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Mammoth Energy Services loses board member after reporting disagreement

A helicopter lifts a power line for Cobra Acquisitions crew members as they work to restore power to Puerto Rico in 2018.  [THE OKLAHOMAN ARCHIVES]
A helicopter lifts a power line for Cobra Acquisitions crew members as they work to restore power to Puerto Rico in 2018. [THE OKLAHOMAN ARCHIVES]

Mammoth Energy Services announced this week that it and a board member have parted ways over a disagreement about whether the company is appropriately reflecting risk associated with money it is owed for work it did in Puerto Rico.

Jonathan H. Yellen, the company stated in a regulatory filing, submitted his resignation to the company on May 8 and followed that up with a letter dated May 13.

Yellen noted that as of March 31, Mammoth remained owed $227 million, plus nearly $50 million in interest, for work its electrical infrastructure subsidiary, Cobra Acquisitions, did for the Puerto Rico Electric Power Authority as it helped the latter rebuild its electrical power grid after Hurricane Maria.

“The amounts involved are significantly higher than the company’s current market capitalization and, therefore, are undoubtedly material,” Yellen wrote in his letter.

As Mammoth attempts to obtain those funds, a criminal case brought against a former top executive of its infrastructure division proceeds. A federal grand jury meeting in Puerto Rico indicted Keith Ellison last year, accusing him of illegally influencing federal officials to gain business there.

Yellen wrote he also decided to resign over other frustrations he had with his company’s fellow board members, particularly when it came to selecting new board members and evaluating the independence of those already in place.

“I was frustrated by the cavalier approach taken toward corporate governance.”

In its filing disclosing Yellen’s departure, Mammoth noted he had been a member of the board’s nominating and corporate governance, audit and compensation committees.

The filing stated Mammoth disagrees with Yellen’s comments related to the way its board operates, and also stated it disagrees with his assertion that the owed funds are not appropriately presented and disclosed, noting descriptions of the ongoing issue are included in both its Form 10-Q for the first quarter of 2020 and its Form 10-K annual report for 2019 that it filed with the U.S. Securities and Exchange Commission.

“The company’s position follows a full discussion and review of the matter by management and the (board’s) audit committee,” its filing states.

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›