Delaware Chancery Court Reluctantly Declines to Stop Stockholder Vote

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The Delaware Chancery Court denied an application for preliminary injunction to stop a stockholder vote on a merger, in In re El Paso Corporation Shareholder Litigation, Consolidated CA No. 6949-CS.

El Paso, which has both a natural gas pipeline and a gas and oil exploration and production (E&P) business, announced its intention to spin off the E&P business. The announcement prompted Kinder Morgan, Inc., to make a nonpublic offer to El Paso to acquire El Paso in its entirety. El Paso understood that Kinder Morgan intended to keep only the pipeline business, but wanted to acquire El Paso before the spin-off, to discourage other bidders for the pipeline business.

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