IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

SCHILLINGER GENETICS, INC., 

an Iowa corporation, and JOHN 

SCHILLINGER, on his own behalf 

and in his capacity as Owners’ 

Representative,

Plaintiffs, 

v.

BENSON HILL SEEDS, INC., f/k/a 

SGI GENETICS, INC., a Delaware 

corporation, 

Defendant.

)

)

)

)

)

)

)

)

)

)

)

)

)

)

)

C.A. No. 2020-0260-MTZ

MEMORANDUM OPINION

Date Submitted: October 5, 2020

Date Decided: February 1, 2021

Michael P. Kelly, Andrew S. Dupre, and Sarah E. Delia, McCARTER & ENGLISH, 

LLP, Wilmington, Delaware, Attorneys for Plaintiffs.

Travis S. Hunter and Dorronda R. Bordley, RICHARDS, LAYTON & FINGER, 

P.A, Wilmington, Delaware; Kenneth J. Mallin, Jason S. Meyer, and Sasha D. 

Riedisser, BRYAN CAVE LEIGHTON PAISNER, LLP, St. Louis, Missouri, 

Attorneys for Defendant.

ZURN, Vice Chancellor.
1

Parties contracting in good faith and with prudent foresight often place funds 

in escrow to tailor their contractual obligations to events, predicted or unexpected,

that may come to pass. In the present case, the buyer purchased substantially all of 

the seller’s assets pursuant to an asset purchase agreement, and escrowed funds to 

secure the seller’s obligations with respect to any post-closing price adjustment or 

indemnity claims in two distinct accounts, each guarded by some procedural hurdles 

that the buyer struggled to clear. 

The first account contained escrow funds to be distributed in accordance with 

the agreement’s post-closing purchase price adjustment process. Under that process, 

the buyer was obligated to deliver to the seller a closing statement setting forth the 

buyer’s calculated purchase price adjustment within ninety days of closing. The 

buyer failed to timely deliver the requisite closing statement. After much prodding 

by the seller, the buyer submitted the closing statement nearly two months late. 

The second escrow account contained funds to be distributed in satisfaction 

of any timely indemnity claim for the seller’s breach of the agreement. The 

agreement set forth a period and procedure for the buyer to give notice of such 

indemnity claims and preserve the buyer’s right to claw back the indemnity escrow 

funds. The agreement also specified how notice was to be given, while providing 

that the buyer’s failure to properly notice an indemnity claim would not adversely 

affect the buyer’s right to the indemnity escrow funds in the absence of material 
2

prejudice. The buyer’s written notice of an escrow claim pressed the boundaries of 

the agreement’s time and manner requirements.

The seller, as plaintiff in this action, claims the buyer breached the agreement 

by failing to follow the procedures for properly claiming the escrowed funds and by 

ultimately refusing to release those funds. The seller moved for partial summary 

judgment. Because the buyer failed to timely deliver the closing statement as 

required by the agreement, I conclude the seller is entitled to summary judgment on

its claim for the adjustment escrow funds. But because the buyer preserved its

indemnity claim by providing sufficient notice, I conclude summary judgment is 

appropriate in the buyer’s favor on the seller’s count regarding the indemnity escrow 

funds.

I. BACKGROUND1

Schillinger Genetics, Inc. (“Seller” or the “Company”) is an Iowa corporation 

that was formerly engaged in the business of soybean research and breeding.2 

Plaintiff John Schillinger (“Schillinger,” and together with Seller, “Plaintiffs”) 

1 Citations in the form of “Compl. ¶ ––” refer to the plaintiff’s complaint, available at 

Docket Item (“D.I.”) 1. Citations in the form of “Answer ¶ ––” refer to the Defendant’s 

answer to the Complaint; citations in the form of “Affirmative Defense ¶ ––” refer to 

Defendant’s affirmative defenses to the Complaint; and citations in the form “Countercl. ¶ 

––” refer to Defendant’s counterclaims; each is available at D.I. 44.

