The following paper examines the economic impact of recent take-or-pay settlements on the stock prices of Panhandle Eastern Corporation (Panhandle) and Columbia Gas System, Inc. (Columbia). The analysis indicates that each company's stock price was positively affected by settlement of its take-or-pay claims. Each company outperformed both the market and a comparison panel of its industry peers during trading periods surrounding the announcement date of each settlement. The data suggest that by eliminating these financial claims, both companies positively altered their competitive position in the gas transmission industry.

You can access this article if you purchase or spend a download.