Template:El Paso Corp - Coastal merger and issues

In 2003, Oscar Wyatt and other shareholders sued the El Paso Corporation for allegedly misrepresenting its intentions for Coastal assets prior to the merger in 2000. After the merger of Coastal and El Paso Corporation, the latter began divesting itself of Coastal assets beginning in 2001. El Paso needed the cash to repay the mounting debt it had acquired from following the same business model as Ken Lay's Enron. El Paso had heavily leveraged itself to fuel sales into new markets for electricity, and concealed mounting debt from its balance sheet by writing off the debt to offshore subsidiary companies. In June 2003 Oscar Wyatt, along with El Paso investor Selim Zilkha, initiated a proxy fight to gain control of the El Paso Corporation and to wrestle control of the remaining assets, which included natural gas pipelines, exploration, and production assets. Since the merging and disclosing of corporate malfeasance by El Paso management, Its stock had fallen 87% from its February 2001 high of $75 a share. El Paso had debts of $25 billion and was being sued by shareholders and investigated by state and federal regulators.