2 Answer ¶ 7. 
3

founded Seller.3 Benson Hill Seeds, Inc. (“Defendant” or “Buyer”) is a Delaware 

corporation and “crop improvement company dedicated to unlocking the natural 

diversity of plants.”4 Buyer conducts soybean research and breeding using assets 

purchased from Seller.5

A. The Parties Execute The APA And Escrow Agreement.

This action arises out of an asset purchase agreement dated February 7, 2019 

(the “Closing”)6 between and among Seller or certain stockholders of Seller (the 

“Owners”), Schillinger as “Owners’ Representative,” and Buyer (the “APA”).7 The 

APA transferred all assets and certain liabilities of Seller to Buyer for $14,000,000 

subject to certain adjustments (the “Transaction”).8 The APA contemplates a postClosing purchase price adjustment and sets forth a process for calculating and paying 

any adjustment out of escrowed funds. It also contains indemnification provisions 

3

Id. ¶ 8.

4 D.I. 24 at 2; D.I. 24, Affidavit of Michael Wainscott ¶ 3 [hereinafter “Wainscott Aff.”]. 

Buyer is formerly known as “SGI Genetics, Inc.” and is a wholly owned subsidiary of 

Benson Hill Biosystems. See Wainscott Aff. ¶ 3.

5 Answer ¶ 9.

6

I use this term to refer to both the closing of the Transaction and the date on which it 

occurred, February 7, 2019.

7 Compl. Ex. A [hereinafter “APA”].

8

Id. Recital A, §§ 2.1, 2.2, 2.3; see also Answer ¶ 15; D.I. 18, Affidavit of John Schillinger 

¶ 2 [hereinafter “Schillinger Aff.”].
4

pursuant to which Seller agreed to indemnify Buyer for breaches of certain 

provisions of the APA, also out of escrowed funds.

The parties also executed an escrow agreement dated February 7, 2019 

(the “Escrow Agreement”).9 Buyer deposited $950,000 into an escrow account 

(the “Escrow Funds”).10 The Escrow Funds are divided into two separate accounts: 

“(a) $250,000 (such amount, together with any interest, future deposits, and other 

income thereon, the “Adjustment Escrow Funds”), and (b) $700,000 (such amount, 

together with any interest, future deposits, and other income thereon, the “Indemnity 

Escrow Funds”).”11 The Adjustment Escrow Funds are intended to secure the 

parties’ post-Closing price adjustment obligations under Section 2.5 of the APA, and 

the Indemnity Escrow Funds are intended to secure the parties’ indemnification 

obligations under Sections 7.1, 7.2, 7.3, and 7.5 of the APA.12 Accordingly, the 

Adjustment Escrow Funds and Indemnity Escrow Funds are held in separate 

accounts and have distinct release and timing mandates under the APA and Escrow 

Agreement.13 

9 Compl. Ex. B [hereinafter “Escrow Agreement”]; Answer ¶ 17.

10 Answer ¶ 19.

11 Escrow Agreement § 3; see also APA § 2.8(a); Answer ¶ 20.

12 See Answer ¶ 16.

13 See APA § 2.8(a)–(c).
5

1. Post-Closing Price Adjustment

Section 2.5 of the APA sets forth a purchase price adjustment process.14 That 

section obliges the Owners’ Representative to prepare and deliver to Buyer a preClosing “Estimated Closing Statement” setting forth a reasonable good faith 

estimate of Seller’s accounts payable.15 After Closing, Buyer bears the burden of 

establishing a post-Closing adjustment to the purchase price if the Seller’s actual 

accounts payable assumed and paid by Buyer exceeded the pre-Closing estimate:

16

Within ninety (90) calendar days after the Closing, Buyer shall prepare 

and deliver to Owners’ Representative a calculation of the Accounts 

Payable of the Company and the Subsidiaries as of the Calculation 

Time (the “Closing Accounts Payable”) and a calculation of the 

amount, if any, by which the Closing Accounts Payable exceeds the 

Target Accounts Payable (taking into account the adjustment to 

Accounts Payable made pursuant to Section 2.5(a)) (the “Closing 

Statement”). The Closing Statement shall be prepared in accordance 

with the Accounting Principles and the terms of this Agreement. After 

delivery of the Closing Statement, Buyer shall permit Owners’ 

