Judy Mesirov v. Enbridge Energy Company, Inc. ( 2018 )

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
JUDY MESIROV, derivatively and on :
behalf of all others similarly situated,
:
:
Plaintiff, :
:
v. : C.A. No. 11314-VCS
:
ENBRIDGE ENERGY COMPANY, :
INC., ENBRIDGE, INC., ENBRIDGE :
ENERGY MANAGEMENT, L.L.C., :
JEFFREY A. CONNELLY, :
REBECCA B. ROBERTS, DAN A. :
WESTBROOK, J. RICHARD BIRD, :
J. HERBERT ENGLAND, :
C. GREGORY HARPER, D. GUY :
JARVIS, MARK A. MAKI, JOHN K. :
WHELEN, ENBRIDGE PIPELINES :
(ALBERTA CLIPPER) L.L.C., :
ENBRIDGE ENERGY, LIMITED :
PARTNERSHIP, and PIPER JAFFRAY :
& CO. (as successor to SIMMONS & :
COMPANY INTERNATIONAL), :
:
Defendants. :
MEMORANDUM OPINION
Date Submitted: May 30, 2018
Date Decided: August 29, 2018
Joel Friedlander, Esquire, Jeffrey M. Gorris, Esquire and Christopher P. Quinn,
Esquire of Friedlander & Gorris, P.A., Wilmington, Delaware; Jessica Zeldin,
Esquire of Rosenthal, Monhait & Goddess, P.A., Wilmington, Delaware; and
Lawrence P. Eagel, Esquire, Jeffrey H. Squire, Esquire and David J. Stone, Esquire
of Bragar Eagel & Squire, PC, New York, New York, Attorneys for Plaintiff.
Thomas W. Briggs, Jr., Esquire and Richard Li, Esquire of Morris, Nichols, Arsht
& Tunnell LLP, Wilmington, Delaware; and Kevin C. Logue, Esquire, Kevin P.
Broughel, Esquire, J. Jeanette Kang, Esquire and Molly L. Leiwant, Esquire of Paul
Hastings LLP, New York, New York, Attorneys for Defendants Enbridge Energy
Company, Inc., Enbridge Energy Management, L.L.C., Jeffrey A. Connelly,
Rebecca B. Roberts, Dan A. Westbrook, Enbridge Energy, Limited Partnership, and
Nominal Defendant Enbridge Energy Partners, L.P.
Raymond J. DiCamillo, Esquire, Sarah A. Galetta, Esquire and Lisa A. Schmidt,
Esquire of Richards, Layton & Finger, P.A., Wilmington, Delaware; Michael H.
Steinberg, Esquire, Lauren M. Cruz, Esquire and Zachary A. Sarnoff, Esquire of
Sullivan & Cromwell LLP, Los Angeles, California; and Penny Shane, Esquire and
Yuliya Neverova, Esquire of Sullivan & Cromwell LLP, New York, New York,
Attorneys for Defendants Enbridge, Inc., J. Richard Bird, J. Herbert England,
C. Gregory Harper, D. Guy Jarvis, Mark A. Maki, John K. Whelen, and Enbridge
Pipelines (Alberta Clipper) L.L.C.
T. Brad Davey, Esquire, Matthew F. Davis, Esquire and Jacqueline A. Rogers,
Esquire of Potter, Anderson & Corroon LLP, Wilmington, Delaware and Abby F.
Rudzin, Esquire of O’Melveny & Myers LLP, New York, New York, Attorneys for
Defendant Piper Jaffray & Co. (as successor to Simmons & Company International).
SLIGHTS, Vice Chancellor
“It’s déjà vu all over again.” “Thank you sir, may I have another?” Given the
procedural history of this three-year-old case, it is difficult to say who as between
Yogi Berra or Kevin Bacon best captures the redundancy of the latest round of
pleadings-stage dispositive motions that I endeavor to decide, again, in the following
pages. What is not difficult to discern, however, is that I have seen many of the
arguments presented in the motions sub judice before. That much was clear from
the first pages of the Enbridge defendants’ opening brief. In ruling on the first
motion to dismiss, I followed the defendants’ flag and dismissed the then-operative
complaint for failure to state legally viable claims. Our Supreme Court reversed and
remanded with clear instructions. Notwithstanding these clear instructions,
defendants bring motions to dismiss the current version of the complaint on many of
the same grounds our Supreme Court has already rejected. Those grounds will find
no revival here.
The case arises from a related-party transaction where a master limited
partnership, Enbridge Energy Partners, L.P. (“EEP” or the “Partnership”),
repurchased a substantial asset from its general partner, Enbridge Energy Company,
Inc. (“EEP GP”), for $1.0 billion (the “Transaction).1 EEP had sold the same asset
to the controlling parent of EEP GP at a substantially lower price approximately six
1
Verified Third Am. Compl. (“TAC”) 1, ¶¶ 1, 3.
1
years before the Transaction. That deal spawned its own litigation, and that litigation
produced certain rulings from this court and the Delaware Supreme Court that are
directly relevant here.
Drawing in part upon rulings in the earlier litigation, I dismissed the first class
and derivative complaint brought by an EEP unitholder on the ground that it failed
to state claims for breach of fiduciary duty, breach of EEP’s limited partnership
agreement (the “LPA”) or breach of the implied covenant of good faith and fair
dealing.2 As noted, in an opinion that provided needed clarity in the alternative
entity space, the Supreme Court reversed, provided certain definitive constructions
of the LPA, defined the boundaries of the contractual good faith standard imposed
by that contract and remanded for further proceedings consistent with its guidance.3
Since then, I have granted leave for a new party to be substituted as lead class
plaintiff and for the filing of further amendments to the complaint.
Defendants have returned to the well with another motion to dismiss the now-
operative complaint for failure to state viable claims under Court of Chancery
Rule 12(b)(6) and for failure to comply with Court of Chancery Rule 23.1. For
reasons explained below, I conclude that, with few exceptions, Defendants’
2
Brinckerhoff v. Enbridge Energy Co., Inc., 2016 WL 1757283, at *2 (Del. Ch. Apr. 29,
2016) (“Brinckerhoff IV”), rev’d in part, 159 A.3d 242 (Del. 2017) (“Brinckerhoff V”).
3
Brinckerhoff V, 159 A.3d at 247, 262.
2
arguments in support of dismissal have already been addressed, and rejected, by the
Supreme Court. Those rulings, relating to the scope of EEP GP’s potential liability
to EEP under the LPA, cannot and will not be revisited here.
Unfortunately, the dismissal in this Court and reversal by the Supreme Court
appear to have caused confusion with respect to the viability of claims against
defined “Affiliates” of EEP GP for breach of the LPA.4 This confusion apparently
prompted Plaintiff to abandon those claims in the TAC and to replace them with
certain “secondary liability” claims against those same “Affiliates.”5 Upon further
review of the LPA, I am satisfied that I incorrectly dismissed claims against the
Affiliates for breach of the LPA in Brinckerhoff IV.6 As best I can tell, the Supreme
Court recognized that error, at least implicitly, in Brinckerhoff V.7 With that said,
Plaintiff’s secondary liability claims against the Affiliates must fail because those
parties cannot aid and abet a breach of, or tortiously interfere with, a contract under
4
See LPA, art. II.
5
See Brinckerhoff V, 159 A.3d at 262 (describing aiding and abetting, tortious interference
and breach of residual fiduciary duty claims as “secondary liability” claims). Compare
First Compl. (D.I. 1) at ¶¶ 125–33 (alleging breach of LPA claims against certain EEP GP
Affiliates) with TAC ¶¶ 163–86 (dropping breach of LPA claim against Affiliates and
adding aiding and abetting breach of contractual fiduciary duty and tortious interference
with contract claims).
6
Brinckerhoff IV, 2016 WL 1757283, at *12 n.77.
7
Brinckerhoff V, 159 A.3d at 254.
3
which they themselves owe duties. Nor do they owe residual fiduciary duties beyond
the contractual fiduciary duties set forth in the LPA. While these secondary liability
claims will be dismissed, Plaintiff will be given leave to reinstate its breach of the
LPA claim against the Affiliates.
I. FACTUAL BACKGROUND
I draw the facts8 from the allegations in the TAC, documents incorporated by
reference or integral to that pleading and judicially noticeable facts.9 For purposes
of this motion to dismiss, I accept as true the TAC’s well-pled factual allegations
and draw all reasonable inferences in Plaintiff’s favor.10
8
A more detailed recitation of the facts can be found in any of the several prior decisions
of this Court and the Supreme Court concerning the earlier litigation between these parties
and the instant dispute. See Brinckerhoff v. Enbridge Energy Co., Inc., 2011 WL 4599654(Del. Ch. Sept. 30, 2011) (“Brinckerhoff I”); Brinckerhoff v. Enbridge Energy Co., Inc.,
No. 574, 2011 (Del. 2012) (Remand Order); Brinckerhoff v. Enbridge Energy Co., Inc.,
2012 WL 1931242 (Del. Ch. May 25, 2012) (“Brinckerhoff II”), aff’d, 67 A.3d 369(Del. 2013) (“Brinckerhoff III”), abrogated by, Brinckerhoff V, 159 A.3d 242;
Brinckerhoff IV, 2016 WL 1757283, rev’d in part, Brinckerhoff V, 159 A.3d 242.
9
Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del. 2004) (noting that on
a motion to dismiss, the Court may consider documents that are “incorporated by
reference” or “integral” to the complaint).
10
In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 169 (Del. 2006).
