SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) - August 17, 1999
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AMERICAN ECO CORPORATION
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(Exact name of registrant as specified in its charter)
Ontario, Canada 0-10621 52-1742490
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(State or other jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
154 University Avenue, Toronto, Ontario M5H 3Y9
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code - (416) 340-2727
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Not Applicable
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(Former Name or Former Address, if changed since last report)
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Item 1. Legal Proceedings
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On August 17, 1999, American Eco Corporation (the
"Company") was notified that Pride International, Inc. ("Pride")
had commenced an action against the Company and its wholly-owned
subsidiary MM Industra Ltd. in the District Court of Harris
County, Texas, arising out of Pride's interest in Petrodrill
Offshore, Inc. ("Petrodrill"), a joint venture formed to
construct and own offshore drilling rigs known as the Amethyst
rigs. Two of these rigs were to be constructed at the shipyard
of Davie Industries, Inc. ("Davie") in Quebec, Canada. As part
of arrangements with Davie and its parent corporation, the
Company had arranged for a C$10 million performance bond to be
issued to Petrodrill, and Davie had subcontracted certain work to
MM Industra.
Petrodrill was to make certain installment payments to
MM Industra for the construction of the two rigs. The second
installment of $32 million due on August 18, 1998 was not paid, and
on August 28, 1998 MM Industra notified Petrodrill that it was in
default and construction ceased. Over the next months discussions were
held among the parties regarding their agreements, however no
resolution was reached.
On July 28, 1999, the Company and MM Industra filed an
Amended Statement of Claim in the Superior Court of Justice,
Ontario, Canada, against Pride, Petrodrill and the issuer of the
performance bonds seeking the release of the performance bonds to
the Company, and inter alia, damages of $50 million from Pride and
Petrodill, plus $32 million from Pride and Petrodrill for the default
in the August 18, 1998 installment and $5 million which remains in an
escrow account established for the first installment from Petrodrill
to MM Industra, as well as the return of the unearned portion of the
premium paid to the issuer of the bonds of approximately $1.4 million.
The defendants have not yet answered or moved in this action.
The Texas action brought by Pride alleges that the
Company and MM Industra made certain misrepresentations to Pride
and also engaged in conduct to cause injury to Pride for which
Pride with respect to its interest in the joint venture and is
seeking actual damages of at least $200,000,000, plus exemplary
damages and costs.
The Company intends to pursue vigorously its Ontario Canada
action and to defend fully the Pride action in Houston, Texas as it
believes that there is no merit to Pride's allegations.
Item 7. Financial Statements and Exhibits
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(c) Exhibits.
99 Press Release, dated August 20, 1999
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
AMERICAN ECO CORPORATION
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(Registrant)
Dated: August 24, 1999 By: /s/ Michael E. McGinnis
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Michael E. McGinnis,
President
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EXHIBIT 99
[AMERICAN ECO LOGO]
NEWS RELEASE
American Eco Corporation, 11011 Jones Road, Houston, Texas 77070
For Immediate Release
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AMERICAN ECO AND PRIDE INTERNATIONAL IN COUNTER CLAIMS OVER DEFAULT
OF AMETHYST OIL PLATFORMS
HOUSTON, August 20, 1999 - AMERICAN ECO CORPORATION (NASDAQ: ECGO,
TSE: ECX) and its subsidiary MM Industra of Halifax, Nova Scotia,
announced that they had filed an amended complaint in Toronto,
Canada on July 28, 1999 against Pride International, Inc., of
Houston, among others, concerning the August 1998 default of a
US$161.0 million contract by reason of a failure to make the second
payment due for construction of the Amethyst II & III oil drilling
platforms.
On August 17, 1999, American Eco was served with a counter suit for
US$200.0 million from Pride International in state court in
Houston, Texas, in regard to the same contract. Pride acknowledged
the existence of the prior Ontario lawsuit. American Eco believes
that, "Pride is abusing the legal process by launching a counter
suit to avoid the jurisdiction of the Superior Court of Ontario, in
an attempt to move the action to Harris County District Court in
Texas."
American Eco further stated, "The false claims of Pride are
completely without merit and that certain funds should be
immediately released to American Eco under the terms of the
defaulted contract, and the balance of American Eco's claims should
be litigated."
AMERICAN ECO is a leading consolidator of outsourcing services to
the energy, pulp & paper, power generation and construction
management service industries.
Except for the historical information in this News Release, the
News Release includes forward looking statements that involve risks
and uncertainties including, but not limited to quarterly
fluctuations in results, the management of growth, competition and
other risks. Actual results may differ materially from such
information set forth herein.
# # # #
For additional information, contact:
Michael E. McGinnis Michael Appling Jr.
President & CEO Cheif Financial Officer
Houston, Texas Houston, Texas
(281) 774-7000 (218) 774-7000
www.americaneco.com
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[email protected]
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