COURT OF CHANCERY OF THE S AM G LASSCOCK III

V ICE C HANCELLOR STATE OF DELAWARE C OURT OF C HANCERY C OURTHOUSE 34 T HE C IRCLE G EORGETOWN , D ELAWARE 19947 Date Submitted: May 23, 2018

Date Decided: July 10, 2018 Michael P. Kelly, Esquire Andrew S. Dupre, Esquire Benjamin A. Smyth, Esquire McCarter & English, LLP 405 North King Street, 8th Floor Wilmington, DE 19801 Robert A. Penza, Esquire Christopher M. Coggins, Esquire Polsinelli PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801

Re: Brace Industrial Contracting, Inc., et al., v. Peterson Enterprises, Inc., et al. , Civil Action No. 11189-VCG Dear Counsel: What follows is my decision regard ing the Plaintiffs’ “Motion f or Reconsideration” due to allege d errors in my April 12, 2018 Ben ch Ruling (the “April Bench Ruling”), which ame nded some of the preliminary fi ndings in my March 29, 2018 Bench Ruling (the “March Bench Ruling” and, toge ther, the “Bench Rulings”). As I have written upon this matter at some length previously, non-party individuals interested (if any th ere be) are referred to the pr evious decisions in the record for a recitation of issues already resolved in this liti gation. The issues subject to this Motion arose, in part, due to a ten-day delay in the cl osing of a corporate sale, rendering the parties’ accountings concerning the transaction—a s required both by2 contract and this litigation—incompatible. I will not here rep eat the voluminous factual record developed in this case. Instead, I address only the facts pertinent to this Motion; the remainder of the facts have been laid out, ade quately in my view, in the prior opinions. Because, upon review, I find that I did not misapprehend the la w or the facts, I deny the Plaintiffs’ Motion, which I consider to be a motion for reargument. In addition, I adopt the reasoning stated in the March Bench Rulin g, as amended and supplemented by the April Bench R uling. Finally, I reject the Defendants’ request for sanctions. My reasoning follows.
I. ANALYSIS “To prevail on a motion for reargument under Rule 59(f), the mo ving party must demonstrate that the Court either overlooked a decision or principle of law that would have controlling effect or misapprehended the facts or th e law such that the outcome of the decision would be different.” 1 The moving party “bear[s] a heavy burden on a Rule 59 motion. Such motions are not a mechanism f or litigants to relitigate claims already c onsidered by the court.” 2

1 In re Zale Corp. S’holders Litig. , 2015 WL 6551418, at *1 (Del. Ch. Oct. 29, 2015). 2 In re ML/EQ Real Estate P'ship Litig. , Consol. , 2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000).3 A. I Find No Error of Fact This matter was the subject of a multi-day trial, and involves a voluminous record. I have carefully reviewe d that record and given the ev idence the weight that I find it deserves. I find the Bench Rulings consistent with t he facts in the record as I have found them. The parties created two cat egories for line items in connect ion with the accounting required in this dispute: a post-closing adjustment (the “PC Adjustment”) to be performed by an accounting firm (ultimately, by CohnRezni ck), and a “due to/from” adjustment (the “DTF Adjustment”) to be determined by this Court. The merger agreement called for closing on a date certain, but clos ing actually occurred on a later date, requiring change s to the manner in which the a djustments were computed. The parties initially addressed these adjustments in contradictory ways, leading the Plaintiffs’ expert, Steven Kops, to create a Rebutt al Report to align the categories in a way that allowed comparison. According to Kops , “both methods offer a certain level of validity” and “produce the same net re sult,” whether these amounts “should be determined within the [PC] Adjustment [by th e accounting firm] or, instead, here in the [DTF] Adjustment (Delaware Court of Ch ancery).” 3 As noted in the April Bench Ruling, the “key to fair treatment in these circumstances is

3 JX 202 (Kops Rebu ttal Report) ¶ 14.4 consistency―mixing assumptions leads to inadvertent windfalls.” 4 The question before me involves which items b elong to which categories, in l ight of the PC Adjustment resolution per the CohnReznick Report. At trial, the Plaintiffs relied on the testimony of their exper t, Mr. Kops. I found Kops more credible tha n the Defendants’ witnesses. 5 In attempting to resolve the issues before me in the March Bench Ruling, I started my an alysis with the figures from the Kops Initial Report. The March Bench Ruling wa s explicitly preliminary. In that Ruling, I stated: Because I found the final round o f briefing unclear in several respects, however, I decided to give this decision from the bench so that counsel could help with the computationa l questions remaining. To be fr ank, it is not clear from the briefing to what extent the adjustments addressed in this bench decision have already been incorporated in the Kops report , which is my starting point . I, therefore, leave it to counsel to provide final numbers in a form of order, which I request at th e end of this bench ruling. 6 The parties were unable to agree on the appropriate final calcu lation, leading to my April Bench Ruling. Ultimately, in that Ruling, I recomputed m y analysis using the Kops Rebuttal Report, which I found to be the appropriate way t o reconcile both parties’ attempts at accounting.

