Shareholders Sue Oil Driller Continental CEO Over Pipeline Investment

In September, the Pennsylvania Laborers District Council Construction Industry Pension Fund, which owns an unspecified number of Continental shares, filed the lawsuit against Hamm, six of Continental's directors, and Hiland entities.

The plaintiffs are asking, among other things, that Hamm and the other defendants surrender to the company any profit or benefit related to Continental's investment in Double H.

The Hiland pipeline transaction "enriches Hamm at the company's expense," says the claim, reviewed by Reuters. Hamm and related parties breached their fiduciary duties by not fairly evaluating the transaction, and by agreeing to fund an "excessive and inequitable amount" of the pipeline's development costs while only getting a fraction of the benefits, the claim alleges.

Continental said the lawsuit had no merit.

Double H was "fully and adequately reviewed by the full Board's disinterested and independent directors," Continental's General Counsel Eric Eissenstat said in an email. They "expressly found it to be in the best interests of the company" as pipeline infrastructure in and around North Dakota catches up with booming oil production there.

Continental declined to make Hamm available for an interview.

Pension funds are lead plaintiffs in a small portion of shareholder lawsuits, many of which are either dismissed or settled, legal experts said.


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