Alyssa Gerace Frank, left, and Michael P. Maxwell, right, of Potter Anderson & Corroon. Courtesy photos
‘Twas the week before Christmas, and the Delaware Supreme Court delivered an early present to Loews Corp.: a resounding reversal of a 2021 Delaware Court of Chancery ruling excoriating the entire process through which Boardwalk Pipeline Partners’ general partner took the company private and awarding the plaintiff investors with nearly $700 million in damages, plus interest. The decision, Boardwalk Pipeline Partners v. Bandera Master Fund, 2022 WL 17750348 (Del. Dec. 19, 2022), can be accessed here.
Background
The Supreme Court’s decision reversed the Chancery Court’s November 2021 decision in favor of plaintiff investors of Boardwalk who had successfully challenged Boardwalk’s 2018 exercise of a contractual call right to purchase minority units in the publicly traded master limited partnership (MLP). The call right was exercised in response to pending regulatory action by the Federal Energy Regulatory Commission (FERC). In order to exercise the call right, Boardwalk’s partnership agreement required that its general partner (the general partner) obtain a legal opinion acceptable to the general partner to the effect that the potential impact of the FERC action on Boardwalk’s oil and gas pipeline business was sufficient to trigger the general partner’s right to cause Boardwalk to purchase minority limited partners’ equity interests in Boardwalk (the primary opinion).
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