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Energy Transfer files lawsuit to ‘immediately terminate’ merger with Williams
HOUSTON, May 26, 2016 (PCW) -- Energy Transfer on Thursday said it had filed a lawsuit to “immediately terminate” its merger agreement with Williams, claiming the latter firm had breached the terms of the deal.
The suit was filed in the Delaware Court of Chancery on May 13, Energy Transfer (ETE) said.
The counterclaim states that Williams breached the terms of the merger agreement by allowing its board of directors to modify or qualify its approval and recommendation of the merger, refusing to cooperate with ETE’s efforts to finance the merger, failing to use reasonable best efforts to complete the merger and suing ETE’s chairman Kelcy Warren.
Should ETE terminate the merger agreement due to a modification or qualification of the Williams board of directors’ recommendation of the merger, Williams would owe ETE a termination fee of $1.48 billion, the suit claims.
Additionally, should ETE’s lawyers Latham & Watkins be unable to deliver a tax opinion by June 28, ETE should be allowed to terminate the agreement without penalty, the suit states.
Latham had previously advised ETE it would be unable to deliver this tax opinion by the June deadline.
The Dallas-based Energy Transfer also said Thursday that the District Court of Dallas County, Texas, has dismissed the lawsuit brought by Williams against Warren.
Last September, ETE said it would acquire Williams for $37.7 billion.
Since then, the proposed merger has been wracked by lawsuits amid shareholder grievances that essentially contend that some of the synergies and financial benefits from a combined company had been overstated. -- Samantha Hartke