October 12, 2023

Disclosure Schedules: Del. Supreme Court Affirms Chancery Ruling in Williams Cos. Case

Earlier this week, in The Williams Companies v. Energy Transfer Equity, (Del.; 10/23), the Delaware Supreme Court affirmed a prior Chancery Court decision finding that ETE had breached its merger agreement with Williams and ordering it to pay a $410 million breakup fee.  In doing so, it also affirmed the Chancery Court’s rejection of ETE’s argument that a carve-out contained in the merger agreement’s disclosure schedules permitting it to engage in a $1 billion securities offering applied to any potential violations of the agreement’s ordinary course and interim operating covenants arising out of the offering. The Court also affirmed the Chancery Court’s rejection of ETE’s claims that Williams breached the merger agreement.

Like the Chancery Court’s decision, this decision, which brought this long-running litigation to an end, is a must-read for lawyers involved in drafting and negotiating disclosure schedules and the related contract terms.

– Meredith Ervine