In the case of Snow Phipps Group LLC v. KCAKE Acquisition, Inc., C.A. No. 2020-0282-KSJM (Del. Ch. April 30, 2021, modified June 2021), the court reviewed a topic of importance in deal litigation and one that has been the subject of many blog posts on these pages: an analysis of when reasonable best efforts or commercially reasonable efforts, which are deemed equivalent standards, have been satisfied. This decision found that reasonable best efforts were satisfied in the context of obtaining financing–and found no MAE in the context of the pandemic. Also notable in this decision is the discussion of the “prevention doctrine.”
This 125-page decision, authored by newly-appointed Chancellor Kathaleen St. J. McCormick while she was still a Vice Chancellor, has already been the subject of much commentary by practitioners and others. See, e.g., the overview that appeared on Harvard Law School’s Corporate Governance Blog (on which yours truly has published multiple articles in the past.) In part because I prefer not to duplicate extensive existing commentary, I simply want to highlight a few key issues addressed in the opinion that have widespread applicability to corporate and commercial litigators.
A prior Chancery decision in AB Stable VIII LLC v. Maps Hotels and Resorts One LLC (Del. Ch. Nov. 30, 2020), was another magnum opus of epic length that addressed similar issues, such as reasonable best efforts, and similarly did not find an MAE in the context of the pandemic.