In late 2012, Lafayette businessman Mike Moreno, an entrepreneur in his mid-40s who has been a millionaire many times over, started exploring a power generation business for his Green Field Energy Services, a Lafayette-based company primarily involved in the fracking business. Initially, according to court records filed in the Green Field Chapter 11 bankruptcy case, Green Field planned to develop the business to complement its existing well services and hydraulic fracturing biz.
“In fact, GFES and its employees worked to develop the Power Generation Business and Mr. Moreno sought financing for the business from numerous sources, including the Noteholders, General Electric Corporation, and many others,” writes Steven Felsenthal, a former chief judge of the U.S. Bankruptcy Court in Dallas who was appointed examiner by U.S. Trustee Roberta A. DeAngelis. As the court-appointed examiner, Felsenthal has investigatory power in the case; his 135-page report is a stinging critique of Moreno’s management of the company and opens the door for the bankruptcy trustee to file suit against Moreno. Moreno was chairman of Green Field’s board of directors and its CEO. Read more on Felsenthal’s investigation here.
Ultimately, Moreno pursued the power generation business outside of Green Field’s corporate structure, allegedly because Green Field was unable to obtain adequate financing to pursue development of the business, according to Felsenthal.
On March 7, 2013, Moreno’s MOR DOH Holdings LLC formed the company Turbine Generation Services. Two months later, about the time Green Field’s shareholders and directors agreed to waive the opportunity to pursue the power generation business on their own, GE Oil & Gas loaned Moreno $25 million to purchase equipment to get the business going. One month after Green Field waived its opportunity, Felsenthal notes, Powermeister LP, an entity unrelated to Green Field or its equity holders, bought 9.6 percent interest in Moreno’s MOR DOH for $20 million.
The loan to GE was supposed to be paid in full by Sept. 13 of that year, but Moreno failed to make any payments. GE, apparently in an effort to work with him, extended the payoff date three times, eventually giving Moreno until Dec. 29 to make good on the loan. Still, nothing.
On April 4 GE filed suit, seeking to recover the principal plus interest, what it says now amounts to more than $27 million. GE is going after TGS’s assets and Moreno himself, as he personally guaranteed the loan. According to the suit, MOR DOH Holdings (“more dough?”) has two members, trusts that share a managing trustee, Dalis M. Waguespack, Moreno’s sister.
Initially the interest rate on the GE loan was 12 percent, compounded quarterly, but after the December maturity date, it hiked to 20 percent, also compounded quarterly. GE is also seeking attorneys fees.
|Although it is not the Dallas home he calls his principal residence in loan documents with GE Oil & Gas, Mike Moreno purchased this Dallas home in the months leading up to Green Field's bankruptcy (which listed for $14 million) from former Dallas Cowboys QB Troy Aikman.|
Moreno has not answered the suit. The extravagant spender who owns homes in multiple states, including a gaudy mansion on Worth Avenue in River Ranch, lists a home on Arcady Street in Dallas as his principal residence.
His wife Tiffany also signed the note on the GE loan. View the guarantee agreement, Exhibit G in the lawsuit, here.
Moreno is a Cuban immigrant who grew up in Lafayette and earned an MBA from UL Lafayette. He was once the success behind several local oil and gas service companies, including Dynamic Industries, and is widely known as consummate risk-taker always chasing the next deal — which, inevitably, ended up in legal action.
He also likes yachts and airplanes and collects multi-million-dollar thoroughbred race horses. In 2008 he paid a staggering $14 million for a 12-year-old thoroughbred broodmare at the Fasig-Tipton select mixed sale in Lexington, Ky., a world-record price. Moreno actually already owned 70 percent of the mare, but his partnership was dissolving. He spent a total of $23.5 million at the sale and at the time was positioned to become one of the top five thoroughbred owners in the world.
A local attorney who asked not to be identified and is not involved in the case says the GE claim could be a drop in the bucket for Moreno (but it will definitely provide a glimpse into his financial situation and the toll recent troubles have taken) if legal action is taken against him.
Felsenthal's report, which is particularly critical of Moreno's role with Turbine Generation Services, gives her all the ammunition she needs. Read his report here.