ELAINE COUGHLAN, as Stockholders' Representative of the former GloNav, Inc. Stockholders, Plaintiff, v. NXP B.V., Defendant., 2011 Del. Ch. LEXIS 166

Summary

The case involved the interpretation of two provisions in the merger agreement concerning contingent payments due in certain circumstances. Defendant argued that its obligations under the merger agreement with the company were assumed by the joint venture, thus avoiding acceleration. The chancery court applied the "step transaction" doctrine and determined the two transactions that resulted in the joint venture's ownership of the company's assets were part and parcel of the same transaction. Thus, a triggering event under the merger agreement had occurred, which accelerated the contingent payments. Nevertheless, the language of the merger agreement was unambiguous, and per its provisions, defendant's performance obligations under the merger agreement were assumed by the joint venture, thus avoiding the acceleration of the remaining revenue contingent payments. Defendant's and the joint venture's post-transaction behavior also showed that the joint venture assumed defendant's ...