Loews Must Face Suit Alleging Pipeline Stock Option Gamesmanship

Loews Corp. must face a lawsuit claiming it intentionally tanked the price of a partial subsidiary so it could buy the pipeline operator out on the cheap, a Delaware judge ruled Oct. 7.

The investor suit challenges the exercise of call options by Loews, which acts as the general partner of Boardwalk Pipeline Partners LP through a series of subsidiaries. The Loews entities could exercise the options if they received legal advice that their pass-through tax status would negatively affect pipeline rates, according to the Chancery Court ruling. The price would be the average trading value in the six months ...