Financial Advisor’s ‘Real Client Was the Deal,’ Says Chancery

Business Valuation UpdateVol. 21 No. 7
Legal and Court Case Update
July 2015

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4922 Natural Gas Transmission
486210 Pipeline Transportation of Natural Gas
economic damages & lost profits
damages, expert testimony, weighted average cost of capital (WACC), cash flow, discounted cash flow (DCF), multiple, overpayment, terminal value, fairness opinion, earnings before interest, taxes, depreciation, amortization (EBITDA), precedent transactions analysis
In re El Paso Pipeline Partners, L.P. Derivative Litig.
2015 Del. Ch. LEXIS 116
April 20, 2015
US
State Court
Delaware
Court of Chancery
Dr. Zachary Nye (plaintiffs); Tudor, Pickering, Holt & Co. (fairness opinions/parent)
Laster

Summary

Chancery says “dropdown” of assets from parent to master limited partnership resulted in overpayment; transaction was enabled by financial advisor that took orders from parent regardless of whether opinion “made sense as a matter of valuation theory.”

See Also

In re El Paso Pipeline Partners, L.P. Derivative Litig.

Full Text of Court Cases
April 20, 2015

Chancery says “dropdown” of assets from parent to master limited partnership resulted in overpayment; transaction was enabled by financial advisor that took orders from parent regardless of whether opinion “made sense as a matter of valuation theory.”

This article also appears in:
Business Valuation UpdateVol. 21 No. 7
The Comprehensive Guide to Economic Damages, Seventh Edition