Two weeks after Tulsa was stunned by the possible loss of Williams Cos. in its merger with Dallas-based Energy Transfer Equity, Williams has filed suit against ETE and its billionaire founder Kelcy Warren over a private stock offering revealed in early March.
Williams Cos. announced the filing of the lawsuit Wednesday, stating it had “commenced litigation” to unwind the private offering of Series A Convertible Preferred Units that ETE disclosed on March 9, 2016.
The suit against ETE is in the Delaware Court of Chancery while the suit against Warren was filed in Dallas County District Court for “tortious, or wrongful, interference with the merger agreement executed on Sept. 28, 2015 as a result of the private offering of Series A Convertible Preferred units.”
Williams said in the announcement its board of directors is “unanimously committed to enforcing its rights under the merger agreement—-and to delivering the benefits of the merger agreement to Williams’ stockholders.” It said ETE has no basis to avoid its obligations under the deal.
Williams said it reviewed ETE’s private offering of convertible preferred units and concluded it is a breach of the merger agreement.
“Among other things, the offering provides select ETE investors with preferential treatment on ETE distributions,” stated the announcement. But the company also said the board has not changed its recommendation “FOR” the merger agreement which is expected to close in the second quarter of the year.
