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Monday, October 22, 2012

A Push for Information About Investors Preceded The Mysterious Death of Lawyer Major Bashinsky

Chip Hazelrig

Attorneys for the Estate of Sloan Y. Bashinsky Sr. filed a court document in June 2009 seeking information about other individuals who had joined Mr. Bashinsky in placing their money with W & H Investments of Birmingham.

It's not clear if the estate ever received the information, but it is clear from court documents that W & H did not want to turn over the information. How contentious was this issue in a lawsuit styled Estate of Sloan Y. Bashinsky Sr., et al v. W & H Investments, et al?

Well, almost exactly nine months later, Mr. Bashinsky's youngest son, attorney Major Bashinsky, was reported missing. And 12 days after the disappearance was reported in the press, Major Bashinsky's body was found in a golf-course water hazard on Birmingham's Southside.

Is that a coincidence? We don't know. But court records do indicate that partners Fred Wedell ("W") and William Cobb "Chip" Hazelrig ("H") were not anxious to have their list of investors scrutinized.

We contacted Chip Hazelrig prior to publication of this post in an effort to interview him about various matters connected to the Bashinsky-estate lawsuit. He declined our interview request.

Why did the parties, given what appears to have been a major sticking point, suddenly reach a settlement that was approved by the court on March 1--for the curious amount of $300,000. Was it a coincidence that Major Bashinsky went missing two days later?

We don't have the answers to those questions. But it's clear that an awful lot of money was involved in the Bashinsky Estate--and that's why the $300,000 settlement figure seems odd.

According to court documents, Sloan Bashinsky invested more than $37 million in oil and gas wells with Wedell and Hazelrig, over about a 20-year period. In a 2004 letter, written roughly one year before his death, Mr. Bashinsky tried to get information about the status of his investments. Over a roughly six-month period following his death, the estate tried to get the same information. When it wasn't forthcoming, the estate filed a lawsuit, seeking an accounting of Mr. Bashinsky's funds, plus any damages that might have been due from breach of contract, breach of fiduciary duty, etc.

If W & H handled the Bashinsky funds properly, there should have been no damages at all. If the firm mishandled more than $37 million in investments, you would expect the damages to be substantial--way more than $300,000. So why did the parties agree to that figure? It seems the damages should have been zero or in the tens of millions of dollars.

Court records indicate that W & H engaged in sloppy bookkeeping regarding its Bashinsky accounts, and in some cases, the firm claimed records had been shifted to another company. The estate responded by essentially saying, "OK, if you can't show us directly how much was due to Mr. Bashinsky, then show us information about other investors, and we can determine in an indirect manner the proper amount."

Under the circumstances, that seemed to be a reasonable request--and the court must have agreed because it granted the estate's motion to compel.

The motion to compel can be read at the end of this post, followed by the settlement agreement. The Bashinsky funds went into an oil-investment account called the Birmingham Exploration Venture (BEV) Partnerships. The key information can be found on page 2 of the motion to compel, under "B. Documents Regarding Other Investors of W & H."

Here is what the estate had been seeking since its first request for production of documents:

17. All documents showing the names and identities of other investors or persons with an interest in W & H, W & H Promoted Investments, and/or BEV Partnerships and/or other Entity.

And here was the response:

Response: Defendant objects to this request as being irrelevant and immaterial except to say Bashinsky was an investor, participant, and/or joint venturer with W & H in certain of the referenced oil and gas ventures.

Clearly, Wedell and Hazelrig were not anxious to turn over the requested information. Then we have this from the estate:

18. For all individuals or entities named in response to Request for Production No. 17 above, produce all documents relating to: 
* The amount each person or entity invested. 
* The amount of payments and distributions made to each.

Again, Wedell, Hazelrig, and their lawyers wanted nothing to do with this line of inquiry:

Response: With regards to Bashinsky and W & H, to the extent these documents exist, they are made available. The Defendant objects to the production of any documents relating to any other individuals or entities as being irrelevant and immaterial.

Here is how the estate explained the request in its motion to compel:

The purpose of requesting these documents is to provide verification of the correctness of the distributions made to Mr. Bashinsky. W & H apparently does not have complete books and records for the oil and gas projects in which it was involved with Mr. Bashinsky. The well-lease assignments list each investor and their interest by percentage in the profits. For many if not all of the wells at issue, a Bashinsky/W & H project such as BEV IV was only one investor among others who also held an interest in the well's profits. Therefore, if one has documents showing a given investor's distribution income for a particular well, it may be possible to extrapolate Mr. Bashinsky's proportionate share. This is potentially an effective means to verify the correctness of the distributions made by W & H to Mr. Bashinsky in the absence of complete books and records.

