In ClubCorp, Inc. et al., v. Pinehurst LLC et al., C.A. No. 5120-VCP (Del. Ch., Nov. 15, 2011), read opinion here, the Court of Chancery addressed a contractual dispute among the parties to an indemnification agreement related to a merger. Complicating the issue was the fact that the plaintiffs engaged in a corporate restructuring after they filed the indemnification action. As a result of the restructuring, each of the original named plaintiffs merged into a new corporate entity, and the successors to the original entities sought to continue to assert the original plaintiffs’ contractual rights in the indemnification action. The defendants argued that the restructuring mergers violated an anti-assignment provision of the Indemnification Agreement and as a result, regardless of whether the original plaintiffs’ claims were indemnifiable, the successor entities could not enforce their predecessors’ rights under the Indemnification Agreement.
The plaintiffs’ moved for summary judgment and the Court found that the Indemnification Agreement was ambiguous in certain important respects and that there are genuine issues of material fact regarding the parties’ intent as to the relevant indemnification clauses. Therefore, the Court denied plaintiffs’ motion for summary judgment, but grant limited relief under Rule 56(d) regarding defendants’ laches argument.
This summary was prepared by Kevin F. Brady of Connolly Bove Lodge & Hutz LLP.