The Williams Companies, Inc., Plaintiff Below-Appellant v. Energy Transfer Equity, L.p., Defendants…

Summary

The Supreme Court affirmed the Court of Chancery’s denial of Williams’s request to enjoin termination of the merger agreement. It held that the efforts covenants imposed affirmative obligations to take reasonable steps toward obtaining the required tax opinion and consummating the transaction, and that a proven covenant breach would shift to ETE the burden of showing that the breach did not materially contribute to the failed condition. The judgment nevertheless stood because the unchallenged factual findings established that ETE’s conduct did not materially contribute to counsel’s inability to issue the opinion, and ETE was not equitably estopped from terminating the agreement. Chief Justice Strine, dissenting, would have remanded for a new trial requiring ETE to prove that its conduct did not materially contribute to the failure of the tax-opinion condition.