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Kinder Morgan Pays $27.5 Million to End Inflated Payout Case

Kinder Morgan Inc. agreed to pay $27.5 million to resolve investors’ claims it artificially inflated more than $3.2 billion in payouts it collected from a pipeline partnership.

The company agreed to resolve lawsuits filed by investors in its Kinder Morgan Energy Partners LP unit claiming improper distribution of profit payments, according to court documents filed Friday.

Kinder Morgan officials violated the partnership agreement by misclassifying expenses so it could wrongfully pump up payments to itself, the investors alleged in Delaware Chancery Court suits.

The challenged payments “were made in good faith and in a manner...