Representative and its accountants reasonable access to the accounting 

records, work papers, and computations used by Buyer in the 

preparation of the Closing Statement.17

The APA does not specify what should happen if Buyer fails to timely deliver a 

Closing Statement.18 

14 See id. § 2.5.

15 Id. § 2.5(a).

16 Id. § 2.5(b).

17 Id.

18 See id. § 2.5(b)–(c).
6

Within twenty days of receipt of the Closing Statement, Owners’ 

Representative may notify Buyer in writing (a “Notice of Dispute”) of any 

“Disagreement” regarding the Closing Statement.19 If Owners’ Representative fails 

to timely deliver a Notice of Dispute to Buyer, then Owners’ Representative is 

deemed to have accepted the Closing Statement, and the Closing Statement is final, 

binding, and non-appealable.20 If Owners’ Representative does timely deliver a 

Notice of Dispute, then the APA sets forth a process for resolving the Disagreement: 

first by the parties’ good faith negotiation and resolution efforts, but if those efforts 

are unsuccessful within twenty-five days after Buyer receives the Notice of Dispute, 

then by referral to an independent accounting firm.21 If there is no Disagreement, or 

after any Disagreement is resolved under Section 2.5(c), the Estimated Closing 

Statement and Closing Statement are to be used to calculate and pay a “Final 

Adjustment Amount” under Sections 2.5(d), (e), (f), (g), and (h).22 

Under those subsections, the APA’s baseline outcome, in which Seller 

receives the Adjustment Escrow Funds as part of the Transaction consideration, may 

change depending on whether the Final Adjustment Amount was less than or equal 

19 Id. § 2.5(c) (defining “Disagreement” as “any” disagreement with respect to the Closing 

Statement). 

20 Id.

21 Id.

22 Id. § 2.5(c), (d).
7

to $50,000; in excess of $50,000 and positive; or in excess of $50,000 and negative.

23

 

An negative amount in excess of $50,000 triggers Buyer’s right to claw back all or 

some of the Adjustment Escrow Funds.24 But if the Final Adjustment Amount is 

zero, less than $50,000, or in excess of $50,000 and positive, Seller receives the 

Adjustment Escrow Funds.25 Adjustment Escrow Funds that are not “claimed” by 

Buyer as a Final Adjustment Amount are to be released to Seller.26

23 See id. § 2.5(e) (“[I]f the numeric value of the Final Adjustment Amount (without taking 

into account whether such number is positive or negative) is less than or equal to fifty 

thousand dollars ($50,000.00), then no post-Closing adjustment pursuant to this Section 

2.5 shall be made, the Final Adjustment Amount, shall be deemed to be zero, and Sections 

2.5(f), 2.5(g) and 2.5(h) shall be of no further force and effect. In the event that the numeric 

value of the Final Adjustment Amount (without taking into account whether such number 

is positive or negative) is more than fifty thousand dollars ($50,000.00), then (and only 

then) the provisions of Sections 2.5(f), 2.5(g), and 2.5(h) shall apply.”); id. § 2.5(f) (“[I]f 

the Final Adjustment Amount is a positive number, the Company shall be entitled to 

receive from Buyer an amount in cash equal to the Final Adjustment Amount, which 

amount shall be payable in accordance with Section 2.5(g) below. If the Final Adjustment 

Amount is a negative number, Buyer shall be entitled to receive from the Company an 

amount in cash equal to the absolute value of the Final Adjustment Amount.”).

24 See id. § 2.5(f), (h).

25 See id. § 2.5(e), (f). If the Final Adjustment Amount is in excess of $50,000 and positive, 

Seller gets funds in addition to the Adjustment Escrow Funds. See id. § 2.5(f)–(h).

