Chancery Court Requires all Sellers to be Joined to a Rescission Claim Relating to Merger Agreement; Allows Unjust Enrichment Claim to Proceed
By David Forney and Mark Hammes
In Shareholder Representative Services LLC v. RSI Holdco, LLC, C.A. No. 2018-0517-KSJM (Del. Ch. May 22, 2019), the Court of Chancery held that the buyer could not seek remedy outside of the scope of a merger agreement from the sellers’ representative without bringing in all sellers as parties to the action because the representative’s authority was limited to matters relating to or arising under the four corners of that agreement. The Court also denied the representative’s motion to dismiss the buyer’s unjust enrichment claim because the buyer properly alleged that the contract arose from sellers’ wrongdoing.
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