Oneok Inc. of Tulsa, OK, filed to hold Southern Union incontempt for violating a federal preliminary injunction preventingit from attempting to influence a shareholder vote on the merger ofOneok and Southwest Gas Corp.
The focus of Oneok’s contempt motion is a Southern Unioncomplaint filed in the U.S. District Court in Arizona on July 19alleging Oneok, Southwest and others engaged in a criminalconspiracy to defeat Southern Union’s offer to acquire Southwest.
Oneok’s motion said the central allegation of the Arizonacomplaint is the wholly unsubstantiated, and untrue, allegationthat Oneok paid “thousands of dollars” to a Phoenix law firm toretain a former executive secretary of the Arizona CorporationCommission, to act as a secretly paid consultant to Oneok. Itfurther alleges Oneok was engaged in a criminal conspiracy with anArizona commissioner to commit extortion on Southwest’s board ofdirectors.
On July 19, Oneok maintains, the Southern Union complaint wasdistributed by a public relations firm to a news mediarepresentative. On July 22, Oneok said, a letter was sent by aSouthern Union attorney to a public relations firm retained bySouthwest Gas, in an attempt to intimidate the firm with legalthreats concerning any release of information that might disparageGeorge Lindemann, the chairman of Southern Union, his family andthe Southern Union Co.
Oneok’s contempt motion also notes that in May of 1999 Lindemannand others with whom he is affiliated, acquired about 500,000shares of Southwest stock. The shares were held until the recorddate for the Oneok/Southwest merger. They then were voted againstthe merger and sold.
Oneok also has filed an amendment to its original complaintagainst Southern Union claiming abuse of process stating thatSouthern Union’s actions in filing the Arizona complaint wereconducted with malice and intent to oppress Oneok. As a result ofSouthern Union’s intentionally wrongful conduct, Southern Union isliable for exemplary damages as a means of punishment anddeterrence, Oneok said.
Southern Union gained permission in May to join an existing lawsuitagainst Southwest Gas in a last-ditch attempt to overtake Oneok as thewinner in the race to merge with Southwest (See Daily GPI May 5, 1999). The lawsuit accuses SouthwestGas’ board of directors of refusing to negotiate with Southern Unionin good faith. The original lawsuit was filed recently by Southwestshareholders in San Diego County’s Superior Court. Southern Union saidthe original lawsuit accuses the Southwest board of seeking only toprotect itself during the merger negotiations.
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