4
A. The Parties
Plaintiff, Peter Brinckerhoff Rev. Tr. U.A. DTD 10/17/97, has been an owner
of EEP Class A common limited partnership units at all relevant times. 11 The TAC
filed on his behalf purports to assert both direct and derivative claims.
Nominal defendant, EEP, is a publicly traded Delaware master limited
partnership. Formed in 1991, EEP’s purpose is to own and operate the United States
portion of a crude oil and liquid petroleum pipeline system extending from the tar
sands oil production fields in Western Canada, through the Great Lakes region of
the United States and into eastern Canada.12
Plaintiff has named multiple Enbridge entities as defendants. Defendant,
EEP GP, is a Delaware corporation and EEP’s general partner.13 Defendant,
Enbridge Energy Management, L.L.C. (“Enbridge Management”), is a publicly
traded Delaware limited liability company that manages the business and affairs of
11
As stated, after Defendants’ motions to dismiss the TAC were submitted for decision,
the TAC was amended to substitute a different lead plaintiff. See D.I. 254. The Verified
Fourth Amended Complaint (“FAC”) and the TAC are otherwise identical. Accordingly,
the Court and parties agreed that there was no need to re-file motions to dismiss the FAC
and that the decision here would apply to the TAC and the FAC. References to Plaintiff in
this Memorandum Opinion are to the Plaintiff as identified in the TAC, the pleading
addressed by the motions sub judice.
12
TAC ¶¶ 31–32.
13
TAC ¶ 33.
5
EEP.14 EEP GP owns 100% of the voting shares and 11.7% of the listed shares
(i.e., LLC membership interests) of Enbridge Management.15 EEP GP and Enbridge
Management collectively own a 52.8% limited partnership interest in EEP.16
Defendant, Enbridge, Inc. (“Enbridge”), is a Canadian corporation that indirectly
owns 100% of, and controls, EEP GP.17 As such, Enbridge controls, indirectly
through EEP GP and Enbridge Management, a 52.8% limited partnership interest in
EEP.18 Defendants, Enbridge Pipelines (Alberta Clipper) L.L.C. and Enbridge
Energy, Limited Partnership, are parties to certain agreements relating to the
Transaction that Plaintiff seeks to reform.19 Both entities are “under the common
control of Enbridge and EEP GP.”20
14
TAC ¶ 34.
15
Id. (“EEP GP delegated the power and authority to manage EEP to Enbridge
Management. . . .”).
16
TAC ¶ 33. Enbridge Management’s publicly traded units are non-voting. See id.17
TAC ¶¶ 33, 35.
18
TAC ¶ 35.
19
TAC 1, ¶¶ 50–51.
20
Id.6
At the time of the Transaction, all of EEP GP’s directors and officers held
identical positions at Enbridge Management.21 EEP GP’s (and Enbridge
Management’s) board at that time comprised nine directors, all of whom are named
defendants: Jeffrey A. Connelly, Rebecca B. Roberts, Dan A. Westbrook, J. Herbert
England, J. Richard Bird, C. Gregory Harper, Mark A. Maki, John K. Whelen and
D. Guy Jarvis (collectively, the “Director Defendants”).22 Connelly, Roberts and
Westbrook were the members of the EEP GP special committee that was formed to
negotiate the Transaction (the “Special Committee”).23
Defendant, Piper Jaffray & Co., a Delaware corporation, is the successor by
merger to Simmons & Company International (“Simmons”), the entity that served
as financial advisor to the Special Committee.24 It is alleged that Simmons
specialized in “issuing fairness opinions on conflicted transactions between master
limited partnerships and their controlling sponsor entities.”25
21
TAC ¶ 34.
22
TAC ¶¶ 39–47.
23
TAC ¶ 48.
24
TAC ¶ 49.
25
Id.7
B. The Alberta Clipper Transaction
The Transaction involved EEP’s repurchase of a 66.67% interest in the United
States segment of the Alberta Clipper pipeline (the “AC Interest”) for $1.0 billion
from EEP GP.26 The TAC identifies three metrics by which the Special Committee
and Simmons knew that EEP was overpaying for the AC Interest.
First, in July 2009, EEP GP purchased from EEP the same AC Interest,
including a right to expand the Alberta Clipper (US) pipeline (the “Expansion
Right”) for $800 million, which represented a multiple of 7x projected EBITDA for
the AC Interest (the “2009 Sale”).27 The Expansion Right included rights to projects
that would increase the Alberta Clipper (US) pipeline’s throughput capacity from
450,000 bpd to 800,000 bpd, a 78% increase in capacity.28 In contrast to the
2009 Sale, the Transaction price of $1.0 billion represents a multiple of 10.7x
26
TAC ¶¶ 1, 3. It is not entirely clear from the TAC which Enbridge entity (or entities)
stood on the other side of the Transaction from EEP. The TAC alleges that EEP acquired
the AC Interest from EEP GP. See, e.g., TAC ¶ 1. According to Brinckerhoff V, EEP
repurchased Enbridge’s AC Interest from Enbridge through EEP GP. See, e.g.,
Brinckerhoff V, 159 A.3d at 246 (“In 2014, Enbridge proposed that EEP repurchase
Enbridge’s interest in the Alberta Clipper project”). That characterization is supported by
reasonable inferences drawn from the TAC. See TAC ¶¶ 23–25, 63, 78, 99.
27
TAC ¶ 6.
28
TAC ¶ 8.
8
projected EBITDA for the AC Interest.29 While the purchase price increased
substantially, the AC Interest’s projected EBITDA between 2009 and 2015
decreased by almost 20%.30 This dramatic decline in value can be attributed to the
fact that Canadian crude oil prices had plummeted, tariffs under which the AC
Interest transports crude oil were shortened by six years (the passage of time between
2009 and 2015), and the tariff agreement was to be “rebased” shortly after the
Transaction would close.31
Second, the Alberta Clipper (US) pipeline operates under a cost-of-service
model that allows it to recover its costs over the expected life of the pipeline.32
In this regard, the pipeline’s current “rate base,” which is the remaining capital
investment in the pipeline that has not already been recovered, is a meaningful proxy
for its current market and fair value.33 The pipeline’s average rate base was
approximately $1.06 billion in 2014 and $1.01 billion in 2015, thus implying that
29
TAC ¶ 6.
30
TAC ¶ 7.
31
Id.
32
TAC ¶ 10.
33
Id.
9
the market and fair value of the AC Interest (two-thirds of the pipeline) was between
$674 million and $707 million at the time of the Transaction.34
Third, in a September 12, 2014 memorandum, EEP GP management
explained to the EEP GP board that the discounted cash flow equity value of the
AC Interest was $478 million.35 Based on this valuation, at the $1.0 billion nominal
Transaction price, which consisted of $694 million in newly issued Class E units and
early repayment of a promissory note in the amount of $306 million,36 EEP paid
approximately 45% above EEP GP management’s DCF equity value of the
AC Interest.37
The TAC also alleges that the Transaction was not fair and reasonable to EEP
and its public unitholders because EEP GP received disproportionate benefits that
the Director Defendants did not consider when approving the Transaction.38
Specifically, EEP paid the equity portion of the purchase price by issuing to EEP GP
18,114,975 shares of a new class of EEP partnership interests designated as “Class E
34
Id.
35
TAC ¶ 13.
36
TAC ¶¶ 3, 206.
37
TAC ¶ 13.
38
TAC ¶ 19.
10
Units.”39 The Class E Units allegedly have unique tax benefits resulting from the
allocation of approximately 62% of gross income associated with the Transaction
away from the Class E units to other unit holders (the “Special Tax Allocation”).40
Moreover, the Class E Units have a “Liquidation Preference” that the Class A units
do not enjoy. Nevertheless, the Special Committee approved the Transaction
without valuing the additional consideration the Liquidation Preference and Special
Tax Allocation would provide to EEP GP.41
The Special Committee hired Simmons as its financial advisor to evaluate
whether the Transaction “was representative of an arm’s length transaction.”42
Simmons’ fairness opinion stated that the Transaction was fair from a financial point
of view.43 According to Plaintiff, Simmons’ analysis ignored the 2009 Sale, the
already-exploited Expansion Right with no promise of further expansion rights, the
20% drop in the AC Interest’s EBITDA, a shorter tariff term, a cost rebasing in July
2015, the rate base as a meaningful proxy for the AC Interest’s current market and
39
TAC ¶ 3.
40
TAC ¶ 80.
41
TAC ¶¶ 21–22. The Special Tax Allocation was implemented by amending EEP’s
Amended and Restated Agreement of Limited Partnership (the “6th LPA”). TAC ¶¶ 1, 87.
As noted, references to the 6th LPA or the subsequent 7th LPA are to the “LPA.”
42
Brinckerhoff V, 159 A.3d at 249.
43
TAC ¶¶ 117–18.
11
fair value, EEP GP’s 2014 DCF analysis and the value of the Special Tax Allocation
and Liquidation Preference to EEP GP.44
C. The LPA
The LPA addresses EEP’s relationship with EEP GP and the Affiliates and
memorializes EEP’s governance structure. The provisions relevant to this dispute
are:
Section 6.6(e):
Neither the General Partner nor any of its Affiliates shall sell, transfer
or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that
are fair and reasonable to the Partnership; provided however, that the
requirements of this Section 6.6(e) shall be deemed to be satisfied . . . as
to any transaction on the terms of which are no less favorable to the
Partnership than those generally being provided to or available from
unrelated third parties.45
Section 6.8(a):
Notwithstanding anything to the contrary set forth in this Agreement,
no Indemnitee shall be liable for monetary damages to the Partnership,
the Limited Partners, the Assignees or any other Persons who have
acquired interests in the Units, for losses sustained or liabilities incurred
44
TAC ¶¶ 9, 12, 14, 21–22, 80, 99, 102.
