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Dispute Over Oil and Gas Investments Preceded Major Bashinsky's Mysterious "Suicide"

Posted on the 15 August 2012 by Rogershuler @RogerShuler

William Cobb "Chip" Hazelrig

In the months leading to Major Bashinsky's death in March 2010, court documents show that his father's estate was being stonewalled in a lawsuit over proceeds from Oklahoma oil and gas wells.
Is it coincidence that Bashinsky was reported missing just two days after the contentious lawsuit concluded? We do not have a definitive answer to that question. But public records show that Sloan Y. Bashinsky Sr. invested more than $37 million in the wells, via partnerships with W&H Investments of Birmingham, and his estate was trying to determine his share of the profits.
That sounds like it should have been a fairly straightforward endeavor. Code of Alabama 10-8A-403(c)(2) makes it clear that W&H's Fred Wedell and William Cobb "Chip" Hazelrig had a duty to turn over pertinent information to the estate of a deceased partner. And court documents show that Sloan Bashinsky and his advisers tried to obtain the information while he was alive, in order to prepare an estate disposition plan. Even after Mr. Bashinsky's death in August 2005, the estate tried to resolve the matter without filing a lawsuit.
Why was a lawsuit required, and why did it drag on for almost four years, with the estate apparently never receiving adequate answers to this question: "What happened to Sloan Y. Bashinsky Sr.'s money?"  Why was the process so difficult when it seems clear that the estate was legally entitled to the information it sought? Did the lawsuit become so rancorous that a member of the Bashinsky family became "collateral damage"--paying with his life over issues that did not directly involve him?
We know that Hazelrig has ties to both the gaming industry and to powerful figures in Alabama Republican Party circles. Did the prying eyes of the Bashinsky estate prove so unnerving that someone, perhaps a non-party to the lawsuit, felt the need to send a lethal warning shot?
This much is clear from an objective review of the court record: Hazelrig and Wedell were not anxious to turn over information about their business affairs, and they gave the distinct impression of trying to hide something. The estate had to file at least a half dozen motions to compel during the discovery process--with all of them being granted--and those documents show just how deeply W&H was willing to dig in its heels. Let's consider information from one of the early motions to compel, filed on August 30, 2007. The full motion can be viewed at the end of this post:
An Elaborate Shell Game?
The estate contends that it notified W&H of the need to maintain records related to Bashinsky's investments. So what happened? The records, according to court documents, wound up with Enterra Energy Trust, a Canadian outfit that became the operator of Birmingham Exploration Venture (BEV) partnerships, which now is being operated under the name Altex Energy. "They are out of our control and cannot be produced," W&H responded, in so many words. The estate was not amused. From the motion to compel:
It is a matter of record that Defendants Wedell and Hazelrig, through W&H, once had custody and control of the documents at issue and transferred them to Enterra without Bashisky's knowledge or consent. Moreover, such transfer was made after Defendants were on notice that the documents were sought by Bashinsky and the representatives of his estate.

Well . . . Well . . . Wells
In how many wells did Bashinsky hold an interest? You might think it would be fairly easy to answer that question--but you would be wrong. From the motion to compel:
To date, Defendants have provided lease assignments regarding a number of wells in which the BEV Partnerships held an interest. Admittedly, in some instances, it is difficult to determine the actual wells to which the lease assignments refer. However, according to the Plaintiffs' best judgment at this time, the number of assignments provided refers to 43 wells. However, according to the well list prepared by Plaintiffs from the information contained in the BEV Partnerships' tax records, the BEV Partnerships held an interest in 288 wells. Inexplicably, among those lease assignments produced, twelve were executed in 2006, several months after Bashinsky's death.

A reasonable observer can understand why the estate had concerns about the W&H record keeping.
What's In A Name?
Court records suggest that the estate was perplexed that Mr. Bashinsky's funds were transferred to various entities without his knowledge. And the estate seems particularly suspicious of the relationship between W&H and Enterra, the company based in Canada:
Defendants have produced no contracts between W&H and Enterra subsidiaries Altex Resources/Energy to operate wells in which the BEV Partnerships have an ownership interest. Therefore, Plaintiffs are unable to determine the specifics of the operating agreement or the compensation paid to Altex Resources/Energy for operating the wells. Defendants would instead have Plaintiffs accept at face value computer data generated by Defendants' accountants, after the fact, without any supporting records to verify the validity and accuracy of the data. Plaintiffs can only conclude from the lack of written operating agreements between W&H and Enterra that the two entities have an especially close relationship.

One gets the impression that Mr. Bashinsky, during his life, was kept in the dark about the relationship between W&H and Enterra. And it appears that deception continued after his death.
Why was someone trying to hide information about Mr. Bashinsky's investments? And did that game of hide-and-seek, involving perhaps $100 million or more, contribute in some way to Major Bashinsky's death?
We will continue to examine that question.
(To be continued)
Bashinsky Lawsuit--Motion to Compel1

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