Sign in Subscribe
Petroleum industry

Billion-Dollar Lawsuit: TransAmerican Natural Gas vs. Coastal, El Paso Energy, and Burlington Resources

Strategic Insights

— 1 min read

Oil tycoon John R. Stanley, chairman and CEO of TransAmerican Natural Gas, has filed a $7.5 billion lawsuit against natural gas giants Coastal, El Paso Energy, and Burlington Resources, accusing them of a conspiracy to put TransAmerican out of business. The lawsuit, dubbed the "Armageddon suit," alleges fraud, tortious interference, antitrust violations, and conspiracy. This is not the first time these parties have clashed in court, with a history of disputes dating back to the 1980s.

Key Takeaways:

  • The lawsuit, filed by TransAmerican Natural Gas, seeks $7.5 billion in damages from Coastal, El Paso Energy, and Burlington Resources.
  • The defendants are accused of conspiracy, fraud, tortious interference, antitrust violations, and conspiracy in an attempt to take over TransAmerican Natural Gas.
  • The lawsuit stems from an earlier round of litigation between TransAmerican and El Paso over a take-or-pay dispute in 1989, in which TransAmerican was awarded $600 million in damages.
  • TransAmerican has previously sued Coastal and Wyatt for $2 billion each, or $4 billion total, in 1987, with the charges settled out of court in Coastal's favor.
  • Stanley owns 20% of the class B stock in TransTexas Gas and is the chairman and CEO of TransTexas, which emerged from bankruptcy in March.
  • TransAmerican, TransTexas, and predecessor GHR Energy have been in and out of bankruptcy at least three times in the past 20 years.

Statistics:

  • $7.5 billion: The amount TransAmerican Natural Gas is seeking in damages from Coastal, El Paso Energy, and Burlington Resources.
  • $600 million: The amount awarded to TransAmerican Natural Gas in damages in the 1989 take-or-pay dispute suit against El Paso.
  • $300 million: The amount settled between El Paso and TransAmerican Natural Gas in the 1989 take-or-pay dispute suit.
  • 1989: The year of the take-or-pay dispute suit between TransAmerican Natural Gas and El Paso Energy.
  • 1987: The year TransAmerican Natural Gas and Stanley personally sued Coastal and Wyatt for $2 billion each, or $4 billion total.
  • 40%: The percentage of TransAmerican's gas production controlled by Coastal through a 1987 settlement.
  • 4 times: The number of times TransAmerican Natural Gas, TransTexas, and predecessor GHR Energy have been in and out of bankruptcy in the past 20 years.

Sources:

  • Oil Daily, May 5, page 8

Read more