WILMINGTON, Del.—TC Energy Corp. and two former Columbia Pipeline Group Inc. executives must defend against a lawsuit claiming the companies’ $10 billion merger in 2016 shortchanged Columbia investors, a Delaware judge ruled on March 1.
Vice Chancellor Travis Laster of the Delaware Chancery Court refused to dismiss the lawsuit by former Columbia shareholders, led by the Public Employees’ Retirement System of Mississippi.
Former Columbia CEO Robert Skaggs and CFO Stephen Smith were accused of engineering a spin-off of Columbia from NiSource Inc., and then selling Columbia to TC Energy at a lowball price to obtain lucrative change-of-control payments, known as golden parachutes.
Laster said it was reasonable to infer that Skaggs and Smith breached their duty of loyalty to Columbia by agreeing to sell their company for $25.50 per share, below the $26 per share proposed by TC Energy, then known as TransCanada Corp.
Laster also said the Canadian company could be liable for aiding and abetting that breach.
The defendants could face damages for the difference between the sale price and what Columbia might have fetched had it held out for a higher price.
A lawyer for TC Energy, Skaggs and Smith declined to comment.
The investor lawsuit is the fourth over the sale of Columbia, which created one of North America’s largest regulated natural gas transmission businesses.
Two of those lawsuits were dismissed in the early stages. In the third, known as an appraisal case, Laster found that the $25.50 per share takeover price was fair.
The defendants said that decision should have precluded the fourth lawsuit, but Laster said the legal questions and standards were different.
Recommended Reading
Upstream, Midstream Dividends Declared in the Week of July 8, 2024
2024-07-11 - Here is a selection of upstream and midstream dividends declared in the week of July 8.
Solaris Stock Jumps 40% On $200MM Acquisition of Distributed Power Provider
2024-07-11 - With the acquisition of distributed power provider Mobile Energy Rentals, oilfield services player Solaris sees opportunity to grow in industries outside of the oil patch—data centers, in particular.
Exxon’s Craig Morford Retires as VP of General Counsel, Secretary
2024-06-12 - Exxon’s board of directors has elected Jeff Taylor, who joined Exxon in May, to undertake Morford’s role.
Swift Solar, with Backing from Italy’s Eni, Raises Tech Financing
2024-06-12 - Swift Solar, with backing from Italy’s Eni and others, has raised a total of $44 million for work transforming the solar energy landscape with perovskite tandem solar projects.
Producers Trim 2024 Hedges Amid Bullish Oil Prices, M&A
2024-06-14 - Meanwhile, gas-weighted players are benefitting from solid hedge books planned ahead of price uncertainty.