Local News

May 6, 2014 11:49 AM

6 Investigates: Unaccountable

CORPUS CHRISTI - Small businesses across the Coastal Bend felt it when Paul Black's business empire, BNP Petroleum, crashed back in 2009.

It left tens of millions of dollars in unpaid debts in it's wake, including $30 million owed to one investor.

Paul Black was CEO, and in many cases the sole managing partner, over a mind-boggling array of holding companies and subsidiaries where millions came in and went out while business partners and creditors went unpaid.

Paul Black ran oil, gas and real estate ventures right here in Corpus Christi for about a decade from the late 90s through the early 2000's.

Toby Shor was his largest investor. Shor was a silent partner the Black companies starting in 2001. She put about $7 million into the deal.

But Shor says Black pilfered the companies. And in 2010, an arbitration panel agreed with her. They told Black to pay her almost $29 million.

But years and millions in attorney's fees later, Shor is still waiting for Black to pay up.

"How much have you spent?" we asked. "Oh, an astronomical amount. Which is what he wants. This is why nobody gets involved in a lawsuit with Paul Black," Shor told us.

Unlike most of the people and businesses caught up in the Black Company fallout, Shor has the money to hire the best lawyers, but it's not enough.

"The legal system does not work. It's broken. It's completely broken," she told us.

That's because even though his companies are bankrupt, Black also seems to have money and lawyers.

"I win different things over different times and every single court - the bankruptcy court, the state court, the federal court - all of them. I win and he appeals and he appeals and he appeals," said Shor.

So it drags on and on.

"Toby got the arbitration award and she hasn't collected a penny. He's hired 17 different lawyers and it doesn't look like there's any end in sight," said Rick Daly, Shor's attorney in the matter.

"You can't afford justice in this case. You can't afford it," says Shor.

Court records and depositions show Black spent millions on personal expenses and an Ocean Drive lifestyle. A 2004 letter from Black's lawyer to Shor's business manager said Black's companies had taken $3 million from the partnership and spent most of it on two things: renovating Black's Hewit Drive home and funding his then-wife's state senate campaign.

The spending went on for years until the 2009 bankruptcy. Shor says Black knew he was spending money he hadn't earned, but he wouldn't stop.

"He'd write 'No, I'm not going to do that again.' And then, he'd do it again," says Shor.

In the end, the arbitration panel ruled Black engaged in "...precisely of the sort of misbehavior Texas law seeks to deter..."

In reviewing accounting records, KRIS 6 Investigate found that in one 11 day period in 2004, Black received $546,000 in wire transfers.

Over a seven year period, experts say $9 million left the companies and went to pay Paul Black's bills.

Yet even the bankruptcy court can't find a way to get the money back.

"They'll never collect a penny, no chance," says attorney Rick Daly.

In a 2010 deposition about his spending habits, Black says the decision to use hundreds of thousands of dollars in company funds to pay his personal credit card bills was a corporate decision.

Despite the evidence of mismanagement uncovered in that arbitration ruling there's never been a formal investigation. That's because it's very difficult to separate the man, Paul Black, from the companies he built.

Armed with the arbitration findings, Shor appealed to Nueces County District Attorney Mark Skurka in 2011. Skurka passed, saying the case is too complex, too vast, and referred it to the U.S. Attorney in Houston.

KRIS 6 Investigates checked back with the U.S. attorney last week. They said they couldn't even tell if they'd received Skurka's letter, much less comment on anything about it.

But for Toby Shor justice is simple. "He should pay me my money. He should pay me back," says Shor.

It's about more than just her money. In December 2012 during one of the many trials with Black a man approached Shor at the courthouse. He told her his son lost $35,000 to the Black companies.

"This is a working man, who didn't get anything. He couldn't afford to go to court. I'm doing this for him. And everybody else," says Shor.

"She's gone through a lot of things. She has persevered when you and I and pretty much everyone else would've given up. She's a remarkable person," her attorney told us.

As for Paul Black he's kept a low profile. We tracked him down to a couple of San Antonio addresses he used to renew his business license. We wanted to ask him about Shor, the lawsuits, the lifestyle.

The first business, Black Energy Resources told us Paul Black doesn't work there. The second, an automotive distribution business, told us to hit the road.

Here's an interesting note: a man at that first business says it belongs to Black's brother. The automotive parts business belongs to his father.

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