News & Analysis as of

Stock Purchase Agreement Breach of Contract

Morris James LLP

Chancery Concludes Accountant Provision in Stock Purchase Agreement Calls for Expert Determination Rather than Arbitration

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ArchKey Intermediate Holdings Inc. v. Mona, C.A. No. 2021-0383-JTL (Del. Ch. Oct. 3, 2023) - Parties to a stock purchase agreement disputed post-closing price adjustments. The agreement called for an independent accountant...more

Morris James LLP

Chancery Declines to Order Acquirer to Make Contingent Payments after Discontinuing Development of a Medical Product

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Pavel Menn v. ConMed Corp., C.A. No. 2017-0137-KSJM (Del. Ch. June 30, 2022) - Plaintiff was a representative of stockholders who had entered into a stock purchase agreement (“SPA”), in which the defendant acquired a...more

Pillsbury Winthrop Shaw Pittman LLP

Snow Phipps: No MAE or Ordinary Course Breach Related to COVID-19

Delaware Chancery Court awards specific performance after finding that buyer failed to demonstrate a material adverse effect or ordinary course breach by target and that buyer failed to use reasonable best efforts to obtain...more

Stinson - Corporate & Securities Law Blog

Court Finds Buyer is not Required to Return Cash in Purported “Cash Free, Debt Free” Deal

Deluxe Entertainment Services Inc. v. DLX Acquisition Corporation involved a stock purchase agreement where Plaintiff Deluxe Entertainment sold all of its stock (the “Transaction”) in its wholly owned subsidiary, Deluxe Media...more

Gray Reed

Delaware Superior Court Holds Indemnification Provision Does Not Cover First-Party Claims for Legal Fees

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In Ashland LLC v. Samuel J. Heyman 1981 Continuing Trust for Lazarus S. Heyman (Del. Super. Ct. Nov. 10, 2020), the Complex Commercial Litigation Division of the Delaware Superior Court held that parties to a contract are...more

Sheppard Mullin Richter & Hampton LLP

Delaware Court of Chancery Holds that a Contractual Delaware Choice of Law Provision Did Not Waive Plaintiff’s Claim Under the...

In Swipe Acquisition Corp. v. Krauss, CA No. 2019-0509-PAF, 2021 WL 282642 (Del. Ch. Jan. 28, 2021), the Delaware Court of Chancery held that California public policy prohibited a purported waiver of a contractual party’s...more

Morris James LLP

Delaware Choice of Law Provision in Stock Purchase Agreement Does Not Eliminate Claim for Fraud under California Securities Act

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Swipe Acquisition Corp. v. Krauss, C.A. No. 2019-0509-PAF (Del. Ch. Jan. 28, 2021) - This decision concerned a motion to dismiss a claim for fraud under the California Securities Act, which the defendants argued was...more

Morris James LLP

CCLD Holds Indemnification Provision Does Not Cover First-Party Claims

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Ashland LLC v. Samuel J. Heyman 1981 Continuing Trust for Lazarus S. Heyman, C.A. No. N15C-10-176 EMD CCLD (Del. Super. Ct. Nov. 10, 2020) - This case illustrates that Delaware courts will follow the “American Rule” that...more

Morris James LLP

Chancery Orders Trial to Determine Meaning of Ambiguous Post-Closing Covenants in a Stock Purchase Agreement

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Schneider Nat’l Carriers, Inc. v. Kuntz, C.A. No. 2017-0711-PAF (Del. Ch. July 16, 2020) - If parties to a contract offer reasonable but conflicting interpretations of ambiguous contractual language, the Court of Chancery...more

Morris James LLP

Chancery Offers Guidance on When the Limitations Periods Begin to Run For Claims Concerning Breaches of Representations and...

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Kilcullen v. Spectro Scientific, Inc., C.A. No. 2018-0429-KSJM (Del. Ch. July 15, 2019). Delaware law provides for a default three-year statute of limitations period for breaches of contract, generally applicable to claims...more

Burns & Levinson LLP

Don’t Assume That Closely Related Agreements Will Be Interpreted As One Contract

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In some transactions, such as those involving the acquisition of a business, the deal may be documented through a primary contract and subsidiary agreements that are referenced in, or even attached as Exhibits to, the...more

Morris James LLP

Delaware Superior Court CCLD Dismisses Breach of Contract Action for Failure to State a Claim

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P&TI Acquisition Co. v. Morgenthaler Partners VII, LP, C.A. No. N18C-08-059 AML CCLD (Del. Super. May 9, 2019). Plaintiff P&TI Acquisition Co. brought a breach of contract action asserting that Defendants violated a 2012...more

A&O Shearman

Delaware Court Of Chancery Holds Alleged Breaches Of Representations Do Not Excuse Buyers' Noncompliance With Post-Closing...

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On October 29, 2018, Chancellor Andre G. Bouchard of the Delaware Court of Chancery entered final judgment on counterclaims seeking to enforce covenants in a stock purchase agreement requiring the buyers to remit certain tax...more

Polsinelli

Missouri Appellate Court Explores Legal Remedies after Failed Business Purchase, Joins the Trend of State Court Exploring the...

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A recent court case from Missouri’s Eastern District Court of Appeals provides insight on the intersection of declaratory judgments, legal damages, and equitable relief, particularly in disputes over complicated business...more

Morris James LLP

Superior Court Rules When Fees Recoverable

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Clean Harbors Inc. v. Union Pacific Corporation, No. N15C-07-081 MMJ CCLD (Nov. 15, 2017) - When an obligation to indemnify includes the fees incurred in the underlying litigation is a surprisingly frequent question....more

McDermott Will & Emery

Sublicensee’s Purchase of Licensee Not Prohibited under the License Agreement - VDF FutureCeuticals, Inc. v. Stiefel Labs., Inc.

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The U.S. Court of Appeals for the Seventh Circuit ruled that a sublicensee of patent and trademark rights that purchased its sublicensor in order to reduce the royalties it owned to the licensor was not prohibited from buying...more

Mintz

Making “Material Adverse Change” Mean What You Choose It to Mean — Neither More nor Less

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A recent decision by the Court of Chancery of Delaware provides a reason to pause before agreeing to standard, boilerplate “material adverse change” clauses in purchase agreements. In Osram Sylvania, Inc. v. Townsend...more

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