7/3/2023
(P&GJ) — Bernstein Litowitz Berger & Grossmann has announced that the Delaware Court of Chancery, in a 196-page ruling, held TC Energy Corp. liable for aiding and abetting breaches of fiduciary duty by former top executives of Columbia Pipeline Group Inc. This ruling comes after TC Energy, formerly known as TransCanada, acquired Columbia in 2016, making them accountable to former Columbia shareholders.
Former Columbia shareholders were awarded economic damages of $1.00 per share and disclosure damages of $.50 per share. The awards overlap and the specific amount of the final judgment is still subject to further proceedings. This post-trial judgment follows a previous $79 million settlement with now-retired Columbia executives. The award is before application of statutory interest and applies to approximately 400 million Columbia shares that were outstanding at the time of the acquisition.
This is one of the largest shareholder verdicts in Delaware history. It is the result of years of litigation, including a trial, and the second judgment holding acquirers accountable for aiding and abetting breaches of fiduciary duties by corporate insiders in connection with a corporate sale process (the first having been won by BLB&G earlier this year).
The decision finds that an acquiring party who repeatedly exploited breaches of duty by target officers, including opportunistically reneging on a deal at a higher price, can be held liable for aiding and abetting the selling parties’ breaches of fiduciary duty.
“This is an excellent result for Columbia investors,” BLB&G partner Jeroen van Kwawegen said. “This significant decision reaffirms for potential acquirers and their advisors in the M&A market that they cannot knowingly participate in breaches of fiduciary duty by senior executives of target companies; this remains good law and good policy benefiting stockholders of all publicly traded companies and the broader investment community.”
Lead plaintiffs are the Police & Fire Retirement System of the City of Detroit and the Public Employees’ Retirement System of Mississippi.
Investors are represented by a team of attorneys, financial analysts, and private investigators at Bernstein Litowitz Berger & Grossmann LLP, led by partners Jeroen van Kwawegen, Greg Varallo, Lauren Ormsbee, senior counsel Tom James, and associate Meg Sanborn-Lowing. Former BLB&G partner C.J. Orrico also worked extensively on the case while he was at the firm.
The law firm of Labaton Sucharow LLP serves as co-lead counsel. The law firm of Ashby & Geddes P.A. acts as additional counsel.
