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Loews ordered to pay $690M to pipeline investors


(Reuters) — A Delaware judge Friday ordered Loews Corp. to pay $690 million to former Boardwalk Pipeline Partners LP investors who claimed they were shortchanged in a July 2018 buyout.

Loews said it planned to appeal the decision by Vice Chancellor Travis Laster of the Delaware Chancery Court, who ruled in a class action challenging the $1.5 billion transaction.

In a 194-page decision, Judge Laster said New York-based Loews, which controlled Boardwalk's general partner, breached the natural gas pipeline company's partnership agreement in exercising its right to buy out the limited partners.

Judge Laster said the buyout undervalued the limited partners' stake by 31%, and that they deserved $17.60 per unit instead of the $12.06 they were awarded.

He said Loews obtained the bargain price after its lawyers "worked hard" to obtain a favorable legal opinion concerning Houston-based Boardwalk's tax and regulatory status, including rulemaking by the Federal Energy Regulatory Commission.

“The opinion was a contrived effort to reach the result that the general partner wanted,” Judge Laster wrote. “(It) did not reflect a good faith effort to discern the facts and apply professional judgment.”

Loews' other businesses include insurer CNA, Diamond Offshore Drilling and Loews hotels. It took Boardwalk public in 2005.

Loews CEO James Tisch said in a statement that the company believed Laster “misinterpreted both the factual underpinnings of the case as well as the applicable law.”