Curtis J. Crowther, left, and Trevor L. Bradley, right, of Robinson+Cole. Courtesy photos Delaware Court Again Strikes Down Restrictive Covenant in the Sale of Business
The Delaware Court of Chancery again declined to blue-pencil the restrictive covenant sending a clear reminder to buyers that they must narrowly tailor noncompete and nonsolicitation provisions in purchase agreements and related sale documentation under Delaware law.
April 05, 2023 at 09:00 AM
5 minute read
Contributors
On March 16, in Intertek Testing Services v. Jeff Eastman, C.A. No. 2022-0853-LWW, the Delaware Court of Chancery determined for the second time in recent months that a restrictive covenant entered into in connection with the sale of a business was not enforceable. We previously wrote back in October 2022 about the Delaware Court of Chancery's decision in Kodiak Building Partners v. Philip D. Adams, C.A. No. 2022-0311-MTZ (Oct. 6, 2022). In that case, Vice Chancellor Morgan Zurn found that a restrictive covenant entered into in connection with an asset purchase agreement was unenforceable due to it being geographically overbroad. Vice Chancellor Zurn also declined to "blue-pencil" the restrictive covenant to narrow its scope to make it enforceable.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Chancery Stays Action Pending Resolution of a Motion to Dismiss in a First-Filed Action to Which the Defendant Is Not a Party
5 minute read Chancery Court Exercises Discretion in Setting Bond in a Case Involving Share Transfer Restriction
6 minute read
Law Firms Mentioned
Trending Stories
- 1DOJ Asks 5th Circuit to Publish Opinion Upholding Gun Ban for Felon
- 2GEO Group Sued Over 2 Wrongful Deaths
- 3Revenue Up at Homegrown Texas Firms Through Q3, Though Demand Slipped Slightly
- 4Warner Bros. Accused of Misleading Investors on NBA Talks
- 5FTC Settles With Security Firm Over AI Claims Under Agency's Compliance Program
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