45
Emphasis in original. “‘Affiliate’ means, with respect to any Person, any other Person
that directly or indirectly controls, is controlled by or is under common control with, the
Person in question.” LPA, at. II. “‘Person’ means an individual or a corporation,
partnership, limited liability company, trust, unincorporated organization, association or
other entity.” LPA, art. II.
12
as a result of any act or omission if such Indemnitee acted in good
faith.46
Section 6.9(c):
Whenever a particular transaction . . . is required under this Agreement
to be “fair and reasonable” to any Person, the fair and reasonable nature
of such transaction . . . shall be considered in the context of all similar
or related transactions.
Section 6.10(b):
[EEP GP] may consult with [advisors], and any act taken or omitted in
reliance upon the opinion . . . of such [advisor’s] professional or expert
competence shall be conclusively presumed to have been done or
omitted in good faith and in accordance with such opinion.
Section 6.10(d):
Any standard of care and duty imposed by this Agreement or under the
Delaware Act or any applicable law, rule or regulation shall be
modified, waived or limited as required to permit the General Partner
to act under this Agreement . . . and to make any decision pursuant to
the authority prescribed in this Agreement, so long as such action is
reasonably believed by the General Partner to be in the best interests of
the Partnership.
Section 6.15(b):
Notwithstanding anything to the contrary set forth in this
Agreement . . . Sections 6.1, . . . 6.6 . . . [and] 6.10 shall apply to
[Enbridge Management] to the same extent as such provisions apply to
the General Partner.
46
The LPA defines “Indemnitee” to include “[EEP GP], any Person who is or was an
Affiliate of [EEP GP] . . . , [and] any Person who is or was an officer, director, employee,
partner, agent, or trustee of [EEP GP]. . . .” LPA, art. II.
13
D. Plaintiff Challenges the Transaction – Brinckerhoff IV
Plaintiff filed his first complaint challenging the Transaction on June 20,
2015. On April 29, 2016, the Court issued a Memorandum Opinion
(Brinckerhoff IV) in which it dismissed Plaintiff’s then-operative complaint upon
concluding that EEP GP complied in all respects with the provisions of the LPA in
connection with the Transaction. The Court also concluded that Enbridge, Enbridge
Management and the Director Defendants could not be held liable for breach of a
contract (the LPA) to which they were not parties and, in any event, could not be
held liable for money damages unless Plaintiff well-pled that they acted in bad faith
(which, the Court held, he had failed to do).47 Finally, having dismissed the contract-
based claims, the Court also dismissed Plaintiff’s claims for breach of the implied
covenant of good faith and fair dealing, breach of residual fiduciary duties and his
claim for reformation or rescission.48
E. The Supreme Court Reversal and Remand – Brinckerhoff V
On March 28, 2017, the Supreme Court reversed, in part, Brinckerhoff IV,
concluding that: (1) this Court had misinterpreted EEP GP’s and the Affiliates’
47
Brinckerhoff IV, 2016 WL 1757283, at *2, *12 n.77.
48
Id. at *18.
14
affirmative obligations under the LPA49; (2) the Transaction is “expressly governed
by Section 6.6(e)”50; (3) Plaintiff sufficiently pled bad faith because he pled facts
“supporting an inference that EEP GP did not reasonably believe it was acting in the
best interest of the partnership” in approving the Transaction51; (4) the Special Tax
Allocation did not violate Sections 5.2(c) and 15.3(b) of the LPA52; (5) Enbridge
was an “Affiliate” of EEP GP53; and (6) reformation or rescission remain viable
equitable remedies that may be awarded in the Court’s discretion upon a finding of
breach.54 The Court concluded by “remand[ing] the matter for further proceedings
consistent with this Opinion.”55
49
Brinckerhoff V, 159 A.3d at 247. More specifically, the Supreme Court held that the
LPA provisions that generally “exculpate EEP GP and others from monetary damages if
they act in good faith and replace default fiduciary duties with a contractual good faith
standard . . . do not [trump] the specific [provisions]” that set forth EEP GP’s and the
Affiliates’ obligations with regard to contracts between EEP and EEP GP or its Affiliates.
Id.
50
Id. at 255 (noting that Section 6.6(e) expressly requires that conflicted transactions be
“fair and reasonable” to EEP).
51
Id. at 247. See also id. at 255 (“Brinckerhoff has pled viable claims that the defendants
acted in bad faith when undertaking the Alberta Clipper transaction.”).
52
Id. at 257–58.
53
Brinckerhoff V, 159 A.3d at 254.
54
Id. at 262. The Supreme Court did not disturb this Court’s dismissal of Plaintiff’s breach
of the implied covenant of good faith and fair dealing claims. Id.
55
Id.
15
F. Procedural Posture
After Brinckerhoff V, Plaintiff amended the complaint three more times, and
each amendment was met with a motion to dismiss from Defendants. At issue here
is the third amendment, the TAC. That pleading comprises eight counts: Count I
asserts breach of the LPA and the implied covenant of good faith and fair dealing
against only EEP GP and Enbridge Management (having previously dropped this
claim as against Enbridge and the Director Defendants following Brinckerhoff IV);
Counts II, III, V, VII and VIII assert aiding and abetting and tortious interference
with EEP GP’s performance of the LPA against Enbridge, the Director Defendants,
Enbridge Management and Simmons; Count IV asserts breach of residual fiduciary
duties against Enbridge and the Director Defendants; and Count VI seeks
reformation or rescission of the Transaction.56
The TAC expands on the factual allegations set forth in the first complaint.
Thus, the TAC continues to allege the following well-pled facts that were central to
the Supreme Court’s rulings in Brinckerhoff V:
 Enbridge controls a 52.8% limited partnership interest in EEP57;
 the Transaction did not include Expansion Rights, unlike the 2009 transaction
which included expansion projects that would increase the Alberta Clipper
56
These claims are substantially similar to those asserted in the first complaint.
57
Brinckerhoff V, 159 A.3d at 248; TAC ¶ 35.
16
(US) pipeline’s throughput capacity from 450,000 to 800,000 bpd, a 78%
increase in capacity58;
 during the time period between the 2009 Sale and the Transaction, the AC
Interest “had become much riskier” for a variety of reasons, as reflected in the
Alberta Clipper project’s nearly 20% decrease in projected EBITDA. Further,
tariffs on the Alberta Clipper faced increased risk that they would be rebased
with long-term negative effects on revenue. Despite this negative
environment, on September 16, 2014, Enbridge proposed a sale of the AC
Interest, excluding the earlier Expansion Right, to EEP for $1.0 billion, a
multiple of 10.7x projected EBITDA59;
 “EEP paid $200 million more to repurchase the same assets it sold in 2009,
despite declining EBITDA, slumping oil prices, and the absence of the
expansion rights sold in 2009…. [and] through the Special Tax Allocation,
EEP GP added hundreds of millions of dollars more in benefits for Enbridge
to the detriment of the public unitholders.”60
 EEP GP and Enbridge Management knew (through the Director Defendants)
when approving the Transaction that: (a) they did not consider the 2009
transaction despite express direction in the LPA that they do so61; (b) Enbridge
changed its valuation methodology in 2014 when it valued the AC Interest as
a multiple of EBITDA, as compared to 2009, when it valued the AC Interest
at cost62; (c) they failed to consider that the AC Interest’s projected next year
EBITDA was 20% lower than it was in 2009, while the asset was valued 25%
higher in 200963; (d) they failed to negotiate the purchase price despite the
negative oil pricing environment, Enbridge’s control over the volume flowing
58
Brinckerhoff V, 159 A.3d at 249 n.4; TAC ¶ 8.
59
Brinckerhoff V, 159 A.3d at 250; TAC ¶¶ 6–7.
60
Brinckerhoff V, 159 A.3d at 257; TAC ¶ 152.
61
TAC ¶¶ 9, 25(a).
62
TAC ¶¶ 7, 25(c).
63
TAC ¶ 25(b).
17
through the pipeline and shorter tariff agreements64; (e) they failed to value
the Special Tax Allocation benefits to EEP GP, and the corresponding
financial detriment to the unaffiliated unitholders65; (f) they failed to take into
consideration the lack of the Expansion Right sold in 200966; and (g) they
relied on a flawed fairness opinion from Simmons.67
Defendants have moved to dismiss the TAC both for failure to make a demand
on the EEP GP board to prosecute the derivative claims and for failure to state legally
viable claims.68
II. LEGAL ANALYSIS
The many chapters of the Brinckerhoff saga, in one form or another, each
recite the applicable standards of review. I’ll not repeat them at length here. Suffice
it to say, under Court of Chancery Rule 23.1(a), “the complaint shall [] allege with
particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff
desires from the directors or comparable authority and the reasons for the plaintiff’s
failure to obtain the action or for not making the effort.”69 Under Court of Chancery
64
TAC ¶ 7.
65
TAC ¶ 19.
66
TAC ¶ 8.
67
Brinckerhoff V, 159 A.3d at 260; see TAC ¶ 160.
68
See Def. Piper Jaffray & Co.’s Mot. to Dismiss (D.I. 182); Enbridge Defs.’ Mot. to
Dismiss (D.I. 183).
69
Ct. Ch. R. 23.1(a).
