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)
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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