TransAmerican Settles With El Paso, Coastal
"Not with a bang, but a whimper" the $7.5 billion lawsuit
filed by TransAmerican Natural Gas against merging giants Coastal Corp.
and El Paso Natural Gas, slid to a quiet grave under a sealed settlement
agreement last week.
The trial of the two companies and Oscar Wyatt Jr., founder of Coastal,
and El Paso Energy CEO William Wise lasted just one week before the parties
came to an agreement. Terms of that agreement were not disclosed, but an
El Paso spokeswoman said it would have "no significant impact"
on the finances of either of the companies. "We're delighted to have
this behind us and over and done with, forever. We thought it had been
settled a long time ago."
TransAmerican and Jack Stanley, its chairman and founder, had accused
the two companies and their executives of conspiring to complete the financial
destruction of TransAmerican, which was attempting to reorganize itself
out of bankruptcy at the time. (See NGI, May
8) The alleged conspiracy occurred in 1988 and the case was filed in
1993. Interestingly, the trial started the same week El Paso and Coastal
shareholders were to vote on their $16 billion merger. Shareholders overwhelmingly
approved the merger, and the lawsuit was settled. (See NGI, May
The suit alleged the defendants conspired to undermine TransAmerican's
ability to continue prosecuting and collecting a $500 million take or pay
judgment it had won against El Paso. El Paso settled that judgment in 1989
for $300 million. Stanley had been a longtime rival of Wyatt, going back
to the early days of oil and gas development in Texas.
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