Southwest Gas, Southern Union reach settlement agreement

Wednesday, Aug. 7, 2002 | 10:57 a.m.

A settlement agreement between Southwest Gas Corp. and Southern Union Co. will resolve a large portion of a three-year-old dispute among competing natural gas suppliers serving the southwestern United States.

Southwest, the dominant supplier in Southern Nevada, today announced that it has reached an agreement in a dispute that has been pending in U.S. District Court in Phoenix involving the terminated acquisition of Southwest by ONEOK Inc., Tulsa, Okla., in 2000, and the rejection of a competing offer from Austin, Texas-based Southern Union in 1999.

"This makes a huge dent in terms of solving the whole issue," said Michael O'Connor, an attorney representing Southwest. "We've spent a lot of time and effort on this in the last three years. This show we're not in the business of litigation, but we're in the business of supplying natural gas to customers in three states."

Under terms of the agreement, Southwest will pay Southern Union $17.5 million and both companies will end pursuit of their legal claims against each other. Southwest will take a one-time charge of about 33 cents a share in the second quarter to cover the settlement costs.

Still pending are claims Southwest and Southern Union each have against ONEOK. A trial is scheduled Oct. 15 before Judge Roslyn Silver.

Southern Union's remaining claim against ONEOK involves an alleged interference in a contract, while Southwest's suit against ONEOK alleges breach of contract and fraud.

"Southwest is pleased to finally resolve our legal disputes with Southern Union," said Southwest Chairman Thomas Hartley in a statement issued today. "Our management team will now have more time to focus our efforts on the fastest-growing natural gas distribution company in the United States, Southwest Gas."