18
Rule 12(b)(6), dismissal is appropriate only if the plaintiff would be unable to
recover under “any reasonably conceivable set of circumstances susceptible of
proof” based on the facts pled in the complaint.70
A. Demand Futility Was Well-Pled
The well-pled factual allegations in the TAC mirror those pled in the first
complaint that was addressed in Brinckerhoff IV.71 There, this Court held that the
complaint adequately pled demand futility.72 Brinckerhoff V did not disturb this
finding. Accordingly, it is law of the case that Plaintiff has pled sufficient facts to
excuse demand upon EEP GP.73
B. The Direct Breach of Contract Claims Must Be Dismissed
The TAC purports to state both direct and derivative claims for breach of the
LPA. “The Tooley74 direct/derivative test is substantially the same for claims
70
Gen. Motors S’holder Litig., 897 A.2d at 168 (citing Savor, Inc. v. FMR Corp., 812 A.2d
894, 896–97 (Del. 2002)).
71
Compare TAC ¶¶ 132–37, with First Compl. ¶¶ 74–79.
72
Brinckerhoff IV, 2016 WL 1757283, at *9.
73
“The ‘law of the case’ is established when a specific legal principle is applied to an issue
presented by facts which remain constant throughout the subsequent course of the same
litigation.” Kenton v. Kenton, 571 A.2d 778, 784 (Del. 1990).
74
Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031 (Del. 2004).
19
involving limited partnerships.”75 Under Tooley,
whether a claim is solely derivative or may continue as a dual-natured
claim “must turn solely on the following questions: (1) who suffered
the alleged harm (the corporation or the suing stockholders,
individually); and (2) who would receive the benefit of any recovery or
other remedy (the corporation or the stockholders, individually)?”76
Somewhere between the direct and derivative claim lies the “dual-natured claim,”
which arises where:
(1) a stockholder having majority or effective control causes the
corporation to issue ‘excessive’ shares of its stock in exchange for
assets of the controlling stockholder that have a lesser value; and (2) the
exchange causes an increase in the percentage of the outstanding shares
owned by the controlling shareholder, and a corresponding decrease in
the share percentage owned by the public (minority) shareholders.77
Stated differently, dual-natured claims concern “a controlling shareholder and
transactions that resulted in an improper transfer of both economic value and voting
power from the minority stockholders to the controlling stockholder.”78
75
El Paso Pipeline GP Co., L.L.C. v. Brinckerhoff, 152 A.3d 1248, 1260 (Del. 2016)
(internal quotations omitted).
76
Id. (quoting Tooley, 845 A.2d at 1033, 1039).
77
Id. at 1263 (quoting Gentile v. Rossette, 906 A.2d 91, 100 (Del. 2006)). I note that there
is reason to question whether Gentile will remain the law of Delaware. See El Paso, 152
A.3d at 1265-66 (Strine, C. J., concurring); Charles Almond v. Glenhill Advisors LLC, 2018
WL 3954733, at *24 (Del. Ch. Aug. 17, 2018) (observing that Gentile may be losing
purchase); Sciabacucchi v. Liberty Broadband Corp., 2018 WL 3599997, at *8–10 (Del.
Ch. July 26, 2018) (same). At the very least, El Paso makes clear that Gentile and its
progeny should be construed narrowly. El Paso, 152 A.3d at 1264.
78
El Paso, 152 A.3d at 1263 (emphasis supplied).
20
In El Paso, the Court observed that “[t]he core theory of Brinckerhoff's
complaint was that the Partnership was injured when the defendants caused [the
Partnership] to pay too much in the [Transaction].”79 The same is true here.
As explained in El Paso,
Such claims of corporate overpayment are normally treated as causing
harm solely to the corporation and, thus, are regarded as derivative.
In Tooley terms, the harm is to the corporation, because such claims
“naturally assert that the corporation’s funds have been wrongfully
depleted, which, though harming the corporation directly, harms the
stockholders only derivatively so far as their stock loses value.” The
recovery—“restoration of the improperly reduced value”—flows to the
corporation.80
The TAC does not contain a single allegation regarding voting harm
(in addition to economic harm) such that it could viably plead a dual-natured claim.
This is not surprising given that the Transaction involved EEP’s acquisition of a
discreet asset, albeit from a controller. Moreover, “to prove that a claim is direct, a
plaintiff ‘must demonstrate that the duty breached was owed to the stockholder and
79
Id. at 1260–61 (first alteration in original). Mr. Brinckerhoff was also the plaintiff in
El Paso.
80
El Paso, 152 A.3d at 1261. See also Sciabacucchi, 2018 WL 3599997, at *7 (“In the
typical corporate overpayment case, a claim against the fiduciaries for redress as
exclusively derivative.”) (citation omitted).
21
that he or she can prevail without showing an injury to the corporation.’” 81
Section 6.6(e) states that in a conflicted transaction, such as the Transaction at issue
here, the “General Partner or any Affiliate” has a duty to act in a manner that is “fair
and reasonable to the Partnership.”82 One of the ways in which EEP GP and the
Affiliates can meet that duty is if the Transaction terms are “no less favorable to the
Partnership than those being provided to or available from unrelated third parties.”83
Indeed, by its terms, Section 6.6(e) does not grant any protections directly to EEP’s
individual unitholders. Accordingly, a breach of Section 6.6(e), as alleged here,
cannot give rise to a direct claim. To the extent the TAC purports to state direct
claims for harm flowing from the Transaction, the motion to dismiss those claims
must be granted.
C. The Derivative Claims for Breach of Contract Survive Dismissal
As for Plaintiff’s derivative claim for breach of contract against EEP GP as
stated in Count I, the Supreme Court has already held that Plaintiff’s allegations in
the first Complaint (which are still present in the TAC) “are sufficient to state a claim
81
Id. at 1260 (quoting Tooley, 845 A.2d at 1033, 1039).
82
Emphasis supplied.
83
LPA § 6.6(e) (emphasis supplied).
22
for breach of the requirements of Section 6.6(e).”84 This is the law of the case and
I see absolutely no basis to revisit it.85 Accordingly, Defendants’ motion to dismiss
this aspect of Count I must be denied.
D. Brinckerhoff IV Incorrectly Dismissed the Breach of the LPA Claim
Against “Affiliates” and “Indemnitees”
“[T]he . . . Transaction is expressly governed by Section 6.6(e).” 86 And, as
described by the Supreme Court, the Transaction involved EEP, EEP GP and EEP
GP Affiliates (Enbridge and Enbridge Management):
The Alberta Clipper transaction is a contract with an Affiliate
(Enbridge) to sell property (Alberta Clipper Interest) back to the
Partnership (EEP). Section 6.6, entitled “Contracts with Affiliates,”
and in particular Section 6.6(e), directly addresses the affirmative
obligation EEP GP must satisfy for such transactions: “[n]either the
General Partner nor any of its Affiliates shall sell, transfer or convey
any property to, or purchase any property from, the Partnership, directly
84
Brinckerhoff V, 159 A.3d at 257.
85
I note that the Supreme Court affirmed this Court’s holding that the Special Tax
Allocation did not violate Sections 5.2(c) and 15.3(b) of the LPA. Brinckerhoff V,
159 A.3d at 257–58. Therefore, Sections 5.2(c) and 15.3(b) cannot form the basis of
Plaintiff’s breach of contract claim. The Supreme Court also noted, however, that the
Special Tax Allocation is a factual predicate of Plaintiff’s claim that the Transaction was
not “fair and reasonable to the Partnership.” Id. at 257 (“According to Brinckerhoff, EEP
paid $200 million more to repurchase the same assets it sold in 2009, despite declining
EBITDA, slumping oil prices, and the absence of the expansion rights sold in 2009.
He also alleged that, through the Special Tax Allocation, EEP GP added hundreds of
millions of dollars more in benefits for Enbridge to the detriment of the public unitholders.
These allegations are sufficient to state a claim for breach of the requirements of
Section 6.6(e).”). Thus, evidence relating to the Special Tax Allocation may be relevant
to support Plaintiff’s other breach of contract claims.
86
Id. at 255.
23
or indirectly, except pursuant to transactions that are fair and reasonable
to the Partnership.”87
In Brinkerhoff I, the court likewise concluded that Enbridge was an Affiliate under
the LPA:
The LPA states that “‘Affiliate’ means, with respect to any Person, any
other Person that directly or indirectly controls, is controlled by or is
under common control with, the Person in question.” Enbridge is
alleged to control EEP GP, and thus, for the purposes of a motion to
dismiss, Enbridge is an ‘Affiliate’ of EEP GP.88
Enbridge’s status as an EEP GP Affiliate is significant under Section 6.6(e) because,
like EEP GP, Enbridge was obliged not to “sell, transfer or convey any property to,
or purchase any property from” EEP “except pursuant to transactions that are fair
and reasonable to [EEP].”89
As noted in Brinckerhoff I, the LPA “does not stop there.”90 At Section 6.8(a),
the LPA provides:
Notwithstanding anything to the contrary set forth in this Agreement,
no Indemnitee shall be liable for monetary damages to the Partnership,
87
Id. at 254. As defined, Enbridge Management is also expressly identified as an
“Affiliate” of EEP GP. See LPA, art. II (definition of Affiliate – “For purposes of this
Agreement, [Enbridge Management] is an Affiliate of [EEP GP].”).
88
Brinckerhoff I, 2011 WL 4599654, at *8, aff’d, Brinckerhoff III, 67 A.3d 369, rev’d on
other grounds, Brinckerhoff V, 159 A.3d at 259–60. See also TAC ¶ 35 (alleging that
EEP GP is controlled by Enbridge).
