Forum-shopped judge issues ruling in Kentucky … judicial review to follow
A bankruptcy court judge in Kentucky ruled on October 27, 2025 that the City of Oakland caused damages, in an amount yet to be determined, to Insight Terminal Solutions (ITS) when it canceled developer Phil Tagami’s lease on a parcel of West Oakland waterfront.
United States Bankruptcy Judge Joan Lloyd will hold a status conference on December 2, 2025, to discuss “remaining issues regarding the appropriate damage award.”
ITS has a sublease on 19 acres that it obtained from Tagami with a $6 million payment in 2018. Just weeks after the sublease was signed, the City cancelled Tagami’s master lease for failure to get construction underway. ITS is a startup company whose only asset is the sublease, and is now owned by Southern California hedge fund operator Jon Brooks. According to ITS’s expert witness, the sublease was worth $673 million – more than 100 times the amount ITS paid Tagami to “take down” the lease.
In 2018, Tagami sued the City asserting that his nonperformance was caused by the City’s own actions to block development of a coal terminal in Oakland. In early 2024, Alameda County Superior Court Judge Noël Wise ruled that the City of Oakland wrongly terminated the developers’ lease, but denied the developers’ claims for $159.6 million in damages, mostly for “lost profits,” on grounds the claims were “speculative and unreliable.”
While funding Tagami’s lawsuit, ITS sat on the sidelines although it could have presented its claims for damages in the same action. After Tagami lost on damages, ITS filed its lawsuit in a Kentucky bankruptcy court claiming more than a billion dollars in damages based on the same underlying facts. The City cried foul, arguing, on numerous grounds, that the Kentucky bankruptcy court had no jurisdiction to hear the case and that, in any event, it should be sent to a federal court in California for resolution.
Commenting on Judge Lloyd’s decision, No Coal in Oakland issued the following statement:
“This ruling is the result of extreme forum-shopping. Rather than bring its California law claims in a California court, ITS found a willing partner in a Western Kentucky bankruptcy court. Judge Lloyd not only ruled that she had jurisdiction to hear ITS’s California law claims; she has ruled in ITS’s favor on issues large and small.
“Judge Lloyd’s decision holding the City liable for damage ignores the conclusion reached by Judge Wise, now a federal district judge in Northern California, that damages caused by the City’s cancellation of the lease were too speculative to meet the requirement under California law that damages be provable with ‘reasonable certainty.’
“In her decision, Judge Lloyd appears to pick and choose which parts of prior legal decisions to adopt and which to discard. We look forward to the review of her order by a federal district court judge.”
Construction and operation of a coal export terminal on our city’s waterfront will continue to face unrelenting opposition from the people of Oakland, the Bay Area, and California. The ninety organizations and over 1,000 individuals who signed an open letter to hedge fund operator and West Gateway sublessor Jon Brooks earlier this year are the tip of the spear. Reverend Ken Chambers of West Side Missionary Baptist Church, founder and president of the Interfaith Council of Alameda County, warned in March 2025 that the open letter “is a signal to Jon Brooks: Trouble Ahead! if you continue to pursue coal.”
Image credit: Julian Lupyan, via Wikipedia Commons (public domain, Creative Commons CC0 1.0 Universal Deed), cropped.
