By: Kami DeLorenzo
I. Introduction
Following the rationale first charted in In re Mindbody, Inc. Shareholder Litigation., Delaware’s Supreme Court reversed the Court of Chancery’s holding that constructive knowledge was sufficient to render a buyer liable in a self-side breach of fiduciary duty claim.1 The Court’s holding is indicative of its willingness to encourage arm’s length dealings in merger and acquisition negotiations.2 Columbia recognizes the simple fact that a buyer often lacks complete visibility into the acquisition’s inner-workings and thus, should not be held liable unless there is strong evidence of knowing misconduct.3
II. The Players
The facts of Columbia surround high-ranking Columbia officers, described by the Court of Chancery as “aging executives” nearing retirement, as well as a high-ranking officer of the buyer, TransCanada.4 Columbia Pipeline Group, Inc., was a wholly owned subsidiary of NiSource, Inc.5 Robert Skaggs Jr. served as NiSource’s CEO and chair of the board of directors.6 Stephen Smith was NiSource’s CFO.7 The last Columbia player, Glenn Kettering, was Columbia’s business unit’s CEO.8 All three officers held lucrative change-in-control agreements with NiSource under which a sale of the company would trigger the vesting of their unvested equity.9 However, the agreement did not trigger a change-in-control with the sale of Columbia.10 Armed with this knowledge, Skaggs recommended that Columbia be spun off from NiSource and sold as a separate entity, which would trigger their change-in-control agreements. 11 Upon the spinoff of Columbia, Skaggs, along with six independent outside directors, were appointed to Columbia’s board.12
TransCanada’s Senior Vice President for Strategy and Corporate Development, François Poirier, took the lead in negotiations for TransCanada.13 Poirier and Smith had former dealings dating back to 1999, unrelated to this litigation.14
III. The Sale
Skaggs had already been contacted by two potential buyers when Smith, who did not sit on the board for Columbia, was contacted by Poirier for TransCanada.15 Poirier and Smith participated in negotiations and eventually, without notice to the board, Smith executed an NDA with TransCanada for the purpose of providing TransCanada with nonpublic information.16 The NDA included a Standstill provision which limited competitive pressure by not releasing other bidders.17 This gave TransCanada a negotiation advantage, but more importantly for Smith, Skaggs and Kettering, pushed negotiations along.18 However, during this time, Poirier and Smith continued to engage in communications the Court of Chancery deemed violative of the Standstill’s prohibitions, including an in-person meeting.19 Poirier used his relationship with Smith to obtain information about the possibility of future discussions concerning the sale of Columbia.20 Armed with this information, TransCanada was able to strong-arm Columbia into an agreement, threatening to issue a press release indicating that the acquisition discussions with Columbia had been terminated if Columbia did not accept TransCanada’s offer.21 The merger’s closing price was $25.50 per share, which enabled Skaggs, Smith, and Kettering to receive substantially more than they would have absent a change-in-control transaction–$17.9 million more for Skaggs, $10.89 million more for Smith and $5.58 million more for Kettering.22
IV. The Aftermath
A Columbia stockholder sued Skaggs, Smith and TransCanada, alleging a breach of fiduciary duty in structuring and/or timing the sale in part so that they would receive large change-in-control benefits.23 Skaggs and Smith settled with Plaintiff stockholders, leaving only TransCanada to defend themselves against claims of aiding and abetting.24 The Court of Chancery found TransCanada liable for aiding and abetting based on TransCanada’s constructive knowledge of and culpable participation in Skaggs’s and Smith’s fiduciary-duty breaches.25
V. The Supreme Court’s Rationale
The Court did not consider TransCanada’s violation of the Standstill prohibition to be evidence of its culpable participation in Columbia’s breaches.26 This is because the necessary analysis is not whether TransCanada knew it was breaching the Standstill, but whether TransCanada knew it was substantially assisting the Columbia negotiators in the breach of their fiduciary duties.27 Here, the Court cited to a lack of evidence that TransCanada knew Columbia’s officers were breaching fiduciary duties.28 “Substantial assistance” requires something more than the passive observation of the seller’s eagerness to strike a deal or its negotiators’ want of bargaining acumen.29
The Court’s holding narrows buyer liability in aiding-and-abetting claims and encourages arm’s length dealing in mergers and acquisitions. In fact, the Supreme Court acknowledged that “the dynamic of arm’s-length negotiations, in which both sides are striving for the most favorable price, should render such claims ‘the most difficult to prove.’”30 Aggressive tactics, such as those employed by Poirier for TransCanada, do not constitute aiding and abetting unless it can be shown that the buyer “knowingly participated” in the breach.31 The decision in Columbia is important for buyers and plaintiff-stockholders. Plaintiff-stockholders should know that they will have a rather hefty burden in bringing a successful aiding-and-abetting claim against buyers; meanwhile, buyers can be assured that aggressive negotiation tactics will not suffice to trigger liability for aiding-and-abetting claims.
About the Author
Kami is a third-year law student at Widener University Delaware Law School and serves as an Articles Editor for Volume 51 of the Delaware Journal of Corporate Law. Kami was published in Volume 50 of the Journal, for her comparative analysis of the exclusivity provision of Workers’ Compensation Acts in Delaware, Pennsylvania and New Jersey.
Kami graduated from Rutgers University in 2023, earning her bachelor’s degree, summa cum laude, with a major in criminal justice and minor in political science. While in law school, Kami works at Fritz & Bianculli, LLC, in Philadelphia, as a law clerk. After law school, Kami plans to take the Pennsylvania bar exam.
1 In re Columbia Pipeline Group, Inc. Merger Litig. (Columbia), 342 A.3d 324 (Del. 2025); In re Mindbody, Inc. S’holder Litig., 332 A.3d 349 (Del. 2024).
2 Columbia, 342 A.3d at 360.
3 Tyler O’Connell, Delaware Supreme Court Reverses Aiding and Abetting Judgment Against M&A Acquirer for Lack of Knowing Participation in the Breaches, (June 30, 2025), https://www.americanbar.org/groups/business_law/resources/business-law-today/2025-june/june-2025-brief-business-litigation-dispute-resolution/.
4 Columbia, 342 A.3d at 329.
5 Id.
6 Id.
7 Id.
8 Columbia, 342 A.3d at 329.
9 Id.
10 Id. at 329–30.
11 Id. at 330.
12 Columbia, 342 A.3d at 330.
13 Id. at 330–31.
14 Id. at 331.
15 Id. at 331.
16 Columbia, 342 A.3d at 333.
17 Id. Columbia negotiated NDAs with standstill provisions to two other potential buyers, meaning these other potential buyers could not submit a bid unless they were released by Columbia. Id. at 333.
18 Id. at 352.
19 Id. at 335–39.
20 Columbia, 342 A.3d at 332.
21 Id. at 348.
22 Id. at 351.
23 Id. at 351. Another Columbia stockholder filed an almost identical claim which was consolidated into this litigation. Id. at 351.
24 Columbia, 342 A.3d at 351-52.
25 Id. at 352.
26 Id. at 361.
27 Id. at 362.
28 Columbia, 342 A.3d at 369–70.
29 Id. at 360.
30 Id. (quoting Malpiede v. Townson, 780 A.2d 1075, 1097 (Del. 2001)).
31 Id. at 361.
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