position Date of appointment
John Laing Investments Limited Active Director Appointed November 4,
2011
Laing Investments Management Services(Australia) Active Director Appointed June 10, 2013
Limited
Laing Investments Management Services(New
Zealand)Limited Active Director Appointed April 29, 2014
John Laing Investments NZ Holdings Limited Active Director Appointed July 10, 2015
Laing Investments Management Services Limited Active Director Appointed December 1,
2015
62
7,4 Former Directors
Name.) I Appointment Dates of appointment
Maria Bernadette Lewis Secretary March 6, 2009 to September 4, 2015
Gary Stephen Lucas Director September 1, 2007 to August 16, 2013
David Michael Hardy Director September 1, 2007 to August 16, 2013
James Kerr Director _ January 14, 2009 to January 18, 2013
Roger Keith Miller Secretary November 1, 1999 to April 12, 2002 and March 23,
2007 to September 27, 2012
Andrew Gilbert Director September 1, 2007 to September 24, 2010
Charlesworth
Peter Alan James Director September 1, 2007 to October 31, 2009
Couldery
Alan Campbell Hogg Director September 1, 2007 to October 20, 2009
Ian Joseph Wells Director May 31, 1991 to June 30, 2009
Richard Weston Director October 1, 1997 to April 30, 2008
Andrew James Ballsdon Director September 1, 2007 to January 31, 2008
David John Morice Director September 1, 2007 to January 15, 2008
Hartshorne
Peter Geoffrey Shell Secretary April 12, 2002 to March 23,2007
Andrew Erskine Friend Director September 13, 1999 to September 8, 2006
Anthony Charles Roper Director October 1, 1997 to March 15, 2006
Michael Tiongson Director August 3, 2001 to April 29, 2005
Rodriguez
James Martin Storer Director January 27, 2003 to September 24, 2003
Florence Marie Director August 24, 1998 to June 28, 2002
Frangoise Barras
Alan Robert Chaney Director October 1, 1997 to March 28, 2002
Adrian James Henry Director , August 24, 1998 to October 31, 2001
Ewer
Andrew Simon Taylor Director December 1, 1999 to December 24, 2000
Derek William Secretary ," October 1, 1997 to November 1, 1999
Featherstone
James Armstrong Director July 5, 1993 to September 13, 1999
Sir John Martin Kirby Director " pre May 31, 1991 to October 1, 1997
Laing
Robert.Alec Wood Director May 31, 1991 to October 1, 1997
Leslie Richard Angell - Secretary and pre May 31, 1991 to October 1, 1997
,Director
Denis Christopher Director November 1, 1994 to October 1, 1997
Madden
Jon Rushton Director pre May 31, 1991 to October 31, 1994
Bryan Scott Gregory Director January 1, 1992 to March 1, 1999
John Arthur Renshaw Director pre May 31, 1991 to December 31,'1991
63
•
EXHIBIT 2
INTERIM AGREEMENT-TERM SHEET
MIAMI BEACH LIGHT RAIL/MODERN STREETCAR PROJECT
This document is a summary of the anticipated major terms of the Interim Agreement to perform certain
project development activities for the Miami Beach light rail/modern streetcar project (the "Project"),
expected to be entered into by the City of Miami Beach (the"City"), and a developer(the"Developer")to
be selected based on proposals submitted in response to a proposal requirements document (the "PRD")
issued for the Project.
ITEM TERM SUMMARY
1.0 GENERAL OVERVIEW
1.1 Interim Agreement The Developer shall perform certain project development services to
Scope of Services assist in the negotiation of a subsequent Comprehensive Agreement
to become the concessionaire ("Concessionaire") for the design,
construction, finance, operation and maintenance of the Project. The
Developer shall have a right of first negotiation for the
Comprehensive Agreement and if the parties cannot reach
agreement on a Comprehensive Agreement, then the City may
proceed to the second-ranked proposer at the City's discretion.
The Developer shall perform the services in accordance with any
applicable Milestone Deadlines set forth in the Interim Agreement.
1.2 Project Description The anticipated scope of the Project includes the design, finance,
construction, operation and maintenance of a wireless light
rail/modern streetcar system,to include the following:
(a) vehicles and associated power, communications,
signalization, and other systems required for the
functionality of the Project.
(b) vehicle storage, maintenance and operations facility, at a
location to be identified by the City.
(c) civil infrastructure.
(d) tracks and station stops, based on route alignments identified
by the City.
(e) fare collection systems.
(f) operations, maintenance service and safety system programs
and methods.