89
LPA, § 6.6(e).
90
Brinckerhoff I, 2011 WL 4599654, at *8.
24
the Limited Partners, the Assignees or any other Persons who have
acquired interests in the Units, for losses sustained or liabilities incurred
as a result of any act or omission if such Indemnitee acted in good
faith.91
“The LPA defines ‘Indemnitee’ to include ‘[EEP GP], any person who is an Affiliate
of [EEP GP] [to include Enbridge and Enbridge Management] . . . [and] any Person
who is or was an officer, director, employee, partner, agent or trustee of
[EEP GP] . . . [to include the Director Defendants].’”92 Brinckerhoff I continued:
Read together, Article 6.8(a) and the LPA’s definitions of “Indemnitee”
and “Affiliate” provide that the only duty that EEP or its unit holders
may successfully hold the Defendants monetarily liable for is a breach
of the duty to act in good faith. The LPA’s definition of “Indemnitee”
includes EEP GP, EEP GP’s Board, and “Affiliates” of EEP GP.
As mentioned above, Enbridge is an “Affiliate” of EEP GP because
Enbridge is alleged to control EEP GP. Moreover, Enbridge
Management is an “Affiliate” of EEP GP because it is alleged to be
“under common control with” EEP GP. Thus, EEP GP, EEP GP’s
Board, Enbridge, and Enbridge Management is each an “Indemnitee”
for purposes of the LPA, and Article 6.8(a) explicitly states that an
“Indemnitee” will not be liable to EEP or its unit holders for any actions
taken in good faith.93
With this construction in mind, Brinckerhoff I concluded:
With regard to the other Defendants [Enbridge, Enbridge Management
and the Director Defendants], EEP or its unit holders may only, under
the LPA, successfully hold them monetarily liable for a breach of the
duty to act in good faith. Thus, in order to survive the Defendants’
91
Id. (quoting LPA § 6.8(a)).
92
Id.
93
Id. at *9.
25
motions to dismiss, Brinckerhoff must plead facts suggesting that the
Defendants acted in bad faith.94
In Brinckerhoff IV, I held that claims against defendants other than EEP GP
under the LPA could not be sustained since none of the other defendants is a party
to the LPA.95 According to Brinckerhoff I, as affirmed by Brinckerhoff III and again
implicitly by Brinckerhoff V, this holding in Brinckerhoff IV was wrong. Claims
against the Affiliates and Indemnitees under the LPA will survive dismissal if the
Plaintiff has well-pled that they acted in bad faith. And Brinckerhoff V already held
that Plaintiff “has pled viable claims that the defendants acted in bad faith when
undertaking the [Transaction].”96 Thus, Plaintiff’s claims against Enbridge,
Enbridge Management and the Director Defendants for breach of the LPA may be
reasserted in an amended complaint should Plaintiff choose to reinstate them.97
94
Id.
95
Brinckerhoff IV, 2016 WL 1757283, at *12 n.77 (“To the extent Brinckerhoff’s claims
against the defendants other than EEP GP sound in breach of contract, the claims fail as a
matter of law as Delaware does not recognize breach of contract claims against non-parties
to the contract.”) (citations omitted). I note that in addition to being an Affiliate, per
Section 6.15(b) of the LPA, Enbridge Management is bound by Sections 6.6 and 6.10 to
the same extent EEP GP is bound. See LPA, § 6.15(b); TAC ¶ 34.
96
Brinckerhoff V, 159 A.3d at 255.
97
Under the circumstances, Court of Chancery Rule 15(aaa) would not bar the amendment
since the Court incorrectly dismissed the claims in an earlier ruling and the Plaintiff was
justified in amending his complaint to account for that dismissal (by dropping the claim).
The latest round of dispositive motion practice did not implicate the improperly dismissed
claims because they had already been dropped in a previously amended complaint.
26
E. This Court’s Prior Dismissal of the Breach of the Implied Covenant
Claims Remains in Place
With regard to EEP GP’s, Enbridge Management’s (and, if amended, the
Affiliates’ and Indemnitees’) alleged breach of the implied covenant of good faith
and fair dealing, Brinckerhoff V held that “the Alberta Clipper transaction is
expressly governed by Section 6.6(e).”98 Accordingly, the Supreme Court left
undisturbed this Court’s determination that “the LPA contemplates each breach
alleged in the Complaint” and that there was “no reasonable basis to allow the
implied covenant claims to stand.”99 In keeping with the law of the case, to the
extent the TAC purports to state a claim for breach of the implied covenant
(in Count I or elsewhere), Defendants’ motion to dismiss that claim must be granted.
F. The “Secondary Claims” for Aiding and Abetting Breach of Contractual
Fiduciary Duties, Tortious Interference with Contract and Breach of
Residual Fiduciary Duties Against the Affiliates and Indemnitees Are
Dismissed
Plaintiff alleges in Count II that Enbridge and the Director Defendants aided
and abetted EEP GP and Enbridge Management’s breaches of contractual fiduciary
See TVI Corp. v. Gallagher, 2013 WL 5809271, at *20–21 (Del. Ch. Oct. 28, 2013)
(holding that Rule 15(aaa) does not apply when a proposed amendment is “not within the
purview” of a previously decided motion to dismiss).
98
Brinckerhoff V, 159 A.3d at 254.
99
Brinckerhoff IV, 2016 WL 1757283, at *18.
27
duties.100 At Count V, Plaintiff alleges that if Enbridge Management is not liable for
breach of contractual fiduciary duties, it is liable as an aider and abettor.101
At Count III, Plaintiff alleges that Enbridge and the Director Defendants tortiously
interfered with EEP GP’s performance of the LPA.102 Plaintiff also claims, in the
alternative, that if Enbridge Management is not liable for breach of contract, it is
liable for tortious interference with contract.103 And then, at Count IV, Plaintiff
alleges that Enbridge and the Director Defendants breached residual fiduciary
duties.104 For reasons explained below, these secondary claims fail as a matter of
law.
1. Aiding and Abetting Breach of Contractual Fiduciary Duties
Delaware law generally does not recognize a claim for aiding and abetting a
breach of contract.105 When a contract embraces a fiduciary standard of conduct,
100
TAC ¶¶ 163–74, 207–16. The first complaint did not assert aiding and abetting against
Simmons.
101
TAC ¶ 199.
102
TAC ¶¶ 175–86.
103
TAC ¶ 199.
104
TAC ¶¶ 187–96.
105
See Gotham P’rs, L.P. v. Hallwood Realty P’rs, L.P., 817 A.2d 160, 172 (Del. 2002);
Norton v. K-Sea Transp. P’rs L.P., 67 A.3d 354, 360 (Del. 2013) (“Limited partnership
agreements are a type of contract.”).
28
however, one who aids and abets a breach of that standard can be held liable for
aiding and abetting a breach of a “contractual fiduciary duty.”106 Even so, in the
master limited partnership context, this court has made clear that when the limited
partnership agreement expressly eliminates all fiduciary duties, there can be no
“contractual fiduciary duty” and, therefore, there can be no aiding and abetting a
breach of that duty.107 In the shadow of this settled law, the viability (or not) of
Plaintiff’s aiding and abetting claims, at least at the threshold, turns on whether the
LPA expressly eliminated all fiduciary duties, including contractual duties.108
According to Plaintiff, “[t]he [Supreme] Court [has already] interpreted the
‘fair and reasonable’ standard [in Section 6.6(e)] as something similar, if not
equivalent, to entire fairness review, a contractual fiduciary standard. . . .”109 Even
a cursory review of Brinckerhoff V reveals that this is, in fact, precisely what the
106
See Allen v. El Paso Pipeline GP Co., L.L.C., 113 A.3d 167, 194 (Del. Ch. 2014) (citing
Gotham P’rs, L.P., 817 A.2d at 173) (recognizing the creation of “contractual fiduciary
duties”); Feely v. NHAOCG, LLC, 62 A.3d 649, 659 (Del. Ch. 2012) (holding plaintiff pled
a viable aiding and abetting breach of a contractual fiduciary duty claim since the
contractual standard at issue was intended to “supplant traditional fiduciary duties”)
(citation omitted).
107
Dieckman v. Regency GP LP, 2018 WL 1006558, at *4 (Del. Ch. Feb. 20, 2018).
108
Id.109
Pl.’s Answering Br. to Enbridge Defs.’ Mot. to Dismiss 2 (internal quotations omitted)
(citing Brinckerhoff V, 159 A.3d at 262) (D.I. 212).
29
Supreme Court said.110 Indeed, contrary to the LPA at issue in Dieckman (invoked
by defendants here), which expressly eliminated all fiduciary duties (contractual or
at common law),111 Section 6.10(d) of the LPA modifies, waives or limits common
law duties in favor of a contractual scheme that imports familiar fiduciary standards:
Any standard of care and duty imposed by this Agreement or under the
Delaware Act of any applicable law, rule or regulation shall be
modified, waived or limited as required to permit the General Partner
to act under this Agreement and any other agreement contemplated by
this Agreement and to make any decision pursuant to the authority
prescribed in this Agreement, so long as such action is reasonably
believed by the General Partner to be in the best interests of the
Partnership.
