Oneok Sues AZ over ACC Staff Behavior
The Southwest Gas merger soap opera took another turn recently
as Oneok, the former merger partner of Southwest, announced it is
pursuing lawsuits against the Arizona Corporation Commission (ACC),
the state of Arizona and specific members of the ACC staff for
their roles in interfering with the merger. Oneok said it is
willing to settle its claims for $85 million.
In a notice sent to the Attorney General of Arizona, the ACC,
the Commission Chairman Carl Kunasek and one of his aides, Gerald
Porter, Oneok accused Kunasek and Porter of defaming the company,
resulting in "Oneok's having to defend, at great expense, claims
that lack legal merit." The collaboration of Chairman Kunasek and
Porter with Southern Union "makes them, the State and the ACC
liable for interference with the Oneok/Southwest Gas merger and
Oneok's loss of the benefits of that transaction."
The lawsuit alleges several acts of wrongdoing by Kunasek and
Porter, including using the merger as a way to enact political
revenge against ACC Commissioner Jim Irvin, illegal contact with
Southern Union, negligence, breach of contract, abuse of process
and aiding and abetting unfair competition.
Oneok broke off the merger with Southwest Gas last January,
citing a stipulation in the merger agreement that said certain
conditions hadn't been met and did not look like they would be met
in the pre-determined period of time. The consequences from that
decision came fast and furious. Southern Union, which had been
trying to break the merger ever since Southwest spurned Southern
Union in favor of Oneok, said it would continue to pursue its
lawsuit against Southwest Gas. Southwest Gas proceeded to sue Oneok
for "unjustly attempting to cancel the merger agreement (see Daily
GPI, Jan. 24, Jan. 25 and Jan. 26).
The Oneok and Southwest merger would have created the largest
stand-alone natural gas distribution network in the U.S. Oneok
currently serves customers in Oklahoma and Kansas, and Southwest
serves Arizona and parts of California and Nevada.
And now the Tulsa, OK-based Oneok has joined the suing circus.
While the company is only seeking $85 million, it said in the
notice that "actual damages exceed many multiples of that sum."
"In short," Oneok said in the notice, "Southern Union used
information from Chairman Kunasek, Mr. Porter and the ACC merger
proceeding to pursue claims against Oneok that lacked legal merit
as part of its continuing effort to disrupt the Oneok/Southwest Gas
merger; [Kunasek] and Mr. Porter used information from the
litigation between Oneok and Southern Union to pursue their plan of
discrediting Commissioner Irvin...and in the process, improperly
question Oneok's fitness to acquire Southwest Gas..."
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