Legal News

Goldman Denied $20 Million Fee Due to Conflict of Interest
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

In a rare case of an investment bank not being paid advisory fee consequent to litigation, Goldman Sachs was denied a $20 million advisory fee it billed El Paso Corp on its sale to Kinder Morgan. On Friday, Kinder Morgan announced a $110 million settlement with shareholders of El Paso who had sued Kinder Morgan accusing Goldman of being involved with both sides. Kinder Morgan also announced that “El Paso did not pay the $20 million fee or indemnity payments allegedly owed to Goldman.”

Though it is a rare case of being denied fees for advice, Goldman is not new to conflicts of interest related to big deals. Some recent such controversies include the conflicts-of-interests Goldman Sachs had in subprime mortgage investments, Facebook investments, and in its practice of passing analyst’s tips to big clients before others.

For the bench, the path to see mercy for Goldman was strained, as Judge Strine, who was presiding over the matter had in earlier rulings found Goldman’s behavior to be “furtive” and “troubling.” The judge observed, “At this stage, I cannot readily accept the notion that Goldman would not seek to maximize the value of its multibillion-dollar investment in Kinder Morgan at the expense of El Paso, but, at the same time, be so keen on obtaining an investment banking fee in the tens of millions.”

  
What
Where


However, the judge also warned the El Paso shareholders who filed the lawsuit that it would be difficult for them to hold Goldman Sachs liable for its actions. El Paso shareholders claimed that the sale of El Paso to Kinder Morgan was tainted by Goldman’s involvement on both sides. For El Paso, Goldman was the adviser in the deal charging fees, and on the other hand Goldman also had a multibillion-dollar stake in Kinder Morgan. Even the top energy banker of Goldman Sachs had a personal stake of $340,000 in Kinder Morgan.



 

RELEVANT JOBS

Principal, Board Governance Advisor

USA-CA-Newport Beach

 The Principal, Board Governance Advisor is responsible for supporting the Board of Directors o...

Apply now

Attorney

USA-CA-Los Angeles

LA based law firm with multinational practice seeks a Patent Prosecution / IP attorney. 2+ years of ...

Apply now

Paralegal / Legal Assistant I (USAO)

USA-VA-Alexandria

Duties and Responsibilities • provide a variety of direct legal support assistance to the C...

Apply now

Associate Attorney

USA-LA-New Orleans

Greenbaum Breuer and Associates is a high-volume New Orleans, LA based firm that practices exclusive...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Associate Attorney

USA-OR-Portland

Portland office of a BCG Attorney Search Top Ranked Law Firm seeks an associate attorney with 1 year...

Apply Now

Real Estate And Commercial Litigation Attorney

USA-FL-Vero Beach

Vero Beach office of a BCG Attorney Search Top Ranked Law Firm seeks a real estate and commercial li...

Apply Now

Litigation Associate Attorney

USA-CA-San Diego

San Diego office of a BCG Attorney Search Top Ranked Law Firm seeks a litigation associate attorney ...

Apply Now

SEARCH IN ARCHIVE

To Top