Oil & Gas - Energy - Commodities - Resources (OILBRENT)

[eFinanceMarkets]

$ETE Energy Transfer's (ETE, ETP) Kelcy Warren today told a judge that he did not unfairly benefit from a 2016 private issuance of units in one of the company’s partnerships that was tied to the failed merger with Williams Cos.

Warren’s lawyers said in court filings that the deal was designed to raise cash for Energy Transfer’s $38B buyout of Williams, but Warren got 57% of the new units, according to SEC filings, and disgruntled partnership participants said the deal created a “superpriority” class of unitholders whose cash distributions would be protected even if the company cut payouts to other owners.

Unhappy unitholders contend the terms of the issuance guaranteed Warren more than $200M in payments at the expense of Williams’ shareholders and other Energy Transfer investors.

The merger failed but lawsuits over the private-unit issuance survived, and the judge will be asked to decide if the issuance violated the partnership agreement and whether the deal was flawed by unaddressed conflicts of interest.