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Key Decisions from Delaware Courts
A few recent decisions from the Delaware Court of Chancery provide useful information to corporate executives who are involved in the sale or purchase of businesses, or who are involved in joint ventures in which the sales price or the post-closing profit distribution is based on certain milestones being reached and requiring at least one party to use its best efforts, or related standards, in order to reach those milestones that trigger an earn-out.
The cases that follow involve two different but similar standards applicable to the efforts required to reach post-closing milestones in order to trigger payments, and an analysis by the court about whether those standards have been satisfied.
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