Battle For Southwest Gas Rages On
Oneok Inc. of Tulsa, OK, filed to hold Southern Union in
contempt for violating a federal preliminary injunction preventing
it from attempting to influence a shareholder vote on the merger of
Oneok and Southwest Gas Corp.
The focus of Oneok's contempt motion is a Southern Union
complaint filed in the U.S. District Court in Arizona on July 19
alleging Oneok, Southwest and others engaged in a criminal
conspiracy to defeat Southern Union's offer to acquire Southwest.
Oneok's motion said the central allegation of the Arizona
complaint is the wholly unsubstantiated, and untrue, allegation
that Oneok paid "thousands of dollars" to a Phoenix law firm to
retain a former executive secretary of the Arizona Corporation
Commission, to act as a secretly paid consultant to Oneok. It
further alleges Oneok was engaged in a criminal conspiracy with an
Arizona commissioner to commit extortion on Southwest's board of
On July 19, Oneok maintains, the Southern Union complaint was
distributed by a public relations firm to a news media
representative. On July 22, Oneok said, a letter was sent by a
Southern Union attorney to a public relations firm retained by
Southwest Gas, in an attempt to intimidate the firm with legal
threats concerning any release of information that might disparage
George Lindemann, the chairman of Southern Union, his family and
the Southern Union Co.
Oneok's contempt motion also notes that in May of 1999 Lindemann
and others with whom he is affiliated, acquired about 500,000
shares of Southwest stock. The shares were held until the record
date for the Oneok/Southwest merger. They then were voted against
the merger and sold.
Oneok also has filed an amendment to its original complaint
against Southern Union claiming abuse of process stating that
Southern Union's actions in filing the Arizona complaint were
conducted with malice and intent to oppress Oneok. As a result of
Southern Union's intentionally wrongful conduct, Southern Union is
liable for exemplary damages as a means of punishment and
deterrence, Oneok said.
Southern Union gained permission in May to join an existing lawsuit
against Southwest Gas in a last-ditch attempt to overtake Oneok as the
winner in the race to merge with Southwest (See Daily GPI May 5, 1999). The lawsuit accuses Southwest
Gas' board of directors of refusing to negotiate with Southern Union
in good faith. The original lawsuit was filed recently by Southwest
shareholders in San Diego County's Superior Court. Southern Union said
the original lawsuit accuses the Southwest board of seeking only to
protect itself during the merger negotiations.
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