In Norton v. K-Sea Transp. Partners, L.P., the Supreme Court interpreted language
nearly identical to Section 6.10(d) and held that it “eliminates any [common law
fiduciary] duties that otherwise exist and replaces them with a contractual fiduciary
duty. . . .”112 Brinckerhoff V revisited this language but ultimately chose “not to
upset Norton’s settled interpretation of Section 6.10(d).”113 Thus, the fact that the
110
Brinckerhoff V, 159 A.3d at 262 (“EEP GP faces potential liability for breach of
Section 6.6(e), under a contractual fiduciary standard similar if not identical to entire
fairness.”).
111
See Dieckman, 2018 WL 1006558, at *2, *4.
112
67 A.3d at 362.
113
Brinckerhoff V, 159 A.3d at 253–54. The Enbridge Defendants acknowledge as much
in their reply brief. See Enbridge Defs.’ Reply Br. 23 (D.I. 227).
30
aiding and abetting claim is tied to a contractual duty does not necessarily defeat the
claim.
That the aiding and abetting claim is conceptually viable does not end the
inquiry. Plaintiff alleges that Enbridge, Enbridge Management and the Director
Defendants aided and abetted EEP GP in breaching Section 6.6(e).114 Yet, as
discussed above, each of the alleged aider and abettors owe their own duties to EEP
under the express terms of Section 6.6(e). They cannot, therefore, be held liable for
aiding and abetting a breach of that provision.115 Counts II and V (aiding and
abetting against Enbridge Management) are dismissed.
2. Tortious Interference with Contract
“[A] party to a contract cannot tortiously interfere with that same
contract. . . .”116 In other words, Delaware law generally requires that a defendant
to a tortious interference claim “be a stranger to both the contract and the business
114
TAC ¶¶ 163–74, 197–200.
115
Gotham P’rs, L.P., 817 A.2d at 172 (“[A] claim for aiding and abetting a breach of a
fiduciary duty [requires] . . . a defendant, who is not a fiduciary . . . and [] damages to the
plaintiff result[ing] from the concerted action of the fiduciary and the non-fiduciary.”
(emphasis supplied)) (quoting Fitzgerald v. Cantor, 1999 WL 182573, at *1 (Del. Ch.
Mar. 25, 1999)).
116
Grunstein v. Silva, 2009 WL 4698541, at *16 (Del. Ch. Dec. 8, 2009); Tenneco Auto.,
Inc. v. El Paso Corp., 2007 WL 92621, at *5 (Del. Ch. Jan. 8, 2007) (holding that one
cannot tortiously interfere with a contract to which it is a party); Shearin v. E.F. Hutton
Gp., Inc., 652 A.2d 578, 590 (Del. Ch. 1994) (same).
31
relationship giving rise to and underpinning the contract.”117 Enbridge, Enbridge
Management and the Director Defendants are not strangers to the LPA or to the
Transaction. The tortious interference with contract claims against them (Counts III
and V), therefore, must be dismissed.
3. Breach of Residual Fiduciary Duties
Plaintiff alleges breach of residual fiduciary duties against Enbridge and the
Director Defendants for “caus[ing] the Partnership to enter into the Transaction in
breach of Section 6.6(e).”118 The Supreme Court held that Section 6.6(e), the LPA
provision that expressly governs the Transaction,119 replaces any common law duty
with a contractual fiduciary duty that is “similar, if not equivalent to entire fairness
review.”120 As EEP GP Affiliates, Enbridge and the Director Defendants are bound
by Section 6.6(e).121 Brinckerhoff I held, and Brinckerhoff III and Brinckerhoff V
(at least implicitly) affirmed, that claims against the Affiliates and Indemnitees
under the LPA will survive dismissal if the Plaintiff well-pleads their actions meet
117
AM General Holdings LLC v. Renco Group, Inc., 2013 WL 5863010, at *12 (Del. Ch.
Oct. 31, 2013) (citing Tenneco Auto. Inc., 2007 WL 92621, at *5).
118
TAC ¶ 193.
119
Brinckerhoff V, 159 A.3d at 255.
120
Id. at 256–57.
121
See Brinckerhoff I, 2011 WL 4599654, at *8.
32
“the definition of bad faith that is . . . incorporated into the Enbridge LPA.”122 The
contractual fiduciary duty stated in Section 6.6(e) supplants any residual fiduciary
duties that Enbridge and the Director Defendants might otherwise have owed to EEP
in connection with the Transaction. Thus, Count IV must be dismissed.
G. The Claim for Aiding and Abetting Against Simmons Survives Dismissal
Having concluded that the LPA sets forth “contractual fiduciary duties,” and
that the TAC states a claim that EEP GP and Enbridge Management breached those
duties, the Court must now determine whether the TAC pleads that Simmons aided
and abetted those breaches (as alleged in Count VII) under a reasonably conceivable
standard. According to Plaintiff, Simmons knowingly aided and abetted the breach
by delivering a fairness opinion that inexplicably failed to consider the comparable
2009 transaction (where EEP sold the AC Interest to EEP GP) and failed to account
for the fact that all other available valuation metrics revealed that EEP was paying
too much.123 The first complaint did not assert an aiding and abetting claim against
Simmons, so the Supreme Court did not address that claim in Brinckerhoff V.
Under Delaware law, in order to state a claim for aiding and abetting a breach
of fiduciary duty, a plaintiff must allege: (1) the existence of a fiduciary relationship;
122
Brinckerhoff V, 159 A.3d at 252.
123
TAC ¶ 160.
33
(2) a breach of that relationship; (3) “knowing participation” by the defendant non-
fiduciary in the fiduciary’s breach; and (4) damages proximately caused by the
breach.124 Here, as is often the case, the viability of Plaintiff’s aiding and abetting
claim as to Simmons turns on whether the TAC adequately pleads that Simmons
“knowingly participated” in EEP GP’s and Enbridge Management’s breaches of the
LPA’s contractual fiduciary duties.
In Malpiede v. Townson, our Supreme Court held that “[k]nowing
participation in a board’s fiduciary breach requires that the third party act with the
knowledge that the conduct advocated or assisted constitutes such a breach.”125
Stated differently, “[i]f the third party knows that the board is breaching its duty . . .
and participates in the breach by misleading the board or creating the informational
vacuum, then the third party can be liable for aiding and abetting.”126 This standard
requires well-pled facts that the alleged aider and abettor acted with “scienter,”127
124
See Malpiede v. Townson, 780 A.2d 1075, 1096 (Del. 2001); RBC Capital Mkts., LLC
v. Jervis, 129 A.3d 816, 861 (Del. 2015) (affirming decision after trial finding investment
bank liable for aiding and abetting breaches of fiduciary duty).
125
Malpiede, 780 A.2d at 1097 (citations omitted); RBC Capital Mkts., LLC, 129 A.3d at
861–62.
In re Rural Metro Corp. S’holders Litig., 88 A.3d 54, 97 (Del. Ch. 2014), aff’d, RBC
126
Capital Mkts., LLC, 129 A.3d 816.
127
See Singh v. Attenborough, 137 A.3d 151, 152 (Del. 2016).
34
meaning with “an illicit state of mind.”128 That is, the complaint must plead facts
that allow a reasonable inference that the aider and abettor acted knowingly,
intentionally or with reckless indifference.129 The scienter pleading requirement is
among the most difficult in our law to satisfy.130
According to Simmons, Plaintiff’s aiding and abetting claim against it rests
entirely on a recitation of the reasons why Plaintiff believes Simmons’ fairness
opinion is wrong, not on any well-pled facts that would support a reasonable
inference of scienter.131 I disagree.
By letter dated September 16, 2014, Enbridge proposed that EEP repurchase
the AC Interest for $915 million.132 Enbridge based this first offer on projected 2015
128
RBC Capital Mkts., LLC, 129 A.3d at 862.
129
Id. See also id. (“To establish scienter, the plaintiff must demonstrate that the aider and
abettor had ‘actual or constructive knowledge that [its] conduct was legally improper.’”)
(citing Wood v. Baum, 953 A.2d 136, 141 (Del. 2008)).
130
Id. at 866. See, e.g., Malpiede, 780 A.2d at 1097–98 (finding “that the plaintiffs’ aiding
and abetting claim fails as a matter of law because the allegations in the complaint do not
support an inference that [the alleged aider and abettor] knowingly participated in a
fiduciary breach”); Lee v. Pincus, 2014 WL 6066108, at *13 (Del. Ch. Nov. 14, 2014)
(noting that “[k]nowing participation has been described as a ‘stringent’ standard that
‘turn[s] on proof of scienter’”) (citing Allied Capital Corp. v. GC-Sun Hldgs., L.P.,
910 A.2d 1020, 1039 (Del. Ch. 2006)); Morgan v. Cash, 2010 WL 2803746, at *4–5
(Del. Ch. July 16, 2010) (granting a motion to dismiss upon concluding that knowing
participation was not well-pled).
131
Def. Piper Jaffray & Co.’s Mot. to Dismiss 45.
132
TAC ¶ 63; Enbridge Defs.’ Opening Br. Ex. 4 (D.I. 191).
35
EBITDA for the AC Interest of $83.3 million and an 11x EBITDA multiple.133
Simmons was retained by Enbridge Management and EEP on October 8, 2014, to
provide “an opinion as to whether or not the Transaction [was] fair to Partners and
the unitholders of Partners.”134 Simmons performed this service in exchange for a
fee of $600,000—$100,000 as an initial advisory fee and $500,000 payable upon
delivery of the fairness opinion, plus expenses.135 This was to be the fourth fairness
opinion Simmons would provide to Enbridge Management within a span of nineteen
months.136
On November 23, 2014, EEP GP increased the offer to $1.025 billion based
on a revised projected 2015 EBITDA for the AC Interest of $93.2 million and an
11x EBITDA multiple.137 A month later, on December 23, 2014, Simmons delivered
its fairness opinion at this price by letter addressed to Enbridge Management, later
133
TAC ¶ 131(b) (Plaintiff alleges that Enbridge executives, EEP GP and Enbridge
Management “manipulat[ed] projected 2015 EBITDA to justify an $85 million increase in
the purchase price even though the changes to 2015 EBITDA consisted largely of one-time
items that involved shifting costs between years rather than an increase in the earnings
power of the AC Interest. . . .”).