The system must be fully catenaryless while in operation between
stops along the Project route, but may use catenary within the
vehicle storage, maintenance and operations facility and may allow
for charging of the vehicle batteries or supercapacitors at passenger
1
ITEM TERM SUMMARY
stops along the route. The system shall maintain air conditioning in
all vehicles in a climate similar to the climate in the City of Miami
Beach. The system must include low floor, low step design
throughout each vehicle to maximize and facilitate accessibility and
more timely passenger loading and unloading, and operate in a
typical centenary system in the United States (750V DC). The
system must be interoperable with a future extension of the Beach
Corridor Direct Connection Project. The system must be
interoperable in alignment and stop layout and design, and in vehicle
safety and power systems. The Developer shall outline an approach
and schedule for demonstrating interoperability with the proposed
power system technology and with the crashworthiness and safety of
the vehicle prior to execution of the Comprehensive Agreement.
Also, the scope of the Project will include work related to the City's
resiliency program as identified by the City, which will be separately
funded by the City and maintained by the City after completion of
the work.
1.3 Term Unless terminated earlier, the Interim Agreement will terminate on
the earlier of: (a) the execution of the Comprehensive Agreement or
(b) 210 days from the effective date of the Interim Agreement,
unless extended by mutual agreement of the parties.
1.4 Exclusive Right to The Developer shall have the exclusive right to negotiate otiate a
Negotiate Comprehensive Agreement with the City during the term of the
Interim Agreement, unless terminated earlier pursuant to the terms
of the Interim Agreement. If the Interim Agreement is terminated
and the parties fail to execute a Comprehensive Agreement, the City,
at its discretion, may then commence negotiations with the second-
ranked proposer.
1.5 Process for Negotiating The parties shall negotiate in good faith a Comprehensive
Comprehensive Agreement consistent with the Comprehensive Agreement term
Agreement sheet included with the Interim Agreement; provided, however, that
neither party is obligated to execute a Comprehensive Agreement.
A high level summary of the key concepts and terms of the
Comprehensive Agreement is attached as Attachment A to this
Interim Agreement Term Sheet. A more detailed term sheet of the
Comprehensive Agreement will be included in the Interim
Agreement.
The City intends to secure a competitive price for the Project.
Therefore, pricing negotiations for the Comprehensive Agreement
shall be on an open-book basis, allowing the City to review all
underlying assumptions and data associated with the Developer's
Pricing and Financial Proposal. Such assumptions and data may
include, but are not limited to, financing costs, labor and equipment
rates, direct and indirect costs, allowance, contingencies, overhead
2
ITEM TERM SUMMARY
and profit. The City's intent is for the Developer to secure
competitive pricing on major components of the Project, such as
items to be subcontracted, materials, and for the overall price
presented by the Developer to be competitive in the market for
similar facilities to ensure the City receives the best value for the
City and their funding partners.
1.6 Conditions Precedent The following shall be conditions precedent to executing a
for Executing Comprehensive Agreement:
Comprehensive (a) the Developer is not in default under the Interim Agreement;
Agreement
(b) the Interim Agreement has not been terminated;
(c) all Project Deliverables required under the Interim
Agreement have been reviewed and approved by the City;
(d) the Developer, its equity members and its key contractors
are in compliance with the Public Entity Crimes Act and are
not debarred from bidding on City contracts;
(e) the environmental process has been completed and the
Project is consistent with the environmental documents; and
(f) the Project funding plan is completed and in place to support
any milestone payments and availability payments required
to be paid to the Concessionaire under the Comprehensive
Agreement.
2.0 SCOPE OF SERVICES AND COMPENSATION
2.1 Early Due Diligence The Developer shall furnish the following early due diligence
Project Deliverables Project Deliverables:
(a) Preliminary cost estimate no later than 60 days of execution
of the Interim Agreement.
(b) Preliminary project schedule through revenue service no
later than 60 days of execution of the Interim Agreement.
(c) Preliminary assessment of fare collection approach no later
than 60 days of execution of the Interim Agreement.
(d) Approach for safety certification no later than 30 days of
execution of the Interim Agreement.
(e) Simulation and preliminary approach for interoperability no
later than 90 days of execution of the Interim Agreement.
2.2 Contents of The preliminary cost estimate for the Project shall be based on the
Preliminary Cost Draft Project Environmental Impact Report using the Developer's
Estimate preliminary approach, vehicle and vehicles systems. The
3
ITEM TERM SUMMARY
preliminary cost estimate shall include the following key items:
(a) Capital costs necessary for the design and construction of
the Project. Major elements should be identified separately
including:
i. design costs.
ii. civil construction.
iii. track, stops and related systems.
iv. vehicle and vehicle systems.
v. vehicle storage operations and maintenance facility and
public works replacement facilities.
vi. resiliency program requirements.
