NEW YORK (TheStreet) -- Energy Transfer Equity (ETE) stock is surging by 6.98% to $6.90 in late-morning trading on Wednesday, as rising oil prices overshadow a lawsuit by Williams Cos. (WMB).

Williams Cos. has filed separate lawsuits against Energy Transfer Equity and its CEO Kelcy Warren, alleging that they violated the companies' merger agreement with a private preferred share offering that was meant to fund the $32.6 billion deal. 

Last month, the two pipeline companies clashed after Energy Transfer Equity issued convertible units to certain investors such as Warren to help finance the $6 billion it will owe Williams Cos. shareholders after the deal closes. 

Williams Cos. is now claiming that the private offering grants these Energy Transfer Equity investors preferential treatment on distributions. The lawsuit seeks to unwind the private offering of the preferred units. 

A separate lawsuit against Warren alleges wrongful interference with the merger as a result of the private offering of preferred units. 

Seprately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Energy Transfer Equity's strengths such as its impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations are countered by weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

You can view the full analysis from the report here: ETE

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

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