July 3, 2023
One of the Largest Shareholder Verdicts
in Delaware History
NEW YORK, NY (July 3, 2023) – Bernstein Litowitz Berger & Grossmann “BLB&G” announced today that in a 196-page ruling, the Delaware Court of Chancery has held that energy giant TC Energy Corp. “TransCanada”—which acquired Columbia Pipeline Group, Inc. “Columbia” in 2016—is liable to former Columbia shareholders for aiding and abetting breaches of fiduciary duty by former Columbia top executives in connection with the deal. 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 hard-fought 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 well-reasoned 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,” said BLB&G partner Jeroen van Kwawegen, who led the trial team. “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.”
“I am proud to be a member of the team that has achieved this exceptional result,” said BLB&G partner Greg Varallo. “This decision once again demonstrates the commitment of BLB&G to represent its clients vigorously all the way through trial when necessary, which is crucial to protect stockholder interests from corporate self-dealing, issuance of misleading information, and those who knowingly participate in such business torts.”
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.
The Court Opinion can be found under this page's Related Documents section.