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UPDATE: Energy Transfer claims Williams CEO privately sabotaged failed merger

In the continuing feud over the breakup fee following their tumultuous 2016 divorce, Energy Transfer LP claimed in a court filing it owes Williams Cos. Inc. nothing because Williams CEO Alan Armstrong tried to secretly undermine the proposed merger and then cover up his actions as the $33 billion deal collapsed.

Energy Transfer claimed in a Feb. 18 filing with the Delaware Court of Chancery that Armstrong used a personal email account and held private meetings to funnel inside information to John Bumgarner, an investor and former Williams senior vice president who was organizing a legal challenge against the merger.

Williams is seeking $410 million in fees it says it is owed because the deal did not go through.

"Armstrong's behavior precludes Williams from pursuing the termination fee because it demonstrates that Williams failed to substantially comply with the merger agreement," Energy Transfer's filing said.

Armstrong's opposition to the deal that would have created the largest midstream operator in the U.S. was no secret; he voted against the deal twice at the September 2015 board meeting that finally blessed the union.

Energy Transfer said in its filing that Armstrong and Bumgarner began exchanging emails in December 2015 that included non-public details that later became a part of Bumgarner's lawsuit against the merger.

Energy Transfer claimed Armstrong misled the court about those communications when he was deposed before the Chancery Court trial in June 2016. The judge later ruled that Energy Transfer could walk away from the deal because of a last-minute opinion by Energy Transfer's attorneys that the deal would not be tax-free.

"At the time of the parties' 2016 trial and Bumgarner's lawsuit, no one knew that Armstrong was feeding Bumgarner inside information to support his effort," Energy Transfer's filing said.

"Armstrong communicated with Bumgarner in person or through Armstrong’s personal email account," Energy Transfer wrote. "Worse yet, Armstrong deleted his personal account two days after his June 9, 2016, deposition in this lawsuit, during which he testified that he could recall no such communications with Bumgarner."

Armstrong did not have any hand in the class-action lawsuit filed in January 2016 before the deal was to close, Bumgarner told Bloomberg, which first reported the story.

"In its attempt to avoid the consequences of its own conduct, Energy Transfer has made a series of unfounded allegations and legal arguments," Williams said in a Feb. 21 statement. "We believe Williams is entitled to judgment in its favor and look forward to the final resolution of this dispute."