A Delaware judge has found an affiliate of El Paso Corp liable for US$171 million for overpaying in a pipeline deal.
A Kinder Morgan Inc. unit has been deemed liable for damages for overpaying in an unfavourable pipeline deal that the judge found was foisted upon it by the parent company.
The judgment is one of the largest from the Delaware Court of Chancery, which is among the country's busiest venues for investor lawsuits.
Directors of El Paso Pipeline Partners LP failed to properly protect investors by agreeing to a deal that forced the master limited partnership to buy El Paso Corp.黑料社檚 interest in natural-gas pipelines at inflated prices, Delaware Chancery Court Judge Travis Laster concluded yesterday.
The partnership黑料社檚 board members 黑料社渨ent against their better judgment and did what the parent wanted黑料社� in approving the pipeline transactions, Laster said in his ruling.
Houston-based Kinder Morgan acquired El Paso Corp. in 2012 for US$21.1 billion and created the US黑料社檚 largest natural gas pipeline network.
Two years later, billionaire Richard Kinder also acquired the portion of El Paso Pipeline Partners he didn黑料社檛 already own as part of a US$44 billion buyout.
Kinder Morgan officials said Monday that Laster黑料社檚 ruling stems from a dispute between El Paso and its affiliate that pre-dated the pipeline company黑料社檚 acquisition.
The opinion blasted directors and advisors for showing indifference to the investors in a master limited partnership controlled by El Paso.
Energy companies have used MLPs to hold assets with steady cash flows, like pipelines. The structures are popular with investors because they deliver higher dividends but have also been far more insulated from investor lawsuits than a corporation.
Edited from various sources by
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