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Rice Founders Claim EQT Attempting to Thwart Proxy Battle; Files Lawsuit

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The proxy battle between EQT Corp. and Rice Energy's founders continues.

On April 25, 2019, Toby Z. Rice filed a lawsuit in Pennsylvania State Court against EQT and its Board of Directors. The lawsuit seeks to prevent EQT and the Board from taking actions that the Rice Team believes are designed to thwart its proxy campaign.

The complaint alleges that EQT is attempting to create an uneven playing field by taking the highly unusual and unfair step of requiring, as a condition of the submission of nominations, that the Rice Team's nominees consent to being named in EQT's proxy materials. The Rice Team believes that there is no such requirement in EQT's bylaws and that any such requirement would violate Pennsylvania law.

Tobe Rice commented: "We believe both sides agreeing to use a universal proxy card would reflect best-in-class corporate governance, as the most qualified directors would be elected regardless of which proxy card a shareholder voted on. We also believe it is unconscionable for the EQT Board to attempt to coerce shareholder votes by allowing a loss of the election to potentially trigger substantial penalties under EQT's credit agreement. In our view, these entrenching actions, coupled with other unfair actions such as EQT delaying its annual meeting to July rather than holding it in April as it has historically done, are attempts to manipulate the corporate machinery to gain a tactical advantage rather than allow shareholders to have their voices heard in a timely and fair manner."

EQT issued a statement responding to the lawsuit filing.

EQT states: "We believe the lawsuit filed today by Toby Rice is an unconstructive attempt to distract from the strong first quarter results EQT announced today and the continued successful execution of the Company's new strategic plan. The Company's outstanding financial and operational performance demonstrates that it is on track to achieve the ambitious free cash flow targets set out in January. Notably, over the last two quarters EQT has generated more than $300 million in adjusted free cash flow (a non-GAAP measure). Management continues to be laser-focused on turning EQT into a free cash flow machine."