In LaPoint v. AmerisourceBergen Corp., (Del. Ch., Sept. 4, 2007), read opinion here, the Chancery Court ruled that a merger agreement was breached in connection with an "earnout provision", and awarded former shareholders of the acquired company $21 million in damages. Amerisource has vowed to appeal, as reported by Bloomberg News here. The Chancellor provided an introductory overview of the case that deserves to be quoted, as follows:
This case falls into an archetypal pattern of doomed corporate romances. Two companies—Bridge Medical, Inc. and AmerisourceBergen Corporation–agree to merge, each convinced of a happy future filled with profits and growth. Although both partners harbor some initial misgivings, the merger agreement reflects these concerns, if at all, in an inaccurate and imprecise manner. After some time, the initial romance fades, the relationship consequently sours, and both parties find themselves before the Court loudly disputing what the merger agreement “really meant” back in its halcyon days. If this case is different, it is only in the speed with which the ardor faded.
UPDATE: Here is the affirmance by the Delaware Supreme Court in a 7-page Order dated April 8, 2008, upholding the Chancellor’s opinion.