Oil tycoon Grynberg fights with his family over control
Denver oil tycoon Jack Grynberg, whose prolific use of the courts to uncover misdeeds and profiteering by the world’s largest oil companies — and pocketing a fortune as a result — now finds himself dependent on an Arapahoe County jury to help him retain control of his vast holdings.
But his adversaries this time are not BP, Conoco, Shell or the handful of other petroleum conglomerates and foreign governments he has chased around the globe with accusations of cheating and wrongdoing.
Rather, Grynberg, 85, is fending off a hostile takeover of his life’s work by his own family: his wife, Celeste, 81, and their three children — Rachel, 56, Stephen, 54, and Miriam, 52.
The 2016 case has remained hidden from public view, with thousands of pages of court documents filed under seal and few details emerging. The family has steadfastly protected its privacy, saying in court filings that any of the inside details, if known, could seriously damage the Grynberg dynasty of companies that, according to paperwork in the case, are worth more than $1 billion.
A two-week jury trial was to begin next week, but the Colora-
do Supreme Court weighed in, saying the family could not examine Grynberg’s medical records because they are irrelevant to the dispute. The family has a month to convince the justices otherwise or proceed without the records.
Documents that are public offer a tiny glimpse into one of Colorado’s wealthiest families, now divided over petroleum assets that stretch to oil and gas fields as far off as Kazakhstan.
“In recent years, Jack’s increasingly questionable judgment and erratic decision-making have caused Jack’s wife and children mounting concern,” court papers filed by the family state. “Jack’s words … reveal a troubling absence of ethical business judgment …” and his reckless business decisions are merely personal whims that are costing them millions, the family said in the filings.
The documents also paint a portrait of a self-made survivor of the Holocaust who has come to deal with corporate betrayal as merely the way of doing business and who is bitterly disappointed that his spouse and children would “scheme” to wrestle from him control of the companies he created with them in mind.
“He has devoted himself to fighting dishonest and improper practices by some of the world’s major energy companies in various (U.S.) and international courts and tribunals,” according to papers filed by Grynberg’s lawyers, “ruling with an iron fist.” His wife and children “did literally nothing to create this wealth.”
His family, however, says Grynberg is “engaging in less-than-honest conduct in connection with his management” of the companies, even accusing him of trying to take $100 million from the companies as they tried to gain control. Grynberg says he was trying to protect the funds from his children’s money-grab only after they lifted his name from bank accounts holding hundreds of millions of dollars.
Grynberg’s family also says he bought a $600,000 house for his secretary with corporate funds.
Celeste and Jack separated shortly after the lawsuit was filed. Stephen lives in California and his sisters are in Denver.
At the center of the dispute are three companies Grynberg created — Gadeco, Pricaspian, and RSM — that manage his vast oil holdings, each owned by his children, but given with a proviso, he alleges, that he could operate them until the day he dies. His children call that a “last-ditch theory” that’s easily disproved.
Pricaspian is at the hub, withassetsthatpullfromone of the world’s largest oil reserves — the Kashagan Oil Field in the Caspian Sea — which finances the other companies for explorative projects that range from North Dakota to Cameroon. Inthe23yearssincePricaspian was created, Grynberg says his family has pocketed about $160 million, and it has loaned $380 million to other company ventures.
“It’s sad; he’s given them all this money and they’re trying to take it all from him and, in the last few years of his life, he can’t do what he loves to do,” said Greg Tamkin, Grynberg’s lawyer. “For him it’s not about the money. For them, it is.”
Lawyers for Celeste Grynberg and her children did not respond to Denver Post emails seeking comment.
The companies in all hold about $230 million in cash reserves, with multiples of that in future income from operations and investments, court records show.
Gadeco, for instance, “has reserves worth hundreds of millions of dollars, and currently owns a natural gas discovery that has been valued in the billions of dollars over thirty years of production,” according to court records.
It’s unclear why the family is at odds — the original complaint and request for a restraining order remain sealed — but it appears to be partly over a decision Grynberg made last year not to pay an IRS tab of more than $135 million in income taxes.
That bill is accruing an interest charge of about $20,000 a day, and family members see it as reckless if left unpaid, according to court papers. The three companies are structured in a manner that the children could be personally liable for the tab.
Grynberg thought it more reckless to give the IRS anything until settlement talks are completed. He has had a number of IRS battles through the years, bankruptcy records show.
The children are board members and voted him out as president and CEO of all the companies, and told a trio of banks he was barred from accessing hundreds of millions of dollars in company assets — by offspring he says are not qualified. He fired Rachel as chief financial officer in 2015 because “it was a disaster,” according to court papers.
“The true facts, however, will show not a conspiracy, but a family in crisis,” the family says in court papers, and that Celeste “will describe her grave concern aboutJack’srecentbehavior.”
Grynberg rescinded the family’s ownership of the companies, a gift he said he gave them on the promise they each pay $250 for their share — which he says they’ve never even paid.
“I do this with heavy heart, given the complete ingratitude of my children whom I have supported through (their) entire lives, including providing gifts of interests in companies which have earned more than a billion dollars solely through my efforts,” Grynberg said in an affidavit.
His daughter, Miriam, “suffers from medical conditions” and “has not worked a day in her life,” while his other children, Rachel and Stephen, “have wasted the education which I provided.”
Rachel graduated from the Colorado School of Mines and earned an MBA from the Wharton School at the University of Pennsylvania. Stephen has a chemical engineering degree from Northwestern University, an MBA from Columbia University and a degree in directing from the American Film Institute.
“Rachel dabbles in art in Denver and Stephen pretends to be a film maker in Los Angeles,” Grynberg’s affidavit says. “Neither do anything productive. … I have decided enough is enough … They have no ability to manage these companies.”
Stephen Grynberg wrote and directed the critically acclaimed “Love From Ground Zero” in 1998, and recently a documentary, “A Life Ascending.”
The elder Grynberg made much of his fortune suing oil companies — sometimes countries — over their dealings. In 2006, he sued about 300 energy companies for allegedly defrauding the federal government out of about $30 billion in royalties. Such private claims on behalf of the government entitle whistle blowers a portion of a judgment or settlement. The suits were tossed by a federal appeals court.
Grynberg hit the papers again in 2016 when he was arrested for allegedly grabbing a woman’s breast and trying to kiss her. The charge was dropped three months later.