Chancery Court Resolves Dispute over Competing Exclusive Remedy Clauses in a SPA
By Lisa Stark and Andrew Lloyd
In Alliant Techsystems, Inc. v. MidOcean Bushnell Holdings, L.P., C.A. No.9813-CB (Del. Ch. Apr. 24, 2015, rev. Apr. 27, 2015), the Delaware Court of Chancery held that an exclusive remedy clause in a stock purchase agreement did not require the parties to submit their dispute over the accounting methodology used to calculate the net working capital of the seller at closing to a court for resolution under the indemnification provisions in the SPA. Rather, the Court held that an accounting firm must resolve the parties’ dispute under a separate exclusive remedy provision. The Court’s decision meant that the buyer had recourse to a larger pool of funds from which it could potentially satisfy its purchase price adjustment claim following closing.