The Delaware Supreme Court has reversed a Chancery Court decision that assessed only $1 in damages for a wind-energy development firm's refusal to cash out an investor after it offloaded part of the company in a $1.8 billion asset sale, ruling that the remedy had “no support” in the courts' case law.

The ruling, from a full panel of the state's five justices, came Thursday in a breach-of-contract suit stemming from Leaf Clean Energy Co.'s $30 million investment in Invenergy Wind in 2008. Vice Chancellor J. Travis Laster last year found that Invenergy had breached an agreement to provide Leaf a hefty return on its initial investment if it conducted a partial sale without Leaf's consent.

Laster last April found that Chicago-based Invenergy had breached that obligation, but awarded Leaf just $1 in nominal damages, based on his finding that Invenergy had made enough off of the sale to compensate Leaf for its losses.

The Supreme Court, however, rejected Laster's “efficient breach” analysis in a 33-page opinion that found Leaf was entitled to a $126 million that it had bargained for.

The contract, Justice Gary F. Traynor said, required Invenergy to either secure Leaf's approval ahead of the deal or to pay the negotiated premium. Laster, he said, had instead created an improper “third option” that allowed Invenergy to avoid its obligation altogether.

“Courts award contract damages corresponding to the degree of the injury suffered and do not increase or decrease those damages because of 'efficiency' or lack thereof. Contrary to the Court of Chancery's application of the principle, efficient breach does not bar recovery or modify damages calculations in any way,” Traynor wrote.

“The Court of Chancery's statement that efficient breach itself results in an alternative method for the determination of damages thus was error,” he said.

Steven D. Guggenheim, who argued for Leaf on appeal, said the justices had reached the “right result based on the contract and its plain meaning.”

“The court recognized that the bargain the parties struck was the bargain the parties struck, and enforced that,” said Guggenheim, a partner with Wilson Sonsini Goodrich & Rosati in Palo Alto, California.

According to court documents, Invenergy had tried to “keep Leaf in the dark” about its plans to sell wind assets in 2015 to TerraForm, in exchange for $1.2 billion in cash and the assumption of approximately $800 million in debt. Leaf, however, caught onto the ploy and voted to convert its notes June 18.

Invenergy instead “dragged its feet,” seeking regulatory approval for the conversion. The TerraForm deal closed the following month without Invenergy ever making good on its contractual promise, Traynor said.

Invenergy has since paid Leaf a portion of the $126 million it was owed, as a part of a separate proceeding. On remand, Guggenheim said, the company would be ordered to pay the remainder, plus and pre- or post-judgment interest from the Chancery Court case.

An attorney for Invenergy did not return a call Friday afternoon seeking comment on the ruling.

Leaf is represented by Guggenheim, Keith E. Eggleton and David A. McCarthy of Wilson Sonsini in Palo Alto and Bradley D. Sorrels, Shannon E. German and Andrew D. Berni from the firm's Wilmington office.

Invenergy is represented by Bruce S. Sperling, Harvey J. Barnett and Eamon P. Kelly of Sperling & Slater in Chicago and Kenneth J. Nachbar, Kevin M. Coen, Zi-Xiang Shen and Coleen W. Hill of Morris, Nichols, Arsht & Tunnell in Wilmington.

The case, on appeal, was captioned Leaf Invenergy v. Invenergy Renewables.