(b) Operations and maintenance costs outlined for the life of the
Project during the term of the Comprehensive Agreement.
Major elements should be identified separately including:
i. annual operations and maintenance of the vehicles and
vehicle systems.
ii. annual operations and maintenance of the track, stops
and track systems.
iii. annual operations and maintenance of the vehicle
storage operations and maintenance facility.
iv. periodic renewal and replacement cost for the vehicles
and vehicle systems
v. periodic renewal and replacement cost for the track,
stops and track systems.
vi. periodic renewal and replacement cost for the vehicle
storage operations and maintenance facility.
vii. other annual operations and maintenance costs.
viii. other renewal and replacement costs.
2.3 Content of Preliminary The preliminary project schedule shall include the following major
Project Schedule elements. Any major phasing should be identified to the extent
possible.
(a) Development phase of the Interim Agreement to execution
of the Comprehensive Agreement/financial close.
(b) Design Stage.
i. civil works.
4
ITEM TERM SUMMARY
ii. track, stops and track systems.
iii. vehicles and vehicle systems.
iv. vehicle storage operations and maintenance facility and
public works replacement facilities.
(c) Construction Stage
i. civil works.
ii. track, stops and track systems.
iii. vehicles and vehicle systems.
iv. vehicle storage operations and maintenance facility.
v. systems testing, certification and integration — passing
to operations and public works replacement facilities.
vi. revenue service.
2.4 Content of Preliminary The preliminary assessment of fare collection approach for the
Assessment of Fare Project shall identify the Developer's assessment of the most
Collection Approach effective approach to fare collection, which shall include the
assessment of key elements such as:
(a) Open versus closed system.
(b) Passenger loading and unloading.
(c) Collection efficiency and effectiveness.
(d) Enforcement and assessment of fines.
2.5 Content of Approach to The approach to safety certification as required under federal and
Safety Certification state laws shall include the following key elements:
(a) System safety program plan.
(b) System security program plan.
(c) Safety and security certification program plan.
2.6 Content of Simulation The simulation and preliminary approach for interoperability shall
and Preliminary address the interoperability of the Project with possible future
Approach for connections to the Project, including the following key elements:
Interoperability (a) What, if any changes would be required to the Developer's
proposed system to operation on an expanded system that
includes both catenary and catenary less operations. This
shall include both the major elements and the anticipated
cost to include the elements on the Developer's proposed
system to operate on the expanded system.
(b) What changes would be required to other vehicle and
5
ITEM TERM SUMMARY
vehicle systems manufactured by others to operate on the
Developer's proposed system for the Project. This shall
include both the major elements and the anticipated cost to
include the elements on the other vehicle and vehicle
systems to effectively operate on the Developer's proposed
system for the Project.
2.7 Other Technical and The Developer shall furnish the following Project Deliverables
Financial Project during the term of the Interim Agreement in accordance with the
Deliverables applicable Milestone Deadlines:
(a) Project Deliverables Management Plan
(b) Project Management Technical Solutions
(c) Design and Construction Technical Solutions
(d) Operations, Maintenance, Rehabilitation, and Handback
Technical Solutions
(e) Systems Integration Technical Solutions
(f) Geotechnical Report
(g) Utility Report
(h) Hazardous Materials Report
(i) Financial and Price Proposal
2.8 Content of Project The Project Deliverables Project Management Plan shall address and
Deliverables contain the following information:
Management Plan (a) approach to ensuring that the Project Deliverables comply
with the requirements of the Interim Agreement;
(b) work plan for the delivery of each Project Deliverable by the
applicable Milestone Deadline;
(c) description of the quality management plan for any design
undertaken related to the Project Deliverables; and
(d) line item budget for each Project Deliverable, including
estimated hours.
2.9 Content of Project The Project Management Technical Solutions shall address and
Management Technical contain the following information:
Solutions (a) an initial project management plan for the work required
under the Comprehensive Agreement;
(b) an initial baseline schedule that provides a summary level
description of the key activities and milestones during the
design-build period and planned capital asset replacement
6
ITEM TERM SUMMARY
work during the operations and maintenance period,
including the proposed deadlines for substantial completion
and final completion;
(c) schedule for LRV delivery, testing and commissioning;
(d) approach to supporting the City's communication and
outreach with the public, including users, businesses and
other local stakeholders;
(e) approach to permitting and environmental compliance,
including a matrix identifying all required permits and
governmental approvals; and
(f) description of the systems and procedures used to monitor
and report performance.
