backAUSTIN, Aug. 17, 2015 — King & Spalding achieved an important victory in the U.S. Court of Appeals for the Third Circuit on behalf of Thomas L. Kivisto, the former CEO of SemGroup, L.P. The Court issued a permanent injunction Aug. 5 that barred derivative claims against Kivisto following SemGroup's bankruptcy, because Kivisto and other SemGroup defendants had already settled fiduciary-duty claims for $30 million.
SemGroup, an oil-and-gas company, went bankrupt in 2008, and Kivisto settled the fiduciary-duty claims belonging to the SemGroup Litigation Trust in 2010. Former investors filed a copycat suit against Kivisto a month later in Oklahoma state court. The U.S. Bankruptcy Court for the District of Delaware initially enjoined the Oklahoma suit, finding that it involved previously settled derivative claims, but the U.S. District Court for the District of Delaware reversed.
On appeal in the Third Circuit, Kivisto won reversal of the orders denying injunctive relief, with the Court quoting Kivisto's brief in a published opinion on the distinction between derivative and direct claims.
The Austin-based King & Spalding team included partner Paul Bessette, who argued the case in the Third Circuit and co-chairs the firm's Securities Litigation Group, partner Mike Biles, and associate James P. Sullivan.
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