Energy Transfer Wins New York Court Ruling in $150 Million Pipeline Fraud Case
(P&GJ) — A New York court has ruled in favor of Energy Transfer, rejecting fraud and breach of contract claims brought by Goldman Sachs and Canadian investors. The plaintiffs had sought $150 million in damages, plus interest, from an affiliate of the Dallas-based energy giant.
During a three-week trial, Goldman Sachs alleged that Energy Transfer misrepresented the status of the Revolution gas pipeline in western Pennsylvania. The claim centered around an August 2017 meeting and several project status notices, which the plaintiffs argued led to losses in a gas production investment.
However, after a 12-day trial before Justice Joel M. Cohen of the New York Supreme Court’s commercial division, the court sided with Energy Transfer. The court found that the company had accurately reported the project’s status and dismissed claims that construction defects and delays led to a pipeline rupture, criminal investigation, and regulatory fines.
Mike Lynn, representing Energy Transfer, emphasized the court's favorable ruling: “This is a great win for Energy Transfer and fully supported by the evidence we were able to present. Goldman overreached in an effort to recover its investment through unsupported allegations.”
The court also rejected the fraud claims, finding Energy Transfer’s witness testimony credible and ruling that the plaintiffs failed to prove any false representation or intent to mislead. Energy Transfer further argued that the plaintiffs’ contract agreements specified their only remedy was to either terminate or withhold funding, not sue for lost investment.
The case, GSCP VI EdgeMarc Holdings LLC v. ETC Northeast Pipeline LLC, was heard in the Supreme Court of New York, New York County, Commercial Division.
Goldman Sachs was represented by Wachtell Lipton Rosen & Katz. Energy Transfer’s legal team was led by Mike Lynn, along with Chris Patton and several other attorneys from the Dallas-based firm Lynn Pinker Hurst & Schwegmann.
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