| WILMINGTON, Del.
WILMINGTON, Del. Dec 20 The Delaware Supreme
Court dismissed on Tuesday a $171 million investor lawsuit
against Kinder Morgan Inc stemming from the pipeline
operator's acquisition of El Paso Corp and its affiliates.
The lower Court of Chancery ruled last year that Kinder
Morgan was on the hook for the bulk of the damages owed to
investors in a master limited partnership, or MLP, which was
shortchanged in deals with its own parent, El Paso Corp.
Kinder Morgan had argued it was being held liable over deals
it was not involved in, except that it ended up acquiring both
the buyer and seller in the transactions at the center of the
The Delaware Supreme Court agreed, and said if it allowed
the damage award to stand "useful transactions would be deterred
or priced at a lower value because third-party acquirers would
find themselves having bought into litigation morasses."
Jeffrey Squire, an attorney who represented the plaintiff,
declined to comment. A Kinder Morgan spokesman was not
immediately available for comment.
The dismissed lawsuit began with deals in 2011 in which El
Paso Pipeline Partners, an MLP, bought subsidiaries of its
parent company, El Paso Corp.
Peter Brinckerhoff, an investor in the MLP, sued in 2011 and
argued the MLP was coerced into overpaying.
Vice Chancellor Travis Laster found that the committee that
governed the MLP and the committee's advisers acted in bad faith
in approving the deal.
Brinckerhoff's lawsuit was a derivative action, meaning he
brought it not on behalf of himself and other MLP investors, but
on behalf of the MLP itself.
Kinder Morgan bought the MLP during the litigation, and the
pipeline operator reasoned that in doing so it also acquired the
litigation, rendering the case moot.
The Supreme Court said Brinckerhoff could have challenged
the price Kinder Morgan paid for the MLP to better reflect the
value of his lawsuit, but noted he chose not to.
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Lisa