4 Apr. 26, 2018 Bench Ruling Tr. 12:7–9. 5 Mar. 29, 2018 Bench Ruling Tr. 5 :19–22 (“I found Mr. Kops more credible than the witnesses, expert and lay, on behalf of the de fendants. Specifically, I fo und Eric Peterson, in general, to be less than credible on this issue.”). 6 Id. at 4:23–5:9 (emphasis added).5 The Plaintiffs contend that I made two findings in the April Be nch Ruling that contradict the record and my March Bench Ruling: (1) that the S tarting Cash Amount is $1,035,877 instead of $1,718,481, and (2) that $93,00 0 should be deducted from the Starting Cash Amount. 7 I address each in turn. First, I revised the starting Starting Cash Amount from that u sed in the Kops Initial Report to that used in his Rebuttal Report to allow for the fact that CohnReznick sided with the Defendants in all of the PC Adjustment issues addressed in the October 20, 2017 Report. 8 The Kops Initial Report did not account for that outcome, but the Kops Rebuttal Report was consistent w ith such a finding. 9 Consequently, after further revi ewing the record to determine “ to what extent the adjustments addressed in this be nch decision have already been incorporated in the Kops report,” I revised the Starting Cash Amount to the amount used in the Kops
Rebuttal Report, or $1,035,877. This out come is not a factual error, b ut my finding upon final review of the record.

7 Pls.’ Mot. for Reconsideration ¶ 2. 8 Defs.’ Response To Pls.’ Renew ed Mem. Regarding Outstanding Is sues (“Defs.’ Nov. 17, 2017 Response”) Ex. C (“CohnR eznick Letter”) 15. 9 JX 202 (Kops Rebuttal Report) ¶ 6 n.3 (“In layman’s terms, the issue is one of geography. The Initial Report and Mr. Placht’s Report differ on whether certai n line items should be considered in the [PC Adjustment] proceed ing led by Deloitte LLP, or rathe r form part of a cash reconciliation analysis to be considered by the Court. To pres ent an ‘apples to apples’ comparison, this Rebuttal Report accepts Mr. Placht’s Report’s characterization of various line items as ‘Working Capital’ rather than ‘due to/from.’ This has two net effects. First, it harmonizes the presentation of thi s Rebuttal Report to Mr. Plac ht’s Report, so the two can be compared side by side. Second, it reduces Brace ’s claim in thi s proceeding and correspondingly increases Brace’s claim in the [PC Adjustment] proceeding.”).6 Second, the Plaintiffs contend that I made a “math[ematical] e rror” by deducting $93,000 for “Brace Equipm ent held by [Defendant] Geod ecke” from the Starting Cash Amount because “th e value of physical equipment t hat Defendants rented from Plaintiffs . . . is not cash, and therefore was not included in the Starting Cash Amount from the Kops Initial Report.” 10 True, but irrelevant. I previously found that the record did not dem onstrate that PEI in fact held that equipment, and ordered PEI to “return any equi pment, to the extent it still ha s it, within thirty days.” 11 The Kops Rebuttal Report credits the $93,000 to Brace under the $1,035,877 Starting Cash Amount calculation, under the assumption that Geo decke has this equipment; it describes the amount as the “estimated value” of “Brace Equipment
held by Geodecke,” about which “specific testimony . . . will be of fered during the upcoming [trial].” 12 Testimony was offered, but I found against the Plaintiffs on this issue. This is not an accounting miscalculation on my part but a failure of proof on the Plaintiffs’ part. I find that the $93,000 deduction from t he Starting Cash Amount

was not erroneous.
B. I Find No Error of Law I find that the April Bench Ruling was not procedurally defecti ve and there was no error of law. The Plain tiffs contend that the Defendant s’ Motion for Entry

10 Pls.’ Mot. for Reconsideration ¶ 22. 11 Apr. 26, 2018 Bench Ruling Tr. 14:21–15:11. 12 JX 202 (Kops Rebuttal Repor t) Ex. 1, 2 n.21 (emphasis added).7 of Order (the “EO Motion”) 13 was, in fact, a motion for reargument under Rule 59(f). Because it was filed thirteen days after the March Bench Ruling , the Plaintiffs urge me to reject the “motion for r eargument” as untimely. The Plai ntiffs contend that even if the EO Motion was not subject to Rule 59(f), the Court deprived the Plaintiffs of their right to respond to the EO Motion. These arguments must fail. The Defendants’ “EO Motion”—so call ed—was a response to my request for additional information to aid me i n finalizing the calculations required in light o f the report from CohnReznick. It was not a motion for reargument, if for no other reason than that the March Benc h Ruling was, explicitly, preliminary. At any rate, I did not grant the EO M otion in the April Bench Ruling. The Plaintiffs also argue that their due process rights were vi olated because they were unable to respond fully to the EO Motion. To the ext ent they are right, the matter is mooted by this motion practice. The Plaintiffs c ould respond to any of the Defendants’ arguments in the EO Motion through the submissi on of this Motion, in connection with which, I note , they waived oral argument. I find no error of law in the Be nch Rulings, and this Motion mu st be denied.

13 Defs.’ Mot. for Entry of Order Following Bench Ruling or Alter natively for Revision under Rule 54(b).8 C. Sanctions The Defendants move for sancti ons against the Plaintiffs, on th e ground that the Plaintiffs’ Motion for Recons ideration was “frivolous and a ppears vindictive” and represents the Plaintiffs’ attempt to mislead the Court. 14 I cannot improve on the wise advice of Vice Chancello r Laster: “lawyers should thin k twice, three times, four times, perhaps more be fore seeking Rule 11 sanction s or moving for fees under the bad faith exception.” 15 In my view, the Defendants have thought at least one time fewer here than is optimal. This entire litigat ion has hardly been a model of civility, or of litigan ts’ or judicial economy. The M otion for Sanctions is unwarranted, and is denied. To the extent the foregoing requires an Order to take effect, I T IS SO
ORDERED.

Sincerely,
/s/ Sam Glasscock III Sam Glasscock III

14 Defs.’ Response in Opp’n to Pls .’ Mot. for Reconsideration 9. 15 Katzman v. Comprehensive Care Corp. , C.A. No. 5892-VCL, at 13 (Del. Ch. Dec. 28, 2010) (TRANSCRIPT).