Tonernews.com, September 17, 2019. USA
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Delaware Court Denies
Essendant Motion in Dispute with GPC.Genuine Parts Company (GPC) can move ahead with its ‘breach of contract’ legal proceedings against Essendant, a Delaware court has ruled.By Andy Braithwaite.
Genuine Parts Company (GPC) can move ahead with its ‘breach of contract’ legal proceedings against Essendant, a Delaware court has ruled.Last October, GPC filed a lawsuit against Essendant claiming it (Essendant) had breached its contractual obligations regarding the proposed merger with S.P. Richards (SPR) and that GPC was entitled damages far in excess of the $12 million break-up fee it received.Essendant motioned to dismiss GPC’s claims on the basis that the break-up fee was the “exclusive remedy” for the termination of the SPR merger agreement. This argument has been rejected by the Court of Chancery of the State of Delaware in a 9 September ruling. “I see no basis to conclude that GPC’s acceptance of the termination fee precludes it from pursuing breach of contract claims as a matter of law,” wrote the court’s Vice Chancellor Joseph Slights in his memorandum opinion.GPC alleges that Essendant violated the terms of its merger agreement for SPR by concealing its contact with Essendant’s eventual acquiror, Sycamore Partners, until after it had already signed the agreement with GPC. The judge agreed that there was enough in GPC’s claims to pursue the lawsuit.“I am satisfied GPC has adequately alleged enough in total from which I can infer that Essendant, at least indirectly, encouraged or facilitated a proposal with respect to a competing transaction,” Slights wrote.The case continues.
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