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Cybersecurity company Forescout Technologies Inc. and private equity company Advent International won't be going to trial this summer in Delaware, instead announcing Wednesday their closure of a $1.43 billion merger agreement.

The agreement settles claims that were set to be addressed by the Delaware Court of Chancery in what would have been the first trial to consider COVID-19′s effects on a company as a potential material adverse event that could warrant another company backing out of a deal.

In May, Advent International informed San Jose, California-based Forescout Technologies it would not be proceeding with the previously-agreed-upon $1.9 million deal, citing the impact of the pandemic on the company. Forescout Technologies maintained the deal didn't constitute a material adverse event as defined in the agreement and filed the case in May.

Delaware case law requires an event be durationally significant to qualify as a material adverse event. After the litigation was filed, Forescout Technologies preannounced second-quarter total revenue that was up 40 percent quarter-over-quarter at the midpoint of the announced revenue range.

Vice Chancellor Sam Glasscock III dismissed the case with prejudice once both companies agreed to the deal, a move eliminating the risk that could be presented by the third-party debt lenders involved in the deal — which Glasscock referred to as a Phyrric victory — without directly addressing claims of a material adverse event.

Lori Will of Wilson Sonsini Goodrich & Rosati, who represented Forescout Technologies, had previously told the court Advent International had tried to use the lack of debt as a defense to closing the merger but that Forescout Technologies was entitled to specific performance. In order to preserve the ability to seek specific performance, she argued, a decision would need to be made before the termination date listed in the merger agreement.

The case was expedited and the court had initially set an evidentiary hearing for June 2 and 3, which would have kept Forescout Technologies' ability to seek specific performance in place through June 6, the agreement's set termination date.

Rather than proceeding with a trial before June 6, the parties agreed to a temporary restraining order in the case, kicking into effect a backup termination date of Aug. 6. That temporary restraining order asked the court to prevent the parties from consummating the merger, causing a failed closing condition.

Given the additional time before the new termination date, the scheduled trial was moved to begin July 20.

During a July 10 phone conference, defense counsel expressed concern about traveling to Georgetown and sought to continue the trial, a request that Glasscock denied.

"In refusing to continue the trial, I noted that doing so would render the equitable relief sought by Forescout Technologies practically unattainable," Glasscock wrote in the Wednesday order.

Will said Thursday while the case didn't go on to address at trial whether COVID-19 damages constitute valid material adverse events, it's plausible cases addressing similar issues, many of which have been filed, could do so.

"I think it's going to be those types of scenarios where you're dealing with a company that's closing stores and people can't actually do business in the way that they used to anymore," Will said. "A lot of deals have just fallen apart entirely."

Kenneth Nachbar of Morris, Nichols, Arsht & Tunnell, who represented the affiliates through which Advent International was operating during the merger, did not immediately respond for comment Thursday.