A military contractor who lives in Louisville must compensate his former Afghanistan-based business partner more than $33 million for breaching contracts.
Papers filed June 7 in the U.S. District Court in Knoxville require Eric Barton to pay $33,428,859 to his former business partner, Shafiqullah Koshani.
A federal jury found on May 22 that Barton, who is president and corporate executive officer of Knoxville-based Vanquish Worldwide LLC, breached a profit-sharing agreement by knowingly obtaining contracts under a different corporation than they created to bid for Army contracts for a variety of U.S. and coalition ground services in Afghanistan.
Koshani presented the court with a joint venture agreement he signed with Barton in December 2010 that established Vanquish Worldwide as a Kabul-based agency.
Barton and Koshani sought to obtain a National Afghan Trucking Services contract under a federal agreement that allowed U.S. companies to operate in Afghanistan while allowing Afghan-owned companies to derive 51% of profits and perform the majority of work with native labor.
The agreement also required mutual consultation before signing contracts, mutual disclosure and approval of all contracts. The men also were required to copy each other on all contract-related correspondence.
The joint venture agreement stipulated Koshani would receive a 51% share of profits and absorb 51% of losses from the company.
It was amended as an even split with a profit-sharing agreement both men signed on Sept. 11, 2011.
The second agreement also listed Koshani as president of the corporation’s Kabul branch. Barton, who lived in Blount County and operated local businesses, was named as president of the U.S. division registered in Wyoming and as vice president of the Kabul site.
Koshani’s suit claimed he provided 80% of $1.3-million startup funding, plus equipment, assets and field contacts. Barton contributed $250,000, court documents show.
The suit alleges Barton initially made payments to Koshani under the NATS agreement but stopped in 2012, first claiming that he was repaying a loan Koshani claimed he never made, and then cutting Koshani entirely out of the agreement.
The NATS contract eventually paid Vanquish Worldwide LLC $32 million, according to the lawsuit, which Koshani estimated represented $5.5 million in profits that he lost.
Koshani alleged that Barton created a fake memorandum of agreement he submitted to the Army without his knowledge that reduced the Afghan company to subcontractor status while accepting contracts under Vanquish Worldwide LLC, which operated independently in Blount County.
After Koshani found out about the act, he agreed to continue as a partner but stipulated the original contract would be honored, according to the lawsuit.
Barton, a Marine Corps veteran, already operated a series of Blount County contracting firms including Critical Mission Support Services, which provided a variety of military and governmental security, construction and information technology services.
Operating as Relyant, Barton also began contracting in 2010 to remove unexploded ordnance and mines in southern and western Afghanistan.
Koshani sued Barton and Vanquish Worldwide LLC in June 2017, seeking $5.5 million in compensation for an estimated $11 million the company had earned in profits through that point.
Barton’s companies were awarded numerous service contracts after 2010, including warehousing and material support contracts for the Army Logistics Readiness Center at several domestic military bases, including Fort Bragg, North Carolina; Eglin Air Force Base, Florida; Fort Rucker, Alabama; and both Fort Stewart and Hunter Army Airfield in Georgia.
The company also serviced contracts for the Army Strategic Command’s 1st Space Brigade, the Environmental Protection Agency and various domestic military bases.
Barton has positioned himself as a supporter of education and law enforcement in recent years, providing $3 million in cash and future proceeds from a property sale to the University of Tennessee to fund scholarships for the dependents of law enforcement employees.
About $1 million of that endowment would first require the sale of real estate, the college acknowledged in an April press release.
Barton’s other holdings have included a Gypsy Vanner horse farm, LexLin Gypsy Ranch in Rockwood, and Villa Collina LLC, which he used to purchase a a 40,000-square-foot home for $6.375 million in 2016, according to WBIR-TV.
The Knox County home, which has been used in the past for fundraising events, went up for sale for nearly $15 million in 2018.
Attorneys for both parties and Barton could not be reached by press time Thursday.