Vice Chancellor Travis Laster of the Delaware Chancery Court refused to dismiss the lawsuit by former Columbia shareholders, led by the Public Employees’ Retirement System of Mississippi.
Former Columbia Chief Executive Robert Skaggs and Chief Financial Officer Stephen Smith were accused of engineering a spin-off of Columbia from NiSource Inc, and then selling Columbia to TC Energy at a lowball price to obtain lucrative change-of-control payments, known as golden parachutes.
Laster said it was reasonable to infer that Skaggs and Smith breached their duty of loyalty to Columbia by agreeing to sell their company for $25.50 per share, below the $26 per share proposed by TC Energy, then known as TransCanada Corp.
Laster also said the Canadian company could be liable for aiding and abetting that breach.
The defendants could face damages for the difference between the sale price and what Columbia might have fetched had it held out for a higher price.
A lawyer for TC Energy, Skaggs and Smith declined to comment.
The investor lawsuit is the fourth over the sale of Columbia, which created one of North America’s largest regulated natural gas transmission businesses.
Two of those lawsuits were dismissed in the early stages. In the third, known as an appraisal case, Laster found that the $25.50 per share takeover price was fair.
The defendants said that decision should have precluded the fourth lawsuit, but Laster said the legal questions and standards were different. 29dk2902l