Edgewater Growth Capital Partners LP v. H.I.G. Capital, Inc.
Edgewater Growth Capital Partners (Edgewater), a private equity firm, invested in several businesses and put them together in one company called Pendum. Soon after the merger, Pendum began to fail to comply with the covenants it made to its creditors. Eventually, a majority of the senior debt was purchased by affiliates of H.I.G. Capital (collectively, HIG). By this time, Pendum was insolvent. Pendum was eventually sold at an open auction by HIG. Edgewater filed suit, claiming that the sale process was commercially unreasonable and thus a violation of the Uniform Commercial Code (UCC). The Court of Chancery rejected Edgewater's UCC claim and its other attacks on the sale process and, because Edgewater's claims were primarily motivated by its desire to avoid its $4 million guaranty, held that Edgewater was contractually obligated to pay HIG's attorneys' fees in defending against Edgewater's claims. View "Edgewater Growth Capital Partners LP v. H.I.G. Capital, Inc." on Justia Law