From our private database of 14,100+ case briefs...
In re El Paso Corp. Shareholder Litigation
Delaware Court of Chancery
41 A.3d 432 (2012)
Doug Foshee, chief executive officer (CEO) of El Paso Corporation (El Paso), was solely responsible for negotiating the sale of El Paso to Kinder Morgan, Inc. (Kinder). Foshee did not disclose to the El Paso board that he had an interest in purchasing a portion of the El Paso business back from Kinder. El Paso used Goldman, Sachs & Co. (Goldman) as its financial advisor for the transaction. Goldman owned 19 percent ($4 billion) of Kinder stock and had two principals on the Kinder board, who owed fiduciary duties to Kinder. The lead Goldman banker advising El Paso personally owned $340,000 worth of Kinder stock. Although Morgan Stanley, an investment bank, was brought in to wall off Goldman from the transaction in an effort to avoid Goldman’s conflicts, Goldman continued to advise El Paso on the merger. Goldman also persuaded El Paso to agree to pay Morgan Stanley’s $35 million advising fee only if El Paso adopted the strategy for selling to Kinder that Goldman was proposing. El Paso’s board did not seek any other bidders or attempt to make Kinder bid publicly. The board also allowed Kinder to back out of an agreement to pay a certain price and eventually agreed to a deal at a lower price. Under the merger agreement entered into by the parties, El Paso could not solicit higher bids and was required to pay a $650 million termination fee to Kinder if El Paso accepted a better proposal from another party. Some of El Paso’s stockholders (plaintiffs) sought a preliminary injunction to enjoin a stockholder vote on the merger.
Rule of Law
Holding and Reasoning (Strine, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 218,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 14,100 briefs, keyed to 189 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.