2.10 Content of Design and The Design and Construction Technical Solutions shall address and
Construction Technical contain the following information:
Solutions (a) description and supporting schematics for the light rail
vehicle (LRV), including number of LRVs, design capacity,
number of seats and standing area, accommodation of
wheelchairs and bicycles and environmental control
systems;
(b) description and supporting schematics for the track
alignment, including horizontal and vertical alignment
envelope criteria, guideway types, and sections;
(c) description and supporting schematics of the trackwork,
including transitions between trackwork types, design
criteria, fastening systems, and supporting infrastructure for
signaling, power, and communications equipment;
(d) description and supporting schematics for the stops,
including platform plan, designated waiting areas, stop
limits, landscaping, and longitudinal and cross sections;
(e) description and supporting schematics for the roadway
elements, including construction staging, mitigation of
geotechnical related issues, right of way access,
maintenance and protection, and roadway design;
(f) description and supporting schematics for maintenance of
traffic, traffic control and sequencing to accommodate
traffic during construction;
(g) a construction phasing plan describing how the preferred
public works department site will continue to maintain
critical functions during construction and identifying if some
non-critical functions, such as parking or storage, would
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ITEM TERM SUMMARY
need to be temporarily moved off-site during construction;
(h) high level communications plan during the construction
phase to notify the public of Project status and major next
steps, such as roadway/lane/driveway closures and related
impacts; and
(i) description of any value engineering solutions, identifying
deviations from the Baseline Requirements and Standards.
2.11 Content of Operations The Operations, Maintenance, Rehabilitation and Handback
Maintenance, Technical Solutions shall address and contain the following
Rehabilitation,and information:
Handback Technical (a) approach to operations of the system, including system
Solutions operating plan, training, safety, incident management and
related elements;
(b) approach to routine maintenance, including specialized
maintenance equipment, supply and management of spare
parts, and inspection and testing of Project elements;
(c) description and supporting schematics for designing, siting,
and constructing the Project's vehicle storage maintenance
and operations facility, and public works offices,
warehouses and storage and parking facilities; and
(d) approach to, and schedule for, capital asset replacement,
including the asset management plan, and managing and
staging capital asset replacement during ongoing operations;
and
(e) approach to ensuring that handback requirements are met.
2.12 Content of Systems The Systems Integration Technical Solutions shall address and
Integration Technical contain the following information:
Solutions (a) description and supporting schematics to demonstrate how
the systems, including train control, traction power supply,
communications, safety and security, control, and
monitoring, will be configured and how they will work
individually and together;
(b) description and supporting schematics for the traffic
monitoring and management ITS systems;
(c) description and supporting schematics on how the Project
will be interoperable and interface with any future Project
extensions or other transit systems related to the Baylink
Project;
(d) description and supporting schematics for transitioning from
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ITEM TERM SUMMARY
integrated testing to revenue service; and
(e) description and supporting documentation with schedules
related to the approach to testing of vehicles and systems in
meeting the requirements for certification.
2.13 Contents of The Geotechnical Report shall identify the existing pavement and
Geotechnical Report subsurface conditions (including geotechnical sampling) related to
the Project alignment.
2.14 Contents of Utility The Utility Report shall identify all existing utilities, subsurface
Report utility engineering, utility impacts and relocations related to the
Project alignment.
2.15 Contents of Hazardous The Hazardous Materials Report shall identify all pre-existing
Materials Report hazardous materials within the Project alignment
2.16 Contents of Financial The Financial and Price Proposal shall include the following
and Price Proposal information:
(a) process and schedule to reach financial close;
(b) sources and uses of funds, including available financing and
public funds required for the term of the Comprehensive
Agreement;
(c) financing commitments;
(d) preliminary rating from one of the major rating agencies;
(e) major assumptions;
(f) internal rate of return;
(g) cash flow analysis for the term of the Comprehensive
Agreement;
(h) detailed pricing for the design and construction work;
(i) detailed pricing for the operations and maintenance work;
(j) detailed pricing for the supply of the LRVs; and
(k) fully functional Excel financial model, including
a. detailed sources and uses;
b. all anticipated financings and potential future
refinancings;
c. detailed cash flow waterfall for the entire term of
the Comprehensive Agreement including both
construction and operations; and
d. schedule for equity distributions and anticipated
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ITEM TERM SUMMARY
internal rate of return for each equity member.
2.17 Permitting and Other than the environmental approvals, the Developer shall take a
Governmental leading role, in coordination with the City, to apply for and secure
Approvals necessary permits and governmental approvals for the development
of the Project.
