Delaware Supreme Court Overturns $199M Damages Against TC Energy in Columbia Pipeline Deal

Delaware’s Supreme Court has overturned a $199.2 million damages award against Canadian pipeline giant TC Energy (NYSE: TRP), ruling it wasn’t liable for alleged misconduct in its $13 billion acquisition of Columbia Pipeline Group in 2016.

The case, brought by Columbia shareholders, claimed TC Energy enabled a reduced takeover price—from $26 to $25.50 per share—to allow Columbia’s former CEO Robert Skaggs and CFO Stephen Smith to receive lucrative “golden parachute” payouts. In May 2024, Delaware Chancery Court Vice Chancellor Travis Laster sided with shareholders, awarding them 50 cents per share, totaling nearly $200 million.

However, the Delaware Supreme Court’s unanimous decision, written by Justice Gary Traynor, stated that TC Energy could not be held liable without actual knowledge of the seller’s breach of fiduciary duty. Referencing its own precedent from a December 2024 ruling, the court said an acquirer must knowingly aid in such a breach to be held accountable.

Traynor noted the Chancery Court did not prove TC Energy had “actual knowledge” of Skaggs and Smith’s disloyal conduct or that Columbia’s board failed to properly oversee the sale. Without this, the court found TC Energy could not have knowingly participated in the wrongdoing.

Before trial, Skaggs and Smith reached a separate $79 million settlement with Columbia shareholders.

The overturned case, In re Columbia Pipeline Group Inc Merger Litigation, highlights evolving standards for proving liability in M&A-related fiduciary breaches. TC Energy and lawyers involved have not commented on the ruling.

The Supreme Court’s decision underscores the high bar required to prove aiding and abetting claims in corporate merger disputes, especially in Delaware, the leading jurisdiction for U.S. corporate law.