Fletcher International, Ltd. v. ION Geophysical Corp., C.A. No. 5109-CS (Del. Ch. Dec. 4, 2013).
Issue Addressed: The Court of Chancery addressed a claim for damages in this post-trial opinion that was based on an analysis that included a hypothetical negotiation that would have taken place if the defendant had obtained prior consent as required. The analysis was made in light of a breach of contract which already had been determined in a prior decision.
Background details are available from several prior Delaware decisions in this matter that were previously highlighted on these pages. [Refer to search box in right margin.] This opinion is of limited usefulness to the average litigator because however extensive the discussion, the opinion is based on the somewhat unusual situation involving hypothetical damages that would have been suffered if a breach of contract did not take place due to the failure to obtain prior consent.
The hypothetical negotiation that the court discussed was based on the right of the plaintiff to require the other party to obtain his prior consent to a financing transaction, which consent was not obtained. However, the court substantially discounted the “consent fee” that the court believed the plaintiff would have been able to extract for that consent. In sum, the Court explained that the plaintiff over emphasized the amount of damages it would have been entitled to if the opposing party had complied with the contractual requirement to obtain his prior consent before the financing deal was done. For that reason, this opinion is of only very limited utility to the average litigator. But a good craftsman keeps certain tools in her toolbox even if only rarely used.