2.18 Additional Services The City may require additional services to be provided under the
Interim Agreement by issuance of a task order if such additional
services are not inconsistent with the environmental review for the
Project. Compensation for additional services may be through an
agreed upon basis between the parties. Prior to the execution of the
Interim Agreement, the parties shall agree upon a billing rate
schedule for task orders issued under the Interim Agreement.
2.19 Early Construction The City may elect to enter into an "early works agreement" with
Works Agreement Developer to allow certain construction work to be performed during
the development phase of the Project. In the event an early works
agreement is executed by the parties, it shall specify the terms and
conditions applicable to the work covered by that agreement,
including:
(a) the scope of work and schedule for completion;
(b) insurance and bonding requirements;
(c) payment terms; and
(d) review, approval, inspection and acceptance of the work.
2.20 Responsibility for The Developer will be responsible for its own cost for developing
Development Costs the Project from the Interim Agreement to the Comprehensive
Agreement. The Developer shall provide a budget for the
development costs in detail by specific Project Deliverables
identified in the Interim Agreement within 30 days of execution of
the Interim Agreement. The Developer will provide a report
comparing the budget to actual development cost for each Project
Deliverable on a monthly basis during the term of the Interim
Agreement.
2.21 Reimbursement for Upon completion, the City will reimburse the Developer for the
Certain Project following Project Deliverables as part of the Interim Agreement:
Deliverables (a) Geotechnical Report.
(b) Utility Report.
The Developer shall provide a proposed cost for such Project
Deliverables and the parties shall agree on the cost prior to execution
of the Interim Agreement.
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ITEM TERM SUMMARY
3.0 SCHEDULE OF PERFORMANCE AND REVIEW OF DELIVERABLES
3.1 Milestone Deadlines Prior to the execution of the Interim Agreement, the parties shall
agree on a deadline for each Project Deliverable ("Milestone
Deadline"). The Project Deliverables shall be delivered no later than
the applicable Milestone Deadline.
3.2 Review and Approval The Project Deliverables shall be subject to the review and approval
of Deliverables of the City in its proprietary capacity as the owner of the Project.
The City's review and approval of the Project Deliverables will
include review for compliance with the requirements of the Interim
Agreement and applicable environmental approvals. The City's
review and approval shall not transfer any liability to the City for
any defects, errors or omissions in the Services or failure of the
Services to comply with applicable law. The Developer remains
fully responsible for the contents of the Project Deliverables despite
the City's such review and approval of any or all of the Project
Deliverables.
Within 20 days of receipt of a Project Deliverable, the City will
notify the Developer if the City approves the Project Deliverable. If
the Project Deliverable is rejected, the Developer shall re-submit the
Project Deliverable within 10 days after the Developer received
notice of such rejection from the City. The City shall notify the
Developer whether it approves the resubmitted Project Deliverable
within 10 days of the City's receipt of the resubmission.
3.3 Baseline Requirements The Developer shall perform the Services consistent with and in
and Standards accordance with good industry practices and the following:
(a) the City's funding plan and constraints;
(b) governmental approvals, including the environmental report;
(c) applicable law; and
(d) the City's technical provisions report on engineering and
design standards and specifications.
3.4 Delays The Developer shall be entitled to an extension of a Milestone
Deadline for delays that are beyond the reasonable control of the
Developer as set forth in the Interim Agreement.
4.0 ENVIRONMENTAL PROCESS
4.1 Role and The City shall be responsible for obtaining the environmental
Responsibilities approval for the Project. The procurement, entry into, terms of, or
performance by either party under the Interim Agreement, shall not
in any manner limit or confine the full discretion that the City will
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ITEM TERM SUMMARY
exercise in conducting environmental review and preparing
environmental documents for the Project. The City retains exclusive
control and decision-making authority for purposes of the
environmental review and process under applicable law.
The Developer shall have no right or obligation to perform, and is
expressly prohibited from performing, any Services that would
violate conflict of interest rules or any environmental law regarding
the review and preparation of the environmental documents. The
Project Deliverables shall be consistent with any final environmental
approval for the Project.
4.2 Selection of No Build Nothing in the Interim Agreement shall commit the parties to any
Alternative Project alternative or alignment. Until the environmental process is
completed, all references in the Interim Agreement or any plan for
the Project shall be understood and deemed to mean only a potential
or prospective Project.
In the event the environmental process results in a no build
alternative, the City may elect to terminate the Interim Agreement.
5.0 TERMINATION AND DEFAULT
5.1 Termination for Upon execution of the Comprehensive Agreement, the Interim
Execution of the Agreement shall terminate. Upon such termination, any amounts
Comprehensive owed by the City under the Interim Agreement shall be included as
Agreement part of, and paid from, the financing under the Comprehensive
Agreement.