26 Id. § 2.8(c) (governing release of unclaimed escrow funds “[w]ithin the later of ninety 

(90) days after the Closing Date and five (5) days after the determination of the Final 

Adjustment Amount”); id. § 2.5(h) (providing for release of the Adjustment Escrow Funds 

after determination of the Final Adjustment Amount); Escrow Agreement § 4 (providing 

that within five business days following the determination of the Final Adjustment 

Amount, Buyer and Owners’ Representative shall instruct the Escrow Agent to pay the 

amount, “if any, of the Adjustment Escrow Fund to be paid to Buyer pursuant to Section 

2.5” of the APA, and that “[i]f there is no amount to be paid to Buyer under Section 2.5 of 

the [APA], then . . . the entire balance of the Adjustment Escrow Fund will be disbursed 

by the Escrow Agent to the Company”).
8

2. Indemnification For Breaches Of Certain 

Representations, Warranties, And Covenants 

Under The APA

Plaintiffs promised to ensure the Company’s Business was protected for 

Buyer’s benefit and made numerous representations, warranties, and covenants

regarding that Business.

27

 Relevant here, Plaintiffs covenanted that Seller and 

Owners’ Representative would refrain from competing with the Business, soliciting 

its suppliers and customers, and disclosing its confidential information.

28

 

Under Section 7.2 of the APA, Seller agreed to indemnify Buyer for “Losses” 

“incurred or to be incurred by any of them resulting from or arising out of or in 

connection with” a breach of the representations, warranties, covenants or “other 

obligations” of Seller or any Owner in the APA, any “Related Agreement, or any 

other document delivered pursuant [to the APA] or in connection with the 

Closing.”29 The Escrow Agreement is the only “Related Agreement” under the 

APA, and is explicitly identified as a document delivered in connection with Closing 

27 See, e.g., APA §§ 3.1–3.36, 5.3, 5.6, 5.7. Under the APA, “‘Business’ means the 

business activities, operations, and practices of the Company . . . as conducted by the 

Company . . . on the date hereof.” Id. § 1.19.

28 See id. §§ 5.6, 5.7. The parties stipulated that breaches of the non-compete and nonsolicitation covenants in Section 5.7 would constitute irreparable harm. Id. § 5.8(b).

29 Id. § 7.2(a)–(b). “Losses” include “any and all claims, losses, monetary damages, 

obligations, liabilities, fines, fees, penalties, expenses, or costs, plus reasonable attorneys’ 

and professional fees and expenses, court costs, and expert witness fees and expenses, 

incurred in connection therewith and/or in connection with the enforcement of” the APA. 

Id. § 7.2.
9

under Section 2.4.30 Owner’s Representative also agreed to indemnify Buyer Losses 

incurred from or in connection with breaches of his representations, warranties, 

covenants, and obligations under the APA.31

Section 7.1’s survival provision puts different limits on Buyer’s recourse for 

different classes of representations.32 Representations that are not “Fundamental 

Representations” (the “Non-Fundamental Representations”) are subject to a oneyear survival period; they expire twelve months after the Closing Date, “except that 

such expiration shall have no effect on any obligations in respect of which a notice 

of claim has been submitted hereunder prior to such expiration.”33 Plaintiffs’ noncompete, non-solicitation, and non-disclosure covenants, as well as the 

representations and warranties in dispute between the parties, are Non-Fundamental 

Representations.34

Section 7.5 of the APA and Section 5 of the Escrow Agreement set forth the 

process for Buyer to notice and preserve indemnity claims (each an “Indemnity 

Claim”) for breaches subject to indemnification, for the parties to resolve disputes 

30 See id. §§ 1.121, 2.4(a)(vii), 2.4(b)(iv); Answer ¶ 18.

31 APA § 7.3(a)(b).

32 Id. § 7.1.

33 Id.

34 Id. (characterizing a select few representations, warranties, and obligations, under the 

APA “Fundamental,” and rendering all others non-Fundamental).
10

as to such claims, and for disbursement of the Indemnity Escrow Funds.35 Both 

agreements require Buyer to provide Seller and Owners’ Representative with written 

notice of an Indemnity Claim via a “Claim Notice.”

