Delaware’s highest court has overturned a previous judge’s order directing Canada’s pipeline operator, TC Energy, to pay $199.2 million in damages stemming from its 2016 acquisition of Columbia Pipeline Group for $13 billion. 

The ruling, delivered on Tuesday, June 17, followed a case filed by Columbia shareholders requesting the court hold TC Energy liable for slashing the takeover share price from $26 to $25.50 per share. 

According to the petitioners, the move enabled former Columbia Chief Financial Officer Stephen Smith and Chief Executive Robert Skaggs to collect huge sums of money from change-of-control payments, popularly known as golden parachutes.

The latest ruling overturns an earlier ruling by Vice Chancellor Travis Laster of the Delaware Chancery Court in May 2024, which awarded the Columbia shareholders the deducted 50 cents per share, totaling $199.2 million.

In its unanimous five-judge panel ruling, the Delaware Supreme Court determined that the standards for such damages’ awards were not met despite a "mountainous trial record." 

"For understandable reasons, that standard was not applied here," Justice Gary Traynor wrote in a 100-page decision.

It cited its earlier ruling on a similar case in December 2024, which required companies such as TC Energy to be liable for aiding a seller's breach of fiduciary duty only if they had prior knowledge of the breach.

"The Court of Chancery did not find that TransCanada had actual knowledge of Skaggs's and Smith's breach of duty of loyalty or that the Columbia board was failing to maintain meaningful oversight of the sale process," Traynor stated.

"Lacking actual knowledge of the sell-side breaches, TransCanada could not have knowingly participated in them."

Before the trial, Skaggs and Smith had agreed to pay $79 million to settle their dispute with Columbia shareholders. However, with the latest ruling, it’s unclear whether or not the two parties would work out a deal outside the court after the final verdict.