5.2 Termination due to Upon expiration of the term, the Interim Agreement shall terminate
Expiration of the Term and any payments due shall be paid as set forth in the Interim
Agreement.
5.3 Termination by the City The City may terminate the Interim Agreement:
(a) if the City determines in its sole discretion that such
termination is in the interest of the public;
(b) if the environmental process results in a no build alternative;
(c) if the Developer fails to cure any default by the Developer;
or
(d) if the City Commission at its discretion does not approve a
funding plan, or otherwise for lack of funds.
5.4 Termination by The Developer may terminate the Interim Agreement if the City fails
Developer to make payment of undisputed amounts due and owing to the The
Developer; provided that the City shall have 60 days to pay such
undisputed amounts after receipt of notice from the Developer of
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ITEM TERM SUMMARY
such nonpayment. Such termination shall be deemed a termination
for convenience for purposes of determining the amounts owed to
the Developer.
5.5 Compensation Upon Except for a termination due to a Developer default, termination due
Termination to execution of the Comprehensive Agreement, or termination due to
the City's failure to approve a funding plan or otherwise for lack of
funds,the City shall pay the following amounts:
(a) amounts owed for Services performed under task orders
issued by the City; and
(b) for Project Deliverables delivered to and approved by the
City, 100% of the line item budget for the applicable
Project Deliverable.
For a termination due to a Developer default, failure of the City
Commission to approve a funding plan or lack of funds, no
additional payments shall be owed to the Developer. For a
termination due to a Developer default, the City shall be entitled to
set-off from any amounts otherwise due to the Developer any
damages, costs or expenses incurred by the City as a result of the
Developer default, including reasonable attorney's fees.
5.6 Developer Defaults The Developer defaults include the following:
(a) failure to perform any material obligations under the Interim
Agreement;
(b) failure to provide a Project Deliverable by the applicable
Milestone Deadline;
(c) failure to provide evidence satisfactory to the City that the
LRVs will be able to obtain all required safety certifications
in accordance with applicable standards and law;
(d) failure to maintain the required insurance or performance
security;
(e) any representation made by the Developer under the Interim
Agreement, or any certificate, schedule, report or other
document delivered to the City by or on behalf of the
Developer pursuant to the Interim Agreement, is false or
materially misleading or inaccurate in any material respect
when made or omits material information when made;
(f) the Developer, its equity members, or any of their respective
officers or directors have been indicted or convicted of, or
pleading guilty or nolo contendere to, a violation of
applicable involving fraud, conspiracy, collusion, bribery,
perjury, or material misrepresentation, as a result in whole
or in part of activities relating to any Project in the United
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ITEM TERM SUMMARY
States of America;
(g) the Developer, its equity members, or any of its key
contractors are placed on the convicted vendors list in
accordance with the Public Entity Crimes Act.
If the Interim Agreement is terminated due to Developer Default, the
City shall be entitled to draw upon the Performance Security.
6.0 OTHER RIGHTS AND RESPONSIBILITIES
6.1 Ownership and Use of All Project Deliverables required under the Interim Agreement shall
Work Product be considered "works made for hire" and shall become the City's
property. The City shall have the right to use such Project
deliverables. All Project Deliverables, whether completed or
partially completed, not previously delivered to the City shall be
delivered to the City upon termination of the Interim Agreement.
6.2 Accounting and All books and records related to the Services shall be available for
Records review and audit by the City and shall be kept for a period of at least
3 years after completion of the Services.
6.3 Performance Security The Developer shall provide a letter of credit in the amount of$10
million, naming the City as the beneficiary, as Performance Security
for the Developer's obligations under the Interim Agreement. The
full amount of the letter of credit shall be drawn upon by, and
forfeited to, the City if the Interim Agreement is terminated due to a
Developer default.
6.4 Insurance At all times during the term of the Interim Agreement, the
Developer shall maintain the following insurance:
(a) worker's compensation and employer's liability insurance
per the statutory limits;
(b) commercial general liability in an amount not less than
$5,000,000 combined single limit per occurrence;
(c) automobile liability in an amount not less than $2,000,000
combined single limit per occurrence; and
(d) excess liability insurance in an amount not less than
$10,000,000 per occurrence and in the aggregate.
6.5 Indemnification To the fullest extent permitted by law, the Developer shall
indemnify and hold harmless the City, its officers, employees,
agents, and instrumentalities from liabilities, losses, and damages to
the extent caused by the negligence, recklessness, breach of contract,
or intentionally wrongful conduct of the Developer and its
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ITEM TERM SUMMARY
subconsultants.
