The Southwest Gas merger soap opera took another turn recentlyas Oneok, the former merger partner of Southwest, announced it ispursuing lawsuits against the Arizona Corporation Commission (ACC),the state of Arizona and specific members of the ACC staff fortheir roles in interfering with the merger. Oneok said it iswilling 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, GeraldPorter, Oneok accused Kunasek and Porter of defaming the company,resulting in “Oneok’s having to defend, at great expense, claimsthat lack legal merit.” The collaboration of Chairman Kunasek andPorter with Southern Union “makes them, the State and the ACCliable for interference with the Oneok/Southwest Gas merger andOneok’s loss of the benefits of that transaction.”

The lawsuit alleges several acts of wrongdoing by Kunasek andPorter, including using the merger as a way to enact politicalrevenge against ACC Commissioner Jim Irvin, illegal contact withSouthern Union, negligence, breach of contract, abuse of processand aiding and abetting unfair competition.

Oneok broke off the merger with Southwest Gas last January,citing a stipulation in the merger agreement that said certainconditions hadn’t been met and did not look like they would be metin the pre-determined period of time. The consequences from thatdecision came fast and furious. Southern Union, which had beentrying to break the merger ever since Southwest spurned SouthernUnion in favor of Oneok, said it would continue to pursue itslawsuit against Southwest Gas. Southwest Gas proceeded to sue Oneokfor “unjustly attempting to cancel the merger agreement (see DailyGPI, Jan. 24, Jan. 25 and Jan. 26).

The Oneok and Southwest merger would have created the largeststand-alone natural gas distribution network in the U.S. Oneokcurrently serves customers in Oklahoma and Kansas, and Southwestserves 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 thenotice that “actual damages exceed many multiples of that sum.”

“In short,” Oneok said in the notice, “Southern Union usedinformation from Chairman Kunasek, Mr. Porter and the ACC mergerproceeding to pursue claims against Oneok that lacked legal meritas part of its continuing effort to disrupt the Oneok/Southwest Gasmerger; [Kunasek] and Mr. Porter used information from thelitigation between Oneok and Southern Union to pursue their plan ofdiscrediting Commissioner Irvin…and in the process, improperlyquestion Oneok’s fitness to acquire Southwest Gas…”

John Norris

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