NEW YORK, Sept 10 Goldman Sachs was not
paid the $20 million fee it billed for advising El Paso Corp on
its more than $20 billion sale to Kinder Morgan Inc
after the investment bank was accused of a conflict of interest
in the sale.
El Paso shareholders sued Kinder Morgan after the deal,
alleging that the sale was tainted by Goldman's involvement with
both energy companies. While it was advising El Paso, Goldman
had a multibillion-dollar stake in the acquirer and its top
energy banker held a $340,000 personal stake in Kinder Morgan.
Kinder Morgan announced a $110 million settlement with the
shareholders on Friday, and said "El Paso did not pay the $20
million fee or any indemnity payments allegedly owed to
The deal closed in May. Delaware Chancery Court Judge Leo
Strine refused to block the deal due to the conflicts, but
criticized the negotiating process.
"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," Strine wrote.
Goldman Sachs declined to comment on the matter.