NEW YORK, February 23, 2017 /PRNewswire/ --

A New York court has granted London-based commodity trader TransAsia Commodities Ltd. a major victory in its three-year battle seeking damages for breach of contract and fraud against Greek shipping company NewLead Holdings Ltd.

Judge Charles Ramos of the Supreme Court of New York County found NewLead and related defendants to be in contempt for multiple failures to comply with demands for evidence. As a consequence, he struck the defendants' responses to the claim and delivered a default judgment.

The judgment was rendered at a hearing Jan. 19 and confirmed with the release Wednesday of a signed order. NewLead and other defendants, including former CEO Michael Zolotas, failed to appear and were not represented by counsel. Co-defendant Jan Berkowitz, CEO of a US subsidiary called NewLead JMEG LLC, was the subject of a similar default judgment in December. Motions submitted by TransAsia had sought the Court to impose a constructive trust in the amount of $12 million to cover TransAsia's damages. However, Judge Ramos has referred the issue of compensatory and punitive damages, including "reasonable costs and attorney's fees" to a Special Referee which will make recommendations later.

TransAsia's claims arose from contracts it signed with NewLead JMEG in 2013 for the purchase of coal which, according to court documents, NewLead never owned from mines it also did not own.

False counterclaims filed by the defendants against TransAsia forced its owner Serge Turko to place his company into administration. The counterclaims were subsequently withdrawn.

"Our client's business was devastated by the conduct of these defendants," TransAsia attorney Eric Freed of Cozen O'Connor LLP said today. "We hope that with the entry of these default judgments, this long ordeal will soon be over."

According to an amended complaint filed in April last year:

"Defendants used public filings and press releases about the offtake coal contracts to entice investors to purchase and drive up the price of NewLead Holdings' shares. They then issued millions of shares of NewLead Holdings stock to themselves as salary and bonuses, and to companies owned by them, their family members, and their close associates, who were disguised as 'consultants' and 'vendors.' Defendants then lined their own pockets by selling the shares at inflated prices to the unsuspecting stock buying public, who relied on the company's deceptive press releases touting their supposedly successful entry into the coal mining business."

This complex "pump and dump" scheme was intended initially to retain NewLead's listing on the NASDAQ exchange by meeting listing standards for share price and market capital. Nonetheless, NewLead was forced to de-list in 2014 and its shares currently trade on the OTC Pink market.

Michael Zolotas is currently awaiting trial in Cyprus on unrelated charges connected with allegations of bribery against a former governor of the EU nation's central bank.

SOURCE TransAsia Commodities Ltd.