Sept. 9 — An investor has sued Williams Co. directors, claiming they breached their fiduciary duties by causing the company to take “irresponsible defensive tactics” to thwart an acquisition by Energy Transfer Equity LP ( Ryan v. Armstrong, Del. Ch., No. 12717-VCG, redacted complaint filed 9/8/16 ).
Williams owns 60 percent of a master limited partnership—Williams Partners LP—that operates more than 33,000 miles of gas pipelines. Shareholder Walter Ryan Jr., in a redacted complaint filed Sept. 8 in the Delaware Chancery Court, alleged that the board caused Williams to enter into an agreement to buy the remaining units of the limited partnership to rebuff Energy Transfer's overtures.
After Williams accepted a merger offer from Energy Transfer, the company was forced to pay a termination fee of more than $400 million to exit the limited partnership deal, Ryan said in the filing. The net result of the board's actions and the termination fee was a “drain of $428 million from the Company's coffers,” the plaintiff said.
A Williams representative didn't immediately respond to a request for comment.
The chancery court in June ruled that Energy Transfer could back away from its $33 billion agreement to buy the rival pipeline giant after failing to get lawyers to sign off on a tax opinion. The decision has been appealed to the Delaware Supreme Court (126 CARE, 6/30/16).
The aborted deal caused a shake-up of the Williams board. Six directors resigned in July after a failed bid to oust Chief Executive Officer Alan Armstrong (168 CARE, 8/30/16).
To contact the reporter on this story: Michael Greene in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
The plaintiff's complaint is available at http://src.bna.com/irv.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
Notify me when updates are available (No standing order will be created).
Put me on standing order
Notify me when new releases are available (no standing order will be created)