Judge OKs Santa Fe’s Settlement of Suits

Santa Fe Pacific Pipeline Partners LP won a judge’s approval of a settlement of shareholder lawsuits spawned by Kinder Morgan Energy Partners’ planned $1.49-billion purchase of Santa Fe.

Houston-based Kinder Morgan Energy last year offered cash, stock and assumed debt equaling $55.34 per partnership unit for Orange-based Santa Fe, a shipper of fuel and owner of pipelines in six states.

Santa Fe unit holders quickly filed four suits in Delaware and California state courts arguing they weren’t getting enough for their stakes in the pipeline partnership.

Investors agreed to drop their suits in Delaware Chancery Court in Wilmington in return for more details about the financial performance of both companies and about how a fairness review of the purchase was conducted, court records show.

Chancery Court Judge Jack Jacobs found the disclosure settlement was “fair and reasonable” before giving it final approval Tuesday.

Jacobs’ decision means the end of all litigation against Santa Fe and Kinder Morgan over the acquisition. Investors in Orange County Superior Court have agreed to drop their suits in return for being covered by the Delaware settlement.

Kinder Morgan and Santa Fe officials weren’t available for comment on the judge’s decision today.

The judge also approved a total of $325,000 in legal fees and costs to compensate unit holders’ lawyers for bringing the case. Those lawyers had asked for $25,000 more in fees than the judge approved.

Kinder Morgan’s partnership shares, which are traded publicly on the New York Stock Exchange, rose 19 cents, to $36.38.