The Delaware Supreme Court addressed the related but distinct defenses of recoupment and setoff, and the statutes of limitations that applied to them, in the context of an appeal from a Court of Chancery decision which decided claims and counterclaims based on overlapping agreements related to multiple entities. In Finger Lakes Capital Partners, LLC v. Honeyoye Lake Acquisition, LLC, No. 42, 2016 (Del. Nov. 14, 2016), the court found that 10 Del. C. Section 8120 precluded setoff for certain amounts owed that were outside the statute of limitations, which were presented in response to the complaint filed in the case. See Finger Lakes Capital Partners, LLC v. Honeyoye Lake Acquisition, LLC, 2015 WL 6455367 (Del. Ch. Oct. 26, 2015).
One reason why this 9-page opinion is notable, is that there are not many Delaware decisions that cover these important topics. In the nearly 11 years that I have covered key corporate and commercial decisions on this blog, we have highlighted only a handful of cases that have addressed these two defenses. Another indication of this short decision’s blogworthy status is that the court found it necessary to cite to a 1906 decision and a legal encyclopedia–both signs of the paucity of case law in Delaware on these two defenses.