36

 The APA offers four means 

of giving a Claim Notice: (1) in person; (2) by confirmed facsimile; (3) by overnight 

courier, in which case notice is effective the next Business Day; and (4) by registered 

or certified mail, in which case notice is effective on the second succeeding Business

Day.37 The Escrow Agreement mirrors these methods, and additionally permits 

notice to be duly given via email.38 Both agreements specify where notice 

thereunder must be given to Seller, including a particular mailing address and email 

address at “schillgen.com” for Schillinger; but they also permit delivery “at such 

other address for a Party as shall be specified by like notice.”39 

35 See id. § 7.5; Escrow Agreement § 5.

36 APA § 7.5 (stating that if Buyer seeks indemnification it “shall give reasonably prompt 

written notice to the indemnifying Party . . . specifying the facts constituting the basis for 

such claim and the amount, to the extent known, of the claim asserted”); id. § 8.1

(mandating that all notices under the APA be in writing); Escrow Agreement § 5(a) (“If 

Buyer is permitted to and elects to assert an Indemnity Claim, it shall give written notice 

of such claim (a ‘Claim Notice’) . . . .”); id. § 16 (mandating that all notices under the 

Escrow Agreement be in writing).

37 APA § 8.1(a)–(d).

38 Escrow Agreement § 16(i)–(iii).

39 APA § 8.1; accord Escrow Agreement § 16 (stating that notice thereunder shall be 

“addressed at the address shown in this Section 16, or, as applicable, using such other 

address, facsimile number or e-mail address as may be designated in writing hereafter by 

such party”).
11

Both agreements provide deadlines for submitting a Claim Notice. Under 

Section 7.5(a) of the APA, Buyer

shall give reasonably prompt written notice to the indemnifying Party 

. . . specifying the facts constituting the basis for such claim and the 

amount, to the extent known, of the claim asserted; provided, that the 

right of a Person to be indemnified hereunder shall not be adversely 

affected by a failure to give such notice unless, and then only to the 

extent that, an Indemnifying Party is actually and materially prejudiced

thereby.40

Under the Escrow Agreement, Buyer was required to submit a Claim Notice of any 

permitted Indemnity Claim “prior to the expiration of the Escrow Period” by 

February 10, 2020.41

Seller’s receipt of a Claim Notice kicks off a dispute resolution process. 

Within ten business days of receipt, Seller may dispute the validity or amount of the 

claim (an “Indemnity Notice of Dispute”).42 Thereafter, the parties must consult and 

try to resolve their dispute; after thirty days, the Buyer may file suit.43

40 APA § 7.5(a).

41 Escrow Agreement § 5(a) (requiring Buyer to “give written notice of such claim to the 

Escrow Agent and to the [Owners’] Representative promptly following its obtaining 

knowledge of such Losses (and in any event prior to the expiration of the Escrow Period)” 

(emphasis added)). The Escrow Period began at Closing and “end[ed] one (1) Business 

Day following the one-year anniversary” of same. Id. § 1. The Escrow Agreement defines 

“Business Day” as “any day other than a Saturday, Sunday or federal holiday, or a day on 

which commercial banks in the State of Missouri are authorized to close.” Id. The oneyear anniversary of Closing fell on Friday, February 7, 2020. The next Business Day was 

Monday, February 10.

42 APA § 7.5(d).

43 Id.
12

If indemnification is ultimately owed, then “Owners’ Representative shall 

cause the Escrow Agent to pay such amount not more than thirty (30) days after any 

Buyer Indemnified Person provides notice to Owners’ Representative of such 

amount.”44 Indemnity Escrow Funds not claimed via a Claim Notice are to be 

promptly disbursed after the Escrow Period expires.

