On Friday, Arrow Material Services (based in Sewickley, PA) filed a lawsuit against Superior Silica Sands, also known as Emerge Energy Services (based in Fort Worth, TX) in Allegheny County Court for $24.9 million alleging breach of contract in providing frac sand.
Arrow and Superior signed a deal in 2015 that stipulates Arrow will operate a transloading facility in San Antonio, TX–called the Alamo Junction Transload Facility–and that Superior would not only supply X amount of frac sand to the facility (some of which gets shipped to the Pittsburgh area), but Superior would also reimburse Arrow for renting the facility. Arrow says Superior hasn’t shipped enough sand, and hasn’t reimbursed its rent. Therefore, the entire contract is forfeit and the entire contract (for 10 years) is worth $24.9 million.
A Pittsburgh-area logistics company is demanding nearly $25 million from a Texas fracking sand supplier for its failure to pay its bills and provide enough sand for the pair’s Lone Star State shipping operation, according to a suit filed Friday in Pennsylvania court.
In a complaint filed in the Allegheny County Court of Common Pleas, Sewickley, Pennsylvania-based Modern Materials Solutions, doing business as Arrow Material Services, said it had entered a 10-year contract with Superior Silica Sands, wherein Arrow would rent and operate a third-party San Antonio facility for moving frac sand as long as Superior moved at least 370,000 tons of sand per year through two buildings at the facility.
But Arrow said Superior didn’t meet its minimum performance obligations and had missed payments to Arrow worth a total of nearly $390,000, so the Pittsburgh company filed a claim for breach of contract Friday demanding the company pay off its remaining bills, rent and tonnage obligations for a total of $24.9 million.
“As a result of Superior’s statement that it will not pay Arrow, Arrow should be awarded all sums due on the remaining terms of the agreement,” the complaint says.
Superior signed a deal in January 2015 stating that Arrow would lease and operate the so-called Alamo Junction Transload Facility for a term of 10 years, the lawsuit said. Arrow leased the facility from its owners and, in addition to Superior having to move 250,000 tons of sand a year through one building and 120,000 tons a year through another, the Texas company was on the hook for reimbursing Arrow for its rent and expenses at the facility.
But at some point not specified in the complaint, Superior allegedly said it would not pay. The remaining tonnage obligations added up to $17.8 million, and the remaining rent was about $6.8 million, the lawsuit said.
“Superior has further willfully breached this agreement and has stated its intent to refuse to honor the financial terms of the agreement,” the complaint says.
In addition to accelerating the company’s payments under its contract, Arrow is seeking prejudgment interest, attorney fees and costs from Superior.
Superior filed a lawsuit in a Texas state court March 15 alleging that EP Energy E&P Co. LP had failed to buy the minimum amount of sand from Superior that the companies had agreed upon. Representatives of Superior were not immediately available to comment on Arrow’s suit or whether the two cases are related.*
*Law360 (Mar 29, 2019) – Texas Frac Sand Supplier Hit With $25M Suit By Pa. Partner
Copy of the Arrow lawsuit filed in Allegheny County Court:
arrow v. superior silica sands – complaint
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