A routine "freight on board" (FOB) transaction between agricultural exporter Lombard Trading International and global food supply chain business Sadot Latam LLC has turned into a complex web of deceit that courts may have to resolve.
The deal between the two international brokers last year was simple. Lombard contracted to sell Sadot 20,000 tons of soybean meal to be delivered and paid for at the port of San Lorenzo, Argentina. The product's final destination: Lebanon.
Among details of the transaction, Sadot was to decide who would ship the product and who the buyer would be at the final destination.
According to GPS readings, the cargo is in international waters between Lebanon, Cyprus and Syria aboard the MV Princess Maria.
But the $7.4 million invoice for soybean meal - used for animal feed, human food and industrial products - remains unpaid.
It cannot be unloaded in Syria as the civil war torn country was on a list of excluded recipient nations from the original Aug. 6, 2024 freight agreement between Lombard and Sadot Latam. Furthermore, shipping documents related to the transaction indicate that the final buyer of the product is purportedly a Syrian-based business that cannot accept the shipment because it's listed on the U.S. Treasury's Office of Foreign Assets Control's sanctions list.
The cargo also cannot be unloaded in Lebanon without a legitimate buyer. Even if there were, the Lebanese government has a financial fraud order to seize the product and arrest the ship operator.
Lombard accuses original buyer Sadot Latam of fraud over failed attempts to receive payment for the shipment that remains at sea.
Payment was due on the date of shipment, Sept. 4, 2024. By Oct. 8, when payment was not received, Lombard issued a stoppage in transit notice to MV Princess Maria owner - Santa Maria SA - which operates a fleet of general, bulk carrier and container vessels based out of Athens, Greece. The notice indicated Lombard could hold Santa Maria liable for unlawful conversion of the goods.
Another party to the alleged fraud is Nuval Trade SA, an international grain distributor in Dubai, United Arab Emirates, which was named as the buyer of the product from Sadot Group in Santa Maria transaction documents.
"We confirm that payment to Lombard for the remaining BLs (bill of lading) will be made upon receipt of the first original BL paid by Sadot," wrote a Nuval attorney to a Lombard official.
The tangled deal gone awry is the subject of a civil fraud and conversion lawsuit pending in Miami Dade County circuit court.
Lombard Trading International is seeking up to $22 million in damages from Sadot Group, Inc. and Sadot Latam, with offices in Coral Gables, over their failure to pay $7,442,799.88 for the soybean meal product.
Lombard's complaint accuses Sadot Group of knowingly failing to meet its obligations, with the company admitting to owing the payment but not fulfilling it.
According to the case docket, defendants have not responded to the complaint.
Michael J. Roper is CEO of Sadot Group, Inc., headquartered in Fort Worth with Florida offices.
On its website Sadot touts its “sustainable” practices and engagement in controversial environmental, social and governance funds.
“Food security and ESG are key initiatives at the core of Sadot Group's commercial aspirations,” Sadot’s website reads.
In a filing with the Securities and Exchange Committee (SEC) Sadot Group, Inc. laid out objectives of its Sustainability Committee including reviewing and making recommendations to the Board on the Company's policies and performance related to the environment, climate change, human rights, historical cultural heritage and land access as well as ESG.
The company's largest shareholders are Moshe Aaron Bergman (11.51 percent of company) and Armistice Capital, LLC (7.02 percent of company).
Sadot Group was created in 2022 when publicly-traded Muscle Maker Inc. merged with Aggie FZ LLC, a "global supply chain consulting operation" based in Dubai, according to the company's web site.