Jonathan Stempel
(Reuters) – The Delaware Supreme Court on Tuesday abandoned a judge’s order calling for Canadian pipeline operator TC Energy to pay $199.2 million in damages arising from the 2016 purchase of Columbia Pipeline Group’s $13 billion.
The lawsuit comes from Columbia shareholders who wanted TC Energy to be responsible for reducing the acquisition price from $26 to $25.50 per share, with former Columbia CEO Robert Scuggs and Chief Financial Officer Stephen Smith collecting large control committee payments known as Golden Parachutes.
In May 2024, Delaware Chance Court Deputy Prime Minister Travis Ruster was worth $199.2 million to Columbia shareholders at 50 cents per share.
However, the Delaware Supreme Court cited its December 2024 ruling in another case that an acquirer, such as TC Energy, could be liable to assist a seller in breach of his fiduciary duty if he knows the violation and is wrong in his actions.
“For understandable reasons, the standard did not apply here,” and despite the “Mountain Trial Record,” the standard was not met, Judge Gary Trainer wrote in a 100-page decision of a panel of five judges.
“The Chancery Court did not discover that TransCanada has actual knowledge of Skuggs and Smith’s breach of loyalty, or that the Columbia Commission failed to maintain meaningful oversight of the sales process,” Trainer wrote.
“Due to lack of actual knowledge about sell-side violations, Transcanada was unable to intentionally participate in them.”
Columbia’s shareholders’ lawyers did not immediately respond to requests for comment after opening hours. TC Energy and its lawyers did not immediately respond to similar requests.
Skaggs and Smith agreed to pay $79 million to settle with Colombian shareholders before the trial.
The suit was filed by the Delaware Supreme Court, No. Located at Re Columbia Pipeline Group Inc Merger Litigation, 2024, 281, 2024.
(Reporting by Jonathan Stempel of New York, Editing by Lisa Shumaker)
