Battle For Southwest Gas Rages in Court
Oneok Inc. of Tulsa, OK, last week filed to hold Southern Union in contempt
for violating an 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 U.S. District Court in Arizona 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 untruth 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.
On July 19, Oneok maintains, the Southern Union complaint was distributed
by a public relations firm to a reporter. On July 22, Oneok said, a letter
was sent by a Southern Union attorney to the firm, retained by Southwest
Gas, in an attempt to intimidate it with legal threats concerning any release
of information that might disparage George Lindemann, the chairman of Southern
Union, his family and the company.
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 NGI May
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.
Joe Fisher, Houston
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