A subsidiary of Kansas-based Koch Industries Inc. has to pay a division of BP $5 million as part of an agreement to purchase a pipeline company for $295 million in 2002 under an appeals court ruling.
A three-judge panel of the 11th U.S. Circuit Court of Appeals on Wednesday overturned a ruling by a lower court that said Koch Business Holdings did not have to pay the $5 million.
Amoco Pipeline Holding Co. and Koch each owned shares of Alpharetta, Ga.-based Colonial Pipeline Co., which transports petroleum products from the Gulf Coast through the Southeast.
Amoco decided to sell its Colonial shares, which represented almost 18 percent of the pipeline company, according to court documents. Another company, Buckeye Partners LP, which had no interest in Colonial, agreed to pay $295 million for Amoco's shares, plus another $5 million upon certain specified conditions involving a settlement with the federal government concerning a 1996 spill near the Reedy River in South Carolina.
After that deal fell through, Koch exercised its right of first refusal to buy Amoco's shares under the same terms and conditions as those with Buckeye.
On Dec. 16, 2002, Koch paid the $295 million and Amoco transferred its shares to Koch, which claimed after the closing that a crucial condition pertaining to the spill settlement had not been met.
The appellate panel found that the condition was met, "and Koch is liable for the $5 million post-closing payment."
via yahoo
A three-judge panel of the 11th U.S. Circuit Court of Appeals on Wednesday overturned a ruling by a lower court that said Koch Business Holdings did not have to pay the $5 million.
Amoco Pipeline Holding Co. and Koch each owned shares of Alpharetta, Ga.-based Colonial Pipeline Co., which transports petroleum products from the Gulf Coast through the Southeast.
Amoco decided to sell its Colonial shares, which represented almost 18 percent of the pipeline company, according to court documents. Another company, Buckeye Partners LP, which had no interest in Colonial, agreed to pay $295 million for Amoco's shares, plus another $5 million upon certain specified conditions involving a settlement with the federal government concerning a 1996 spill near the Reedy River in South Carolina.
After that deal fell through, Koch exercised its right of first refusal to buy Amoco's shares under the same terms and conditions as those with Buckeye.
On Dec. 16, 2002, Koch paid the $295 million and Amoco transferred its shares to Koch, which claimed after the closing that a crucial condition pertaining to the spill settlement had not been met.
The appellate panel found that the condition was met, "and Koch is liable for the $5 million post-closing payment."
via yahoo
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