45

B. The Parties’ Relationship Sours Post-Closing. 

Pursuant to the APA, Buyer agreed to hire Schillinger as Chief Technology 

Officer.46 At Closing, Schillinger accepted Buyer’s employment offer, and he 

continued to work for Buyer pursuant to an employment agreement dated February 

7, 2019 (the “Employment Agreement”).47 The Employment Agreement included 

various non-competition and restrictive covenants.48 The parties did not identify the 

44 Id. § 7.5(c).

45 Escrow Agreement § 5(d) (“Upon the expiration of the Escrow Period, the Escrow Agent 

shall disburse to the Company, as promptly as practicable, any portion of the Indemnity 

Escrow Fund not subject to a Claim Notice as provided in this Section 5.”); APA § 2.8(c) 

(stating that Indemnity Escrow Funds not subject to claim were to be released “[p]romptly 

following the first anniversary of the Closing Date”); id. § 7.5(a) (stating that “[s]ubject to 

the terms of this Agreement and of the Escrow Agreement (except to the extent that the 

Indemnifying Party disputes the indemnification obligations associated with such claim), 

the Indemnifying Party shall pay, or, if applicable, shall cause the Escrow Agent to pay, 

the amount of any valid claim not more than thirty (30) days after the Indemnified Party 

provides notice to the Indemnifying Party of such amount”).

46 See APA § 5.11(a) & Sched. 5.11; see also Answer ¶ 21.

47 See Answer ¶¶ 21, 22; Schillinger Aff. ¶ 3; D.I. 12, Ex. 2 [hereinafter “Employment 

Agreement”].

48 See, e.g., Employment Agreement §§ 2.5, 2.6.
13

Employment Agreement as a “Related Agreement” under the APA or as a document 

to be delivered in connection with Closing under Section 2.4.49

Shortly after signing the Employment Agreement, Schillinger allegedly 

hatched plans to compete with the Business; began soliciting its customers and

disclosing his competitive plan in the process; began taking other actions in 

furtherance of his plan; and began sharing Buyer’s confidential and proprietary 

information.

50

 Buyer learned of Schillinger’s actions, and believed they breached 

the Employment Agreement and the APA.

51

 As a result, on April 12, Buyer 

terminated Schillinger’s employment and his access to his schillgen.com e-mail 

account.

52 This spurred Schillinger to file an arbitration action against Buyer, which 

is currently pending in Iowa and scheduled for a final hearing in spring of 2021 (the

“Arbitration”).

53

49 See APA §§ 1.121, 2.4. Section 2.4 does, however, require to Seller to deliver at Closing 

“such other documents, instruments and agreements, including notarial and other deeds, as 

may be required by local Law and custom, or reasonably requested by Buyer, for the 

purpose of consummating the transactions contemplated by this Agreement.” 

Id. § 2.4(a)(xxii). Buyer faces no similar Closing document delivery obligation under 

Section 2.4(b).

50 See Wainscott Aff. ¶¶ 7, 9, 10, 11, 12, 20 & Exs. 2–5.

51 See D.I. 24 at 11–14 (summarizing Schillinger’s alleged breaches of the Employment 

Agreement and APA § 5.6); see also Wainscott Aff. Ex. 3.

52 Answer ¶ 22; Schillinger Aff. ¶ 4; Wainscott Aff. ¶ 13.

53 Answer ¶ 23; Wainscott Aff. ¶¶ 19, 20; D.I. 12, Ex. 3. On April 23, Buyer filed for 

injunctive relief in Iowa state court to compel Schillinger to turn over his electronic devices 

in aid of Buyer’s investigating his misconduct. See D.I. 24, Affidavit of Kenneth J. Mallin 

[hereinafter “Mallin Aff.”] Ex. 12. Schillinger counterclaimed on the basis that his 

termination was wrongful under the Employment Agreement. Id. Ex. 13. The Iowa court 
14

In addition to the fallout under Schillinger’s Employment Agreement, the 

parties’ relationship further soured when Buyer discovered that Plaintiffs engaged 

in pre- and post-Closing conduct that allegedly breached certain APA NonFundamental Representations. For example, Buyer learned that Seller failed to 

disclose Material Contracts and their attendant obligations, as well as encumbrances 

on certain Accounts Receivable, and that Seller potentially misrepresented that it 

had not been violating or infringing any intellectual property by conducting the 

Business.54

C. Buyer Issues An Untimely Closing Statement.

The parties’ fractured relationship also manifested in their post-Closing 

settling up. The APA obligated Buyer to deliver to Schillinger, as Owners’ 

Representative, a Closing Statement and to give Schillinger reasonable access to the 

records used in preparing it.

