(Reuters) – TC Energy Corp. and two former Columbia Pipeline Group Inc. executives must defend themselves in a lawsuit claiming that the $ 10 billion merger in 2016 replaced Columbia investors, a Delaware judge ruled Monday.
Principal Travis Laster of the Delaware Chancery Court refused to dismiss the lawsuit filed by former Columbia shareholders, led by the Mississippi Government Employees Retirement System.
Former Columbia CEO Robert Skaggs and Chief Financial Officer Stephen Smith were accused of creating a spin-off of Columbia from NiSource Inc., and then selling Columbia to TC Energy at a low price to obtain lucrative control swaps, so-called golden parachutes.
Judge Laster said it was reasonable to conclude that Skaggs and Mr. Smith violated his loyalty obligation to Columbia by agreeing to sell the company for $ 25.50 per share, below the $ 26 per share proposed by TC Energy, then known as TransCanada Corp.
Judge Laster also said that the Canadian company could be held liable for helping to counteract this violation.
Defendants may be liable for the difference between the selling price and what Columbia would have received if it had been held at a higher price.
A lawyer for TC Energy, Skaggs and Smith declined to comment.
The investor sentiment is the fourth over-the-counter sale of Columbia, which created one of North America's largest regulated natural gas transmission companies.
Two of these lawsuits were dismissed at an early stage. In the third, known as an evaluation case, Judge Laster found that the price of $ 25.50 per share was fair.
The defendants said the decision should have precluded the fourth trial, but Judge Laster said the legal issues and standards were different. Catalog