Articles Posted in Contracts

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United BioSource LLC (UBC) and Bracket Holding Corp. entered into a securities purchase agreement (SPA) pursuant to which Bracket purchased all equity interests and ownership interests in three subsidiaries of UBC, including P-Star Acquisition Co. Section 2.6(e) of the SPA governed the handling of certain tax refunds relating to pre-closing periods that may be received after the transaction’s closing. UBC later filed this complaint asserting a claim for specific performance. The complaint asserted that Bracket breached section 2.6(e) of the SPA by failing to forward a Pennsylvania tax refund to UBC within fifteen days of P-Star’s receipt of the refund. The Court of Chancery granted UBC’s motion for summary judgment seeking an order requiring Bracket to immediately forward the tax refund to UBC, holding that UBC clearly established that Bracket breached section 2.6 of the EPA based on undisputed facts, and Bracket’s affirmative defenses failed as a matter of law. View "United BioSource LLC v. Bracket Holding Corp." on Justia Law

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This lawsuit involved a loan agreement between Lender and Borrowers. The agreement gave Lender an option to purchase the collateral for the loan - the famous ex-Presidential Yacht Sequoia. A valuation of the Sequoia for purposes of securing the loan was established via fraud on the part of Borrowers. The claims and counterclaims arising out of the loan agreement were eventually resolved by a settlement entered as a court order. The only issue remaining for the Court of Chancery was to oversee the computation of the amount due Borrowers from Lender should Lender elect to acquire the Sequoia. Lender agreed to a minimum option price of zero dollars. The Court of Chancery found the option price to be zero dollars. View "The Sequoia Presidential Yacht Group LLC v. FE Partners LLC" on Justia Law

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This letter opinion addressed Third-Party Defendants’ motions to dismiss Third-Party Plaintiffs’ amended third-party complaint. The Third-Party Defendants advanced four bases on which the amended complaint should be dismissed, including lack of personal jurisdiction, failure to state a claim, failure to comply with Court of Chancery Rule 23.1, and an unreasonable delay in bringing the amended complaint. The Court of Chancery granted the Third-Party Defendants’ motions to dismiss, holding that the Third-Party Plaintiffs’ claims were time-barred because the Third-Party Plaintiffs failed to identify a tolling doctrine or extraordinary circumstances sufficient to avoid application of laches. View "CMS Inv. Holdings, LLC v. Castle" on Justia Law

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The underlying action in this case took place in a California court and resulted in a jury award of compensatory damages of $22.3 million in favor of Sierra Railroad Company and against Patriot Rail Company LLC. The jury also awarded punitive damages and exemplary damages in favor of Sierra. Sierra moved to amend the California judgment to add Gary Marino, the former Chairman, President and CEO of Patriot Rail, as a judgment debtor. Marino subsequently commenced this action seeking advancements of attorneys’ fees and expenses for the claims asserted against him in the post-judgment motion. The Court of Chancery granted summary judgment in favor of Marino, holding that Marino was entitled to some, but not all, of the fees and expenses that he has and will incur defending against the post-judgment motion. View "Marino v. Patriot Rail Co. LLC" on Justia Law

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In 2011, Seller sold a Company to Buyer under an Agreement. The Agreement contained provisions relating to tax consequences of change-of-control payments and professional fees that would be incurred that would reduce the Company’s tax liability. Seller argued before the Court of Chancery that Buyer breached the Agreement by not paying to Seller the full value of the tax savings. The Court entered judgment in favor of Seller in the $1,557,171, together with post-judgment interest at the legal rate, holding that, according to the intent of the parties as expressed in the Agreement as well as extrinsic evidence, Buyer owes Seller the value of the tax savings. View "Cyber Holding LLC v. CyberCore Holding, Inc." on Justia Law