The Developer shall investigate and defend all claims and suits in
the name of the City to the extent such claims and suits are caused
by the negligence, recklessness, breach of contract, or intentionally
wrongful conduct of the Developer and its subconsultants.
6.6 Limitation of Liability The City's liability to the Developer for any cause of action for
money damages due to an alleged breach of the City of the Interim
Agreement shall be limited to the sum of the total line item budgets
of completed Project Deliverables and the total value of all task
orders issued by the City, less amounts paid by the City.
6.7 Governing Law and The Interim Agreement shall be governed by the laws of the State of
Venue Florida. Exclusive venue shall be in Miami-Dade County (if in state
court) and the U.S. District Court, Southern District of Florida (if in
federal court). The parties waive a trial by jury in any civil litigation
relating to this Interim Agreement.
6.8 No Contingent Fee The Developer and its equity members each warrants that it has not
employed or retained any company or person, other than a bona fide
employee working solely for the Developer or equity member, to
solicit or secure the Interim Agreement, and that it has not paid or
agreed to pay any person, company, corporation, individual, or firm,
other than a bona fide employee working solely for the Developer or
equity member, any fee, commission, percentage, gift, or other
consideration contingent upon or resulting from the award or making
of the Interim Agreement.
6.9 Change in Developer's The Developer shall not add or change any equity member, lead
Team contractor, lead engineer, lead vehicle supplier, lead operator or lead
maintenance identified in the Developer's proposal without the prior
written consent of the City Commission, which consent, if given at
all, shall be at the City Commission's sole option and discretion.
6.10 Assignment The Developer shall not assign, transfer or convey the Interim
Agreement to any other person, firm, association, or corporation, in
whole or in part, without the prior written consent of the City
Commission, which consent, if given at all, shall be at the City
Commission's sole option and discretion. However, the Developer
will be permitted to cause portions of the Services to be performed
by subconsultants, subject to the prior written approval of the City.
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ATTACHMENT"A"
COMPREHENSIVE AGREEMENT KEY CONCEPTS
Concept Description
Nature of Comprehensive The Comprehensive Agreement will be a public-private partnership
Agreement agreement under Florida Statute 255.065 for the finance, design, construct,
operate and maintain an off-wire light rail transit/modern streetcar system,
including the vehicles, associated systems, stops and a vehicle storage,
maintenance and operations facility. The Comprehensive Agreement will be
a fixed price contract, subject to adjustment only for certain events and
circumstances as set forth in the Comprehensive Agreement.
Deadlines/Milestones The Concessionaire will be required to achieve certain deadlines under the
Comprehensive Agreement, including deadlines for financial close, revenue
service and final completion.
Term The term of the Comprehensive Agreement will be 35 years from the
effective date of the Comprehensive Agreement, subject to extension
pursuant to the Comprehensive Agreement.
Key Personnel and Key The Concessionaire will not be allowed to terminate, replace or substitute
Contractors any key personnel and key contractor without the City's approval. The
Comprehensive Agreement will include information regarding provisions
that must be included in key contracts.
Right of Way The City will be responsible for acquiring and providing the right of way
necessary for the Project, including the site for the vehicle storage,
maintenance and operations facility.
Ownership of Right of The Concessionaire will not have an ownership or leasehold or other real
Way and Improvements property interest in the Project,the right of way or the vehicle storage,
maintenance and operations facility site. The City will grant the
Concessionaire a license to access such property for the purposes of
performing its obligations under the Comprehensive Agreement.
Financial Close Security The Concessionaire will be required to provide financial close security in the
form of a letter of credit to secure its obligation to achieve financial close in
accordance with the requirements of the Comprehensive Agreement.
Public Funding The City will provide certain funding for the project, which will be in the
form of milestone payments during the construction period and availability
payments during the operations period. The availability payments will
commence upon revenue service of the system. The milestone payments will
be based on major deliverables as follows:
(a) Completion of the design stage — 5% of the milestone payments
amount.
(b) Delivery, installation and certification of the vehicles and vehicle
systems—25%of the milestone payments amount.
(c) Completion of the civil works — 25% of the milestone payments
amount.
(d) Completion and certification of the track and track systems and
completion of the stops—25% of the milestone payment amount.
(e) Testing, final certification and opening of the system to revenue
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Concept Description
service—20%of the milestone payment amount.
All public funding will be subject to appropriations.
Refinancing The Concessionaire will have the right, with the City's consent,to refinance
its financing obligations. The City will receive at least 50% of any
refinancing gains, calculated in accordance with the formula set forth in the
Comprehensive Agreement.
