We represented Kinder Morgan, Inc. (“Kinder Morgan”) and Utica Marcellus Texas Pipeline, LCC (“UMTP”), a Kinder Morgan subsidiary, in a case brought by American Ethane Company, LLC (“AEC”) arising out of a 2014 Term Sheet between UMTP and AEC. In May of 2014, AEC was a start-up company funded by Russian billionaires, including Roman Abramovich, Alexander Abramov, and others. AEC was seeking to develop a source of ethane for export to foreign markets, and therefore approached UMTP and urged it to continue preliminary development of a potential pipeline that could have been a source of ethane for AEC. However, UMTP had previously determined that shipper interest in the pipeline project was limited, and was therefore considering suspending its development work in 2014.
Under the 2014 Term Sheet, UMTP agreed to continue preliminary development of the pipeline project for a three-month period if AEC would agree to split the $13.8 million budgeted development costs during that period. During that same period, the parties agreed to negotiate the possibility of AEC subscribing for capacity on the pipeline. Ultimately, AEC was unable to provide sufficient credit support to satisfy UMTP as to its creditworthiness. As a result, UMTP terminated negotiations under the Term Sheet in September 2014. The pipeline project was never built. In March 2020, AEC sued Kinder Morgan and UMTP, alleging that it was entitled to reimbursement of the $6.9 million it paid to UMTP under the Term Sheet. In addition to its breach of contract claim, AEC also asserted claims for fraud/fraud in the inducement, exemplary damages, and equitable theories of quantum meruit, unjust enrichment, and promissory estoppel. AEC also sought its attorneys’ fees. In total, AEC sought damages in excess of $20 million.
The case was tried to a jury beginning on May 1, 2025. After the Plaintiff rested, the Court granted our clients’ motion for directed verdict on AEC’s equitable claims. On May 12, 2025, the jury returned a complete defense verdict, rejecting AEC’s breach of contract and fraud claims.