134
Def. Piper Jaffray & Co.’s Opening Br. Ex. 1 (D.I. 192); TAC ¶ 66.
135
Id.136
TAC ¶¶ 27, 66. Plaintiff avers that on three previous occasions Simmons
“rubberstamped” Enbridge Management conflict transactions. TAC ¶ 251. See also Def.
Piper Jaffray & Co.’s Opening Br. Ex. 2.
137
Enbridge Defs.’ Opening Br. Ex. 3.
36
supported by a presentation to Enbridge Management acting on behalf of EEP GP.138
Plaintiff alleges that, in reaching its fairness opinion, Simmons: (1) “reviewed and
analyzed” the LPA139; (2) used an “implied transaction value to EBITDA multiple
of 10.7x” and a valuation that “had been pre-announced via press-release”140;
(3) used only the revenue, operating expense and maintenance capital expenditure
estimates provided by the seller (EEP GP)141; (4) did not incorporate valuation
constraints or declining prospects typically associated with cost-of-service models
into its analysis142; (5) knew of the September 12, 2014 memo given to EEP GP’s
Special Committee explaining the AC Interest’s $478 million valuation based on an
8.5% cost of equity, which, due to EEP’s higher cost of equity, implies an even lower
discounted cash flow value for the AC Interest143; (6) did not consider the 2009 sale
of the AC Interest from EEP to EEP GP, by far the most relevant comparable
transaction144; (7) performed no valuation of the Class E preferred units and
138
TAC Ex. B (“Simmons Presentation”); Def. Piper Jaffray & Co.’s Opening Br. Ex. 2.
139
Simmons Presentation 36.
140
Simmons Presentation 2, 37.
141
Simmons Presentation 27.
142
TAC ¶¶ 12, 27.
143
TAC ¶ 26(b).
TAC ¶¶ 9, 27. See also LPA, § 6.9(c) (“Whenever a particular transaction . . . is required
144
under this Agreement to be “fair and reasonable” to any Person, the fair and reasonable
37
inexplicably assigned Class E preferred units the same value as Class A common
units, despite their considerable tax benefit and liquidation preference145; and then
(8) inexplicably concluded that the Transaction to (a) sell the AC Interest to EEP for
$1.0 billion, and (b) allocate all of EEP GP’s $410 million taxable gain on the sale
to EEP unitholders was “fair to Partners and to the holders of Partners’ common
units. . . .”146
Simmons’ response to these allegations is to invoke In re Rural Metro
Stockholders Litigation as the litmus test for financial advisor aiding and abetting
and to argue that its conduct does not come close to the conflict-driven misconduct
at issue there.147 To be sure, the allegations against Simmons in the TAC do not
implicate the kind of transactional conflicts (where the banker derived benefits from
both the buy and sell sides) that led to the court’s verdict against RBC in In re Rural
nature of such transaction . . . shall be considered in the context of all similar or related
transactions.”). See RBC Capital Mkts., LLC, 129 A.3d at 842 (finding the advisor had
modified its precedent transaction analysis to reach a desired conclusion).
145
Pl.’s Answering Br. to Def. Piper Jaffray & Co.’s Mot. to Dismiss 19. Enbridge and
EEP GP hired Ernst & Young LLP (“E&Y”) to complete a “draft analysis” of the Class E
units. The E&Y draft analysis was completed on February 15, 2015. With respect to the
Class E units, E&Y estimated the present value of the: Special Tax Allocation to be $12.17
per Class E unit, Liquidation Preference to be $4.66 per Class E unit and total fair value to
be $53.39 per Class E unit, as of the Transaction date. TAC ¶¶ 18, 21, 108. For whatever
reason, Simmons elected not to undertake this Class E valuation analysis. Id.
146
Simmons Presentation 2, 33, 37.
147
Def. Piper Jaffray & Co.’s Opening Br. 2; In re Rural Metro, 88 A.3d 54.
38
Metro. But that does not mean the allegations of aiding and abetting here are not
well-pled.
Plaintiff has alleged that Simmons, a financial advisor very familiar with the
energy industry, used a manipulated valuation to support a fairness opinion that not
only failed to reconcile, but also completely ignored, a comparable transaction
involving a sale of the same asset five years prior.148 Simmons did not account for,
and did not prompt the Special Committee to account for, the additional
consideration that would flow to EEP GP through the Special Tax Allocation,149 nor
was the Special Committee able to discern the value of a Class E preferred unit from
Simmons’ work.150 Indeed, it is alleged that Simmons created an “informational
vacuum” with regard to Class E unit value that made assessing value difficult if not
impossible.151 The TAC also well-pleads that Simmons was content to base its
fairness opinion on EEP GP’s “fully baked,” “last-minute manipulations of 2015
148
See RBC Capital Mkts., LLC, 129 A.3d at 865 n.191 (“The banker is under an obligation
not to act in a manner that is contrary to the interests of the board of directors, thereby
undermining the very advice that it knows the directors will be relying upon in their
decision making processes.”).
149
TAC ¶ 155(f).
150
TAC ¶ 22.
151
Id. Plaintiff alleges that “[n]either the Special Committee nor Simmons performed any
valuation of the Class E Units, the Special Tax Allocation, or the Liquidation Preference.”
39
projected EBITDA,” again creating informational gaps that ultimately aided and
abetted EEP GP and Enbridge Management in their breaches of the LPA’s
contractual fiduciary duties.152 Finally, the TAC alleges that Simmons was willing
to perform its perfunctory valuation, as it had in the past, in order to preserve its
longstanding relationship with Enbridge, knowing well that EEP GP and Enbridge
would invoke the fairness opinion as a means to escape liability for breach of
fiduciary duty following the closing of the Transaction.153
This court most typically dismisses claims for aiding and abetting against
financial advisors when the complaint fails to allege facts from which it may
reasonably be inferred that directors were relying upon the financial advisor to
152
See Singh, 137 A.3d at 152 (“[A]n advisor whose bad-faith actions cause its board
clients to breach their situational fiduciary duties . . . is liable for aiding and abetting.”);
RBC Capital Mkts., LLC, 129 A.3d at 842 (finding the advisor had inexplicably modified
its precedent transaction analysis). See also Brinckerhoff V, 159 A.3d at 261 (holding that
EEP GP is not entitled to Section 6.10(b)’s conclusive presumption of good faith because
Plaintiff had well pled that EEP GP “could not have reasonably relied on” the Simmons
fairness opinion due to its use of the “fully baked” financial terms and failure to consider
the most relevant precedent transaction—the 2009 Alberta Clipper transaction—when it
was acting under a standard that expressly required consideration “of all similar or related
transactions.”). The fact that the Supreme Court determined that EEP GP could not rely
on the Simmons fairness opinion as a basis to invoke the financial advisor “safe harbor”
(at the pleadings stage) cannot be ignored as the Court considers whether it is reasonably
conceivable that Simmons’ fairness opinion did not reflect its objective view of the fairness
of the Transaction.
153
TAC ¶¶ 27, 117. Simmons analyzed the LPA, which includes LPA § 6.10(b)’s
conclusive presumption of good faith when EEP GP relies in good faith on an advisor’s
opinion. See Simmons Presentation 36.
40
provide information that the board did not already know154 or that the advisor knew
the board was breaching its fiduciary duties.155 These are difficult facts to muster at
the pleadings stage; yet it is appropriate to put the plaintiff to that burden before
requiring an advisor to the board to defend its advice as an aider and abettor in
litigation.156 Even so, the burden is not insurmountable.157 Drawing all reasonable
inferences in Plaintiff’s favor, as I must,158 I am satisfied that Plaintiff has stated a
viable claim for aiding and abetting a breach of fiduciary duty against Simmons.159
The motion to dismiss Count VII, therefore, must be denied.
154
See, e.g., Buttonwood Tree Values P’rs, L.P. v. R.L. Polk & Co., Inc., 2017
WL 3172722, at *10 (Del. Ch. July 24, 2017) (dismissing aiding and abetting claim against
an advisor to the board when it was clear from the complaint and properly considered
documents that what plaintiff alleged the advisor had failed to communicate was already
known to the board).
155
See Singh, 137 A.3d at 152; Nebenzahah v. Miller, 1996 WL 494913, at *7 (Del. Ch.
Aug. 29, 1996) (holding that a court can infer a non-fiduciary’s knowing participation if a
fiduciary breaches its duties in an “inherently wrongful manner,” but dismissing the aiding
and abetting claim because plaintiffs did not allege such facts).
156
See Singh, 137 A.3d at 152.
157
See In re Shoe-Town S’holders Litig., 1990 WL 13475, at *8 (Del. Ch. Feb. 12, 1990)
(recognizing difficult pleading burden but declining to dismiss aiding and abetting claim
against financial advisor upon concluding that the complaint adequately alleged that the
financial advisor was “closely involved with the management group” on the other side of
the transaction at issue and had performed a result-driven analysis).
158
Gen. Motors S’holder Litig., 897 A.2d at 169.
