"Contogouris had been uncomfortable with Smith's involvement in OTS, and therefore explored options for buying out Smith and Costner or alternatively withdrawing from OTS along with Baldwin by selling his interest to Smith, Costner and/or Westpac," the suit claims.
Then on June 8, 2010, an executive of BP, Doug Suttles, met with Costner, Smith and one of their colleagues in New Orleans during which Suttles "committed BP to order units of the separator" and agreed to make an $18 million deposit against the total purchase price.
Contogouris and Baldwin claim they had no knowledge of the deposit at the time and they claim Smith had told Contogouris that BP "had in fact not placed an order, and these statements were being made by Costner" and a colleague to "pressure BP into making an order."
The plaintiffs claim Smith and Costner "intended to use OTS' monies from the BP deposit to purchase their personal interest in OTS" in a "scheme to deprive plaintiffs of their pro-rata rights to the distribution of these monies prior to the sale of their interests."
According to a court document filed by Baldwin on March 3, 2011, Baldwin and Contogouris entered into an agreement in which Contogouris would convey his 28 percent interest in OTS to Smith or WestPac for $1.4 million, and Baldwin would transfer his 10 percent interest to Smith or WestPac for $500,000.
On June 11, 2010, wire transfers in the amount of $140,000 and $50,000 respectively were sent from WestPac's bank account to Contogouris and Baldwin's bank accounts, representing the down payment.
According to a court filing, Baldwin and Contogouris claim the agreement was "an agreement to sell, and thus was not to become effective until paid in full by Patrick Smith and/or Westpac in accordance with the agreement."
"Unbeknownst to both Baldwin and Contogouris at that time," BP issued a purchase order to OTS on June 12, 2010 for 32 units for a gross price in excess of $52 million, according to a court document. At that time, Baldwin and Contogouris say they were still shareholders of OTS.
On June 15, BP's Doug Suttles announced publicly that an order for 32 units had been placed and BP wired the $18 million deposit to OTS on June 16, 2010. But Baldwin and his partner "were completely unaware of this advance" until July 12, 2010.
Unfortunately for them, on June 18, 2010 Contogouris and Baldwin say they honored their contractual obligation and transferred their membership interests to Smith and WestPac.
ABC News' Barbara Garcia, Matt Gutman and Sheila Marikar contributed to this report.