Global Asset Capital, LLC v. Rubicon US Reit, Inc., C.A. No. 5071-VCL (Del. Ch., Nov. 16, 2009)(Transcript).   Read transcript ruling on Motion for TRO here.

This bench ruling, memorialized in a transcript, addressed the binding nature of a letter of intent in the context of a TRO motion. [References in Delaware briefs to a ruling contained in a transcript is an accepted practice.]

Global filed suit against Rubicon alleging that Rubicon and its directors were breaching the binding obligations of Rubicon under the letter of intent (LOI), by disclosing the contents of the LOI to third parties and engaging in sale discussions with third parties while declining to negotiate with Global.

The Court recognized that the duty to negotiate in good faith was an important right that the Court would protect unless the LOI was one in which it was clearly stated to be a non-binding LOI (which was not the situation in this case). The Court did not read the LOI to have a “fiduciary out” and the Court issued a TRO enjoining Rubicon from disclosing the contents of the LOI by soliciting or considering other offers and that Rubicon had the duty to negotiate in good faith with Global under the LOI.