A judge apparently found this to be a reasonable approach, because the motion to compel was granted. Did Wedell and Hazelrig turn over the information? It's hard to tell from the court file. We only know for sure that a member of the Bashinsky family wound up floating in a golf course water hazard, the victim of an apparent "suicide"--even though nothing in the medical examiner's report presents solid evidence that Major Bashinsky actually shot himself.

  Bashinsky Lawsuit--Motion to Compel2
Bashinsky Lawsuit Settlement Agreement

15 comments:

Anonymous said...

Mr. Wedell and Mr. Hazelrig will take $37 million of your money to invest, but then can't provide paperwork to show what they've done with it?

Spasmoda said...

Why does the word "scam" keep entering my brain as I read this?

Sharon said...

I would like to know the identity of the other investors, too. Isn't Hazelrig the guy who gave money to Bob Riley, but Teflon Bob returned it when he discovered that Chip had ties to gaming?

Sounds like this could be an interesting money trail.

Anonymous said...

I've been involved in litigation where one party or another felt forced into a settlement. That taught me that the fact a case was settled does not mean everyone walked away happy. Judges have ways of forcing settlement agreements, and that can leave one party or another extremely dissatisfied. I find it very curious that Major Bashinsky went missing 2 days after this case came to a close.

legalschnauzer said...

Anon at 9:59--

Sounds like you ought to write a blog of your own.

Anonymous said...

Wedell and Hazelrig must have some business smarts because they've made a lot of money, and I assume they had adequate insurance to cover the costs of this litigation. That's one question I would have about this situation--who was their insurer and what kind of coverage did they have? If their coverage was lacking, or the carrier was balking, they might have been under enormous pressure from a claim like this. I'm not saying that had anything to do with Major Bashinsky's death. I have no idea what happened there. But insurance coverage often is a key player in any business litigation.

legalschnauzer said...

Anon at 10:06--

You said a mouthful there. I've never been in business litigation, but in my homeowner's case, I know that insurance coverage was a key factor. In fact, my impression is that a lot of lawsuits are driven by a desire to get insurance money.

Anonymous said...

Mr. Schnauzer--

Business obligations prevent me from taking on a blog about my experience. But it would make a good story. Long story short, my company got sued, and after months of discovery, we showed that we did nothing wrong. We were ready to defend the case through trial, but our lawyer said the judge wanted the case settled. When we protested, our lawyer said the judge would rule against us on every motion at trial and we risked a big jury verdict against us. We did nothing wrong and were forced to settle the case. Nobody wound up dead because of it, but the executives at our firm were bitter about it for a long time.

jeffrey spruill said...

Chip Hazelrig declined your interview request.

That sounds EXACTLY like David W. Bouchard Esq. when I try to ask him:"does the FBI still consider him an asset now that I've exposed the FBI Director at the Norfolk Field Office the SAME DAY I was in Chesapeake General District with him Dec.1,2006- six days before the US Attorneys firings":

http://hamptonroads.com/node/189481

Maybe in this way he'll read my question instead of immediately hanging up!

legalschnauzer said...

Anon at 10:12--

It sounds like the judge in your case used summary judgment as a hammer over your head. That happens in a lot of cases, I think. Sometimes it is used against a plaintiff, to kick out a legitimate case. Sometimes it is used against the defendant to pressure a settlement, as happened with you. All too often, judges and lawyers are not remotely interested in justice. They are interested in moving things along in a way that is advantageous to them.

Anonymous said...

Wedell and Hazelrig claimed records had been shifted to another company? Where did they go? How did that happen? Was Sloan Bashinsky Sr. involved in the decision to move these records around?

This raises a red flag with me.

Anonymous said...

LS: Thanks for staying on top of this story. I live not far from the Bashinsky home, and I don't know of a single serious person in the area who believes Major Bashinsky killed himself.

I don't know what role, if any, the W&H Investment case played in it. But I would be amazed if the official story is true.

My understanding is that Major Bashinsky was aloof, arrogant, and not very likable. He was competitive and hard-edged, and I don't think he really cared all that much what people thought of him. It's hard to see a person with those traits killing himself.

Brad S said...

Schnauzer:

I did a Google search on Hazelrig and Wedell and discovered that they are involved with Edgewater Beach Resort Management, which I believe is in Panama City Beach, Florida. I'm familiar with that area, and Edgewater is a pretty big condo/golf/beach development down there.

I didn't know Hazelrig was involved with the resort business. Here is the link:

http://www.corporationwiki.com/Alabama/Birmingham/edgewater-beach-resort-management-inc-3131348.aspx

legalschnauzer said...

Hmmm, interesting.

Anonymous said...

As far as Bashinsky estate goes it appears his son could use the money stolen from his father. Read this on his blog recently, "...living on the street, which I might be doing again, the way the money supply is looking, unless something happens pretty soon." The something happening probably is his father's wife dying.