As co-lead counsel, Grant & Eisenhofer recovered $110 million for El Paso shareholders in conflicted merger litigation
Plaintiff(s):
Public pension fund serving as co-lead plaintiff on behalf of El Paso shareholders
Case type / claims:
Shareholder class action alleging breaches of fiduciary duty and aiding-and-abetting liability arising from the sale of El Paso Corp. to Kinder Morgan at a less-than-optimal price. Plaintiffs alleged that the merger was tainted by serious conflicts of interest, including Goldman Sachs’s dual role as El Paso’s financial advisor despite a $4 billion buy-side interest through its 19% ownership in Kinder Morgan, and the undisclosed personal interest of El Paso’s CEO and chairman in acquiring certain company assets via a management buyout.
Defendant(s):
El Paso Corporation Board of Directors, Goldman Sachs & Co. and Kinder Morgan, Inc.
Jurisdiction:
Delaware Court of Chancery
Year:
2012
Outcome:
- Grant & Eisenhofer secured a $110 million settlement against defendants following the Court’s finding of a “reasonable likelihood” of proving the merger was “tainted by disloyalty.”
- Court’s opinion identified “disturbing” behavior by deal participants, reinforcing scrutiny of financial advisor and management conflicts.
- Case remains a touchstone for fiduciary duty standards in conflicted M&A transactions.
