Chancery Court Emphasizes Nexus Between Unclean Hands Defense and Asserted Claims
In Pilot v. Greg Abel, Vice Chancellor Morgan T. Zurn granted a motion to strike the defenses of unclean hands and in pari delicto because the defenses lacked a sufficient nexus to the contractual claims asserted by the plaintiff.
May 01, 2024 at 09:00 AM
8 minute read
ContributorsIn Pilot v. Abel, 2023 WL 8643195 (Del. Ch. Dec. 13, 2023), Vice Chancellor Morgan T. Zurn granted a motion to strike the defenses of unclean hands and in pari delicto because the defenses lacked a sufficient nexus to the contractual claims asserted by the plaintiff. The Vice Chancellor also denied an 11th-hour proposed amendment to those defenses on the grounds that the amendment would cause undue prejudice to the plaintiff given the existing case schedule.
In 2017, Berkshire Hathaway, through its subsidiary, National Indemnity Company (NICO), agreed to buy an 80% interest in Pilot Travel Centers LLC (PTC) in two stages. The terms of the sale and the parties' respective rights in PTC were governed by several agreements. These agreements included the investor rights agreement, which granted plaintiff Pilot Corp. the right to sell its remaining 20% interest to Berkshire within 60 days of Dec. 31, the end of PTC's fiscal year (the put right); and the sixth amended and restated limited liability company agreement governing PTC (LLC agreement), which granted Pilot a consent right over changes to PTC's accounting policies, except as required by applicable law or GAAP (the consent right).
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