DryShips Inc (fka DRYS)

[Burnt before]

Financial firm alleges litany of abuse at Economou's Ocean Rig
Fund manager seeks to claw back cash allegedly transferred from Ocean Rig to chief executive
April 6th, 2017 18:09 GMT by Eric Martin
Published in LEGAL
Highland Capital Management's draft lawsuit against George Economou and his public and private companies has laid out a laundry list of ways that the financial firm alleges the Greek shipping mogul siphoned cash out of drilling contractor Ocean Rig and into both shipowner DryShips and his own pockets.

One of the Dallas asset manager allegations is that after Ocean Rig purchased the drilling rig Cerrado for $65m in an auction in Brazil last year, the proceeds were ultimately used to pay off a debt to Economou — chief executive of the Nasdaq-listed driller and DryShips — that was owed by the rig's former owner, Schahin Oil & Gas.

It also claims that only a month earlier, Economou's private TMS Offshore Services signed a management deal that awarded it sale-and-purchase fees for such transactions.

http://www.tradewindsnews.com/legal/1236636/financial-firm-alleges-litany-of-abuse-at-economous-ocean-rig

Risks Relating to the Company
Lawsuits may be brought against us in connection with the ongoing restructuring of our former subsidiaries

On March 23, 2017, Ocean Rig UDW Inc., its subsidiaries Drillships Financing Holding Inc., Drillships Ocean Ventures Inc. and Drill Rigs Holdings Inc. and certain initial supporting creditors entered into a restructuring agreement. We refer to Ocean Rig and such subsidiaries as the Ocean Rig Parties. The Ocean Rig Parties are our former subsidiaries. The restructuring agreement provides that a restructuring will be implemented by four separate but interconnected schemes of arrangement under Cayman Islands law and ancillary proceedings under Chapter 15 of the U.S. Bankruptcy Code, seeking recognition of the Cayman provisional liquidation proceedings and the schemes of arrangement as foreign main proceedings and an order of the U.S. Bankruptcy Court giving effect to the schemes in the United States. We refer to these proceedings as the Restructuring Proceedings. In connection with the Restructuring Proceedings, lawsuits may be brought against us by creditors of the Ocean Rig Parties with respect to prior transactions between us and the Ocean Rig Creditors or other entities affiliated with the Ocean Rig Creditors, although no such lawsuit has been brought against us as of the date of this prospectus. While we plan to vigorously contest any lawsuits that may be brought against us in the future, we can provide no assurance of the outcome of such potential lawsuits, the results of which could have a negative adverse effect on our financial condition.