Posted in: Contracts

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Plaintiff sought a preliminary injunction against Defendant to secure its information rights under a governing agreement. The Court of Chancery denied the motion, concluding that there was not a sufficient showing of risk of irreparable harm to justify interim injunction relief. Plaintiff moved for reargument or reconsideration, arguing that the Court misapplied or misapprehended the law and the facts. The Court of Chancery denied Plaintiff’s motion for reargument, holding that Plaintiff failed to demonstrate that the Court’s decision regarding irreparable harm was the product of a misapprehension of the facts or a misapplication of the law. View "AM Gen. Holdings LLC v. Renco Group, Inc." on Justia Law

Posted in: Contracts

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In 2012, a private equity firm purchased a trucking company now owned by Buyer through a merger transaction. Plaintiff initiated this action as the representative of the selling securityholders (Securityholders) to recover a preclosing tax refund. Buyer, in response, asserted several counterclaims. Securityholders sought to dismiss Buyer’s counterclaims. The Court of Chancery (1) denied Securityholders’ motion to dismiss Buyer’s common law fraud claim insofar as that claim asserted fraud based on extra-contractual statements made to Buyer before it entered the merger agreement, as Buyer was not prevented from asserting a claim for fraud based on representations outside the four corners of the merger agreement; (2) granted Securityholders’ motion to dismiss Buyer’s claim under the Delaware Securities Act and Buyer’s claim of unilateral mistake, as these claims failed to state a claim for relief; and (3) granted Plaintiff’s motion for summary judgment concerning the tax refund claim, as Buyer had no defense to Plaintiff’s motion. View "FdG Logistics LLC v. A&R Logistics Holdings, Inc." on Justia Law

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Plaintiff and Defendant entered into a Master Purchase/Service Agreement (MPSA) containing a provision that, under certain conditions, allowed the prevailing party in a dispute arising under the MPSA to recovery attorneys’ fees. Plaintiff brought suit in the Delaware Superior Court, and then Defendant filed in New Jersey. The venue dispute ended with the Delaware Superior Court granting Defendant’s motion to stay in favor of the New Jersey action, which effectively mooted the Delaware action. Plaintiff sought a voluntary dismissal, but Defendant wanted dismissal with prejudice and to recover its attorneys’ fees and costs incurred in the action. The Court of Chancery dismissed this action under Court of Chancery Rule 419(a)(2), without prejudice. As a condition of dismissal, the Court retained jurisdiction to award attorneys’ fees and costs to Defendant in accordance with the MPSA, holding (1) dismissal without prejudice was appropriate as to the venue dispute; and (2) while waiting for the final outcome of the New Jersey action would be the preferable approach before awarding attorneys’ fees, at this point, under the terms of the MPSA, Defendant was entitled to its attorneys’ fees that were incurred in this action. View "Avaya, Inc. v. Charter Commc’ns Holding Co., LLC" on Justia Law

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This case involved a home-improvement contract between Petitioner, a construction company, and Respondents, homeowners. Both parties argued that the other breached the contract. The superior court determined that the matter must be referred to arbitration under an arbitration provision in the contract. The arbitrator found in favor of Petitioner. Petitioner filed this action seeking to confirm the arbitration award and moved for summary judgment. Only after Petitioner filed its summary judgment motion did Respondents file an answer opposing confirmation of the award. The Court of Chancery granted the petition to confirm, holding that summary judgment was appropriate in this case. View "SC&A Constr., Inc. v. Potter" on Justia Law

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VTB Bank, a Ukranian bank and company, brought this lawsuit against Development Max, LLC, a Delaware limited liability company, and Navitron Projects Corp., a Panamanian corporation and managing member of Development Max, alleging fraudulent transfer, constructive fraudulent transfer, and unjust enrichment. Development Max and Navitron filed a motion to dismiss on the grounds of forum non conveniens, among other theories. The Court granted the motion with respect to VTB’s claim against Navitron but denied the motion with respect to VTB’s claim against Development Max. On reconsideration, the Court granted, without prejudice, Development Max’s motion to dismiss on grounds of forum non conveniens, holding that Ukraine, as opposed to Delaware, was the proper forum in which to litigate this dispute. View "VTB Bank v. Navitron Projects Corp." on Justia Law