Author(s): John Coates, Clayton Rose, David Lane  
Product Number:  HLS 13-08
Publication Date:  July 25, 2012
Length:  6 pages
Cost per Copy:  $10

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Abstract
In 2011, El Paso—publicly traded oil and gas company—agreed to be bought out by Kinder Morgan, a leading owner/operator of US oil and gas pipelines. El Paso was advised by Goldman Sachs, which also owned 19% of Kinder Morgan. Despite taking steps to try to address the conflict of interest it faced, Goldman Sachs (and the board of El Paso) were strongly criticized by the Delaware Chancellor in an opinion that reverberated on Wall Street and beyond.

(A separate set of cases, In a Pickle: Barclays Capital and the Sale of Del Monte Foods and Barclays Capital and the Sale of Del Monte Foods, explore closely related issues arising in the context of the 2010 buyout of Del Monte, which was advised by Barclays Capital.)

Learning Objectives
To explore the consequences of legal review of public company buyouts, the legal duties of investment banks to their clients, and the potential conflicts of interest faced by boards, managers, and investment banks in such transactions, and to understand how shareholder litigation can affect the reputations of non-party professionals as much or even more than those of the board members being sued.

Subjects Covered
Mergers & Acquisitions
Shareholder Lawsuits
Conflicts of Interest
Corporate and Securities Law
Ethics

Setting
Geographic: United States
Industry: Natural Resources
Event Year Begin: 2011

See also:
Barclays Capital and the Sale of Del Monte Foods
In a Pickle: Barclays Capital and the Sale of Del Monte Foods