US Williams files another suit against Energy Transfer

Christie Moffat

16-May-2016

source F1 Online REX ShutterstockHOUSTON (ICIS)–US-based The Williams Companies has filed another lawsuit against natural gas storage and transportation company Energy Transfer Equity (ETE), seeking to prevent it from terminating or otherwise avoiding its obligations under the merger agreement between the companies, Williams announced late on Friday.

The lawsuit, filed in the Delaware Court of Chancery, asks the court to prohibit Energy Transfer Equity from relying on any failure to close the transaction by 28 June 2016, or any failure to obtain tax counsel from law firm Latham & Watkins, as a basis to avoid fulfilling what Williams called ETE’s obligation to complete the merger.

Williams has alleged that ETE has breached the merger agreement through a pattern of delay and obstruction, designed to allow the company to avoid its contractual commitments.

The merger agreement was first announced in September last year, and Williams said it was still committed to completing the deal.

In a statement released on Sunday, ETE CEO Kelcy Warren said it was “disappointed” that Williams had filed the lawsuit.

“As we have previously informed Williams and as described in the Form S-4, we believe that even if the Williams stockholders approve the merger, the merger will still not be able to close due to a failure of a material closing condition given the substantial risk that Latham & Watkins LLP will not be able to deliver the 721(a) opinion,” Warren said. The Form S-4 is a type of document that ETE filed with the Securities and Exchange Commission (SEC).

“Accordingly, we believe Williams’ latest lawsuit is an attempt to gain undue leverage in and undermine future discussions regarding the pending merger and will only result in further delay,” Warren alleged.

Warren added that ETE had made “multiple attempts” to engage with Williams in a “constructive dialogue” to find a path forward, but Williams allegedly had taken steps to limit ETE’s communications with members of the Williams board, and did not respond to ETE’s most recent request before filing the lawsuit.

Earlier this year, Williams commenced separate litigation against ETE and its CEO Kelcy Warren, in response to a private offering of convertible preferred units that ETE disclosed on 9 March.

The lawsuit announced on Friday seeks to unwind the private offering, Williams said.

The litigation against Warren was filed in the District Court of Dallas county, Texas, and is for allegedly wrongful interference with the merger agreement, as a result of the private offering.

(The photos shows a gavel in a courtroom. Source: F1 Online/REX/Shutterstock)

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