Lender's Step-In Rights The lenders will have the right to notice and the opportunity to step in and
cure in the event of a Concessionaire default. The City will enter into a
lender's direct agreement with lenders with respect to such step in rights.
Minimum Equity As of financial close and throughout the construction period, the
Requirement Concessionaire must maintain a minimum equity investment of the greater of
(a) 10% of the design and construction costs, less the amounts paid by the
City as milestone payments and (b) $10 million.
Equity Transfers The Comprehensive Agreement will allow equity transfers of the
Concessionaire under certain conditions and provided certain requirements
are met. At a minimum, no equity transfers will be allowed during the
construction period and for the first year of the operating period.
Insurance The Concessionaire will be required to obtain insurance coverage during
both the construction and operations periods. The types of insurance
coverage may include general liability, worker's compensation, professional
liability, builder's risk, property,commercial automobile, marine cargo,
contractor and operators pollution liability. The insurance coverages
required during the operations period may be subject to benchmarking to
facilitate risk-sharing in the event of significant increases or decreases in
premiums due to market-based factors.
Performance and Payment During the construction period, the Concessionaire will be required to
Security During provide a performance bond or letter of credit and a payment bond as
Construction Period security for performance of work and payment of labor and materials. Each
bond or letter of credit shall be in the amount of no less than [.]% of the
value of the construction work.
Performance and Payment During the operations period, the Concessionaire will be required to provide
Security During a performance bond or letter of credit equal to the budgeted costs of the
Operations Period following year's routine operations and maintenance work.
The City may require the Concessionaire to furnish a payment bond to secure
the Concessionaire's obligation to pay labor and materials for capital asset
replacement work during the operations period.
Geotechnical and Utility Except for certain limited circumstances,the Concessionaire will assume the
Conditions risk of geotechnical conditions and inaccuracies in utility surveys.
Utility Adjustments The Concessionaire will be responsible for coordinating and arranging for
the relocation of affected utilities, and will be required to enter into any
utility agreements with the affected utilities.
Environmental and The Concessionaire will be responsible for obtaining all necessary
Governmental Approvals governmental approvals and permits for the Project to perform the work.
Further,the Concessionaire shall comply with all applicable governmental
and environmental approvals and permits.
Commencement of The operations period will start on the date that revenue service availability
Operations is achieved. The City's obligations to pay availability payments will
commence at the start of the operations period. The Project may be opened
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Concept Description
in phases.
Fare System and The Concessionaire will supply and install a fare system, including fare
Collection system equipment. The Concessionaire will stock ticket vending machines,
collect cash from such machines, deposit cash receipts and arrange for
proceeds of credit transactions to be deposited into a designated City
account, and provide accounting reports regarding all transactions and
deposits.
Capital Asset The Concessionaire will be required to perform capital asset replacement
Replacement Work work, including the purchase of new LRVs. The Concessionaire will be
required to fund a renewal work reserve in an amount equal to the following
two years of renewal work as set forth in a renewal work schedule submitted
by Concessionaire and approved by the City.
Handback Requirements The Concessionaire will be required to handback the Project in a condition
that meets the handback requirements of the Comprehensive Agreement.
The Concessionaire will be required to fund a handback requirements reserve
at least 5 years prior to the expiration of the term to secure its handback
obligations.
Relief Events The Concessionaire will be entitled to additional costs and/or time extensions
as a result of certain relief events. Relief events may include City-directed
changes, City-caused delays and certain force majeure events.
Noncompliance Regime The City will assess noncompliance points for the Concessionaire's failure to
meet specified contractual obligations. The accumulation of noncompliance
points may result in increased oversight and monitoring, liquidated damages,
and termination.
Grounds for Termination The Comprehensive Agreement may be terminated: (a) by the City for
convenience or for Concessionaire default; (b) by Concessionaire for City
defaults; or(c)by either party due to certain events beyond the control of the
parties.
Termination In the event of termination prior to the end of the term, the termination
Compensation compensation payable to the Concessionaire will depend on the reason for
the termination.
Dispute Resolution Disputes that cannot be resolved between the parties will be referred to a
disputes review board for a non-binding decision. Disputes that remain
unresolved after issuance of the disputes review board's recommendation
shall be resolved by litigation.
Governing Law and The Comprehensive Agreement shall be governed by the laws of the State of
Venue Florida. Exclusive venue shall be in Miami-Dade County (if in state court)
and the U.S. District Court, Southern District of Florida (if in federal court).
The parties waive a trial by jury in any civil litigation relating to the
Comprehensive Agreement.
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