159
To hold that Plaintiff has adequately pled an aiding and abetting claim against Simmons
is a far cry from predicting that Plaintiff will prevail in the Herculean task of supporting
the pled facts in discovery or proving them at trial. See In re Rural Metro, 88 A.3d at 100
41
H. The Tortious Interference with Contract Claim Against Simmons Is
Dismissed
Count VIII asserts tortious interference with contract against Simmons. The
claim was not pled in the first complaint so the Supreme Court had no occasion to
address it in Brinckerhoff V.
To maintain a claim for tortious interference under Delaware law, a plaintiff
must prove: (1) a contract; (2) about which defendants knew; and (3) an intentional
and improper act that is a significant factor in causing the breach of such contract
(4) without justification (5) which causes injury.160 There is no dispute that the LPA
was a contract about which Simmons knew. The viability of Plaintiff’s tortious
interference claim against Simmons, therefore, will depend on whether Plaintiff has
well-pled an “intentional and improper” act of interference undertaken “without
justification.”
Delaware is a Restatement (Second) of Torts jurisdiction.161 When
considering whether an action is improper or taken without justification such that it
(noting the difficulty in proving that a financial advisor was incented to knowingly aid in
a breach of fiduciary duty) (internal citations and quotation marks omitted); In re El Paso
Corp. S’holder Litig., 41 A.3d 432, 448 (Del. Ch. 2012) (observing that “it is difficult to
prove an aiding and abetting claim”) (citations omitted).
160
Irwin & Leighton, Inc. v. W.M. Martin Co., 532 A.2d 983, 992 (Del. Ch. 1987)
(Allen, C.); AM Gen. Hldgs. LLC, 2013 WL 5863010, at *12.
161
ASDI, Inc. v. Beard Research, Inc., 11 A.3d 749, 751 (Del. 2010).
42
can constitute tortious interference, Delaware courts look to the general factors set
forth in Section 767 of the Restatement (Second) of Torts, including (a) the nature
of the actor’s conduct; (b) the actor’s motive; (c) the interests sought to be advanced
by the actor; and (d) the proximity or remoteness of the actor’s conduct to the
interference.162 With respect to motive, the Restatement directs an inquiry into
“whether the purpose of a defendant’s conduct was motivated by a desire to interfere
with the contract.”163 “Only if the defendant’s sole motive was to interfere with the
contract will this factor support a finding of improper interference.”164
Restatement (Second) of Torts § 772 further refines the tortious interference
analysis here by its codification of a so-called “advisor’s privilege” that allows an
advisor, under certain circumstances, to provide counsel to his client without fear
that the advice will give rise to a tortious interference claim. 165 This section “has
162
See RESTATEMENT (SECOND) OF TORTS, § 767 (1979); see, e.g., WaveDivision Hldgs.,
LLC v. Highland Capital Mgmt., L.P., 49 A.3d 1168, 1174 (Del. 2012) (applying
Section 767 factors).
163
WaveDivision Hldgs., LLC v. Highland Capital Mgmt. L.P., 2011 WL 5314507, at *12
(Del. Super. Ct. Oct. 31, 2011), as revised Nov. 2, 2011, aff’d, 49 A.3d 1168 (Del. 2012).
164
WaveDivision Hldgs., LLC, 49 A.3d at 1174 (emphasis in original).
165
RESTATEMENT (SECOND) OF TORTS, § 772(b) (1979) (“[o]ne who intentionally causes
a third person not to perform a contract . . . with another does not interfere improperly with
the other’s contractual relation, by giving the third person . . . (b) honest advice within the
scope of a request for the advice.”).
43
been applied to a financial advisor who is thus privileged to interfere with or induce
breach of the principal’s contracts . . . with third parties, so long as the agent’s acts
are within the scope of his employment and taken with intent to further the best
interests of the principal.”166
Finally, Restatement (Second) of Torts § 767, cmt. i offers additional
guidance.167 Specifically, the comment recognizes the special relationship that
exists between advisor and client and suggests that the advisor should not face tort
liability for his client’s breach of contract unless the advisor counseled the client in
bad faith to breach.168 This makes perfect sense, of course, given that the advisor’s
obligations to serve the best interests of the client, at times, may require the advisor
to counsel the client to act in a manner that ultimately results in a breach of the
client’s contract with another. To hold the advisor liable for providing advice that
he is justified in providing to the client within the scope of the advisor/client
engagement would eviscerate the fourth prima facie element of tortious interference
166
5 J.D. LEE & BARRY A. LINDAHL, MODERN TORT LAW: LIABILITY AND LITIGATION
§ 45:9 (ed. 2008).
167
See RESTATEMENT (SECOND) OF TORTS § 767, cmt. i (“[I]t is proper for [an advisor] to
advise [the contracting party], in good faith and within the scope of [the contracting party]’s
request for advice, that it would be to his financial advantage to break his contract. . . .”).
168
Id.
44
with contract.169 To avoid that result, and to avoid unnecessary and unwieldy
explorations into the causally related consequences of an advisor’s counsel to his
client, it is proper to require that the plaintiff plead and prove that the advisor actually
counseled the client, in bad faith, to breach the contract as a predicate to tortious
interference with contract liability.
Here, Plaintiff alleges only that Simmons opined as to the fairness of the
Transaction. While I have concluded it is reasonably conceivable, under the unique
facts pled in the TAC, that this conduct aided and abetted EEP GP’s breach of
contractual fiduciary duties,170 the TAC stops short of alleging that: (1) Simmons’
sole motivation in providing its fairness opinion was to interfere with the LPA; (2)
Simmons intentionally acted against the best interests of its client; or (3) Simmons
actually counseled EEP GP to breach. Accordingly, Piper Jaffray & Co.’s motion
to dismiss Count VIII must be granted.
I. Remedies
The Supreme Court has determined that, in connection with Section 6.8(a),
“Brinckerhoff has pled viable claims that the defendants acted in bad faith when
169
Irwin & Leighton, Inc., 532 A.2d at 992 (plaintiff must prove that the interference was
without justification).
170
To reiterate, there would be no aiding and abetting claim if the LPA did not impose
contractual fiduciary duties upon the Enbridge defendants. Gotham P’rs, LP, 817 A.2d at
172.
45
undertaking the [Transaction].”171 The well-pled facts in the first complaint upon
which the Supreme Court rested its decision remain in the TAC and, contrary to
Defendants’ suggestion, they are not somehow “unpled” by the additional facts pled
in the TAC.172 Nor are Defendants entitled to the presumption of good faith to avoid
a damages remedy by relying on Simmons’ fairness opinion. As already noted,
Brinckerhoff V held,
For several reasons, EEP GP has fallen short of making a dispositive,
pleading-stage showing that it is entitled to invoke the conclusive
presumption of good faith. By its own terms, Section 6.10(b) requires
that EEP GP “reasonably believe” that Simmons was professionally
equipped to opine on the fairness and reasonableness of the Alberta
Clipper transaction in a manner consistent with the requirements of
Section 6.6(e). In this case, whether EEP GP could have reasonably
believed Simmons was an appropriate advisor depends on the factual
record developed through discovery. For present purposes, we must
accept as true Brinckerhoff’s allegation that EEP GP could not have
reasonably relied on a banker that did not consider what Brinckerhoff
has alleged to be the most relevant precedent transaction when it was
acting under a standard that expressly required consideration of
comparable transactions—the 2009 Alberta Clipper transaction.173
171
Brinckerhoff V, 159 A.3d at 255. See also id. at 258 (“Having established that
Brinckerhoff has pled a viable claim for breach of Section 6.6(e) . . . [i]f a breach is
eventually found, then under Section 6.8(a), EEP GP is exculpated from monetary damages
if it acts in good faith. . . . We find that Brinckerhoff has pled facts supporting an inference
that EEP GP acted in bad faith in approving the [Transaction].”).
172
Brinckerhoff V, 159 A.3d at 260; TAC ¶¶ 7–9, 19, 25(a)–(c), 160.
173
Brinckerhoff V, 159 A.3d at 261.
46
As noted, even if EEP GP ultimately is found to have acted in good faith such
that it is not liable for monetary damages under the LPA, the Supreme Court has
made clear that the LPA does not “limit equitable remedies.”174 “Once liability has
been found, and the court’s powers shift to the appropriate remedy, the Court of
Chancery has broad discretion to craft a remedy to address the wrong.”175 At this
stage, I cannot rule out damages, rescission or reformation as possible remedies.176
Defendants’ motion to dismiss Count VI, therefore, must be denied.
III. CONCLUSION
For the foregoing reasons, Defendants’ motions to dismiss are GRANTED in
part and DENIED in part. Discovery shall proceed on the following surviving
claims: Count I – Derivative Breach of Contract claims against EEP GP, Enbridge
Management (and, if amended, against Enbridge and the Director Defendants);
Count VI – Equitable Remedies; and Count VII – Aiding and Abetting Breach of
174
Id. at 262.
175
Id. Notably, TAC Count VI substantially mirrors Count VIII in the first complaint,
which pled reformation or rescission. Compare TAC ¶¶ 201–06, with First Compl. ¶¶ 169–
76.
176
See, e.g., In re Loral Space and Commc’ns Inc., 2008 WL 4292781, at *33 n.161
(Del. Ch. Sept. 19, 2008) (“[T]his court has broad discretion to remedy breaches of
fiduciary duty, including reformation when . . . appropriate to remedy a fiduciary
violation.”).
47
Contractual Fiduciary Duties against Simmons. The balance of the claims in the
TAC are dismissed.
IT IS SO ORDERED.
48