55

 Because Closing occurred on February 9, Buyer was 

required to deliver a Closing Statement by May 8, 2019. Buyer failed to do so.56

held that Schillinger’s claims were governed by a mandatory arbitration provision, and 

stayed that action pending an arbitration. Id. Ex. 14. Schillinger pursued the Arbitration, 

and Buyer counterclaimed in that proceeding. See Wainscott Aff. ¶¶ 19–20 & Ex. 8.

54 See, e.g., Wainscott Aff. ¶¶ 21–27.

55 See APA § 2.5; Answer ¶¶ 25, 26.

56 Answer ¶¶ 27, 28.
15

In view of Buyer’s failure, Seller contacted Buyer via counsel three times.57 

On May 9, Seller’s counsel notified Buyer’s counsel that the deadline to submit the 

Closing Statement had lapsed.58 Buyer’s counsel did not dispute that the deadline 

lapsed, but indicated that that they had followed up with their client and were 

awaiting a response.59 On May 20 and 29, Seller again apprised Buyer it had still 

not submitted a Closing Statement, and that Seller expected to receive one.60 In 

Seller’s May 29 communication, its counsel acknowledged the Arbitration and 

expressly noted Seller’s “preference not to expand the disputes between the parties,” 

but also made clear that “the continued delays may leave [Schillinger] and the 

company with no choice if [Buyer] continues to fail to satisfy its obligation to deliver 

the required report.”61

57 Compl. Exs. C, D, E; Answer ¶ 29.

58 See Compl. Ex. C at 1 (“Yesterday was the deadline (pursuant to section 2.5(b) of the 

Purchase Agreement) for Benson Hill to deliver to John Schillinger a statement of the 

Closing Accounts Payable and the amount, if any, by which the Closing Accounts Payable 

differed from the Target Accounts Payable. Do you know (or can you check on) the status 

of this report?”).

59 See id. (“We followed up with our client on this yesterday and are awaiting their 

response. We’ll continue to follow up to get this wrapped up.”).

60 See Compl. Ex. D at 1 (“Just following up on the AP report that was due on May 8. Do 

you have any more information on its status and timing?”); id. (“We confirmed with our 

client that they have a draft and it is just about complete. They are meeting internally with 

the finance team finalize. I would expect it in the next few days, but we’ll keep you 

posted.”); Compl. Ex. E at 1 (communicating on May 29 that the Closing Statement 

deadline had passed).

61 Compl. Ex. E at 1 (“The statement of the Closing Accounts Payable and the amount, if 

any, by which the Closing Accounts Payable differed from the Target Accounts Payable is 

now three weeks past its due date under the Asset Purchase Agreement. Given the limited 
16

Approximately one month passed, and Buyer still failed to satisfy its 

obligation under Section 2.5. Seller’s counsel sent Buyer’s counsel a letter on June 

24 (the “June 24 Letter”).62 The June 24 Letter stated,

Pursuant to Section 2.5(b) of the Asset Purchase Agreement, the report 

referred to above was required to be delivered to Mr. Schillinger, as the 

“Owner’s Representative” of the Company, on or before May 8, 2019. 

SGI Genetics, Inc. [Buyer] has failed and refused to deliver this report 

in accordance with the terms of the Asset Purchase Agreement. I have 

contacted your external law firm (Bryan Cave Leighton Paisner LLP) 

on three separate occasions in an attempt to ascertain the status and 

timing of the delivery of this report. I have been told that it “was just 

about complete”, that it is being reviewed and that it was to be expected 

“in the next few days”. The report is now more than six weeks past 

due, and SGI Genetics, Inc. [Buyer] continues to fail and refuse to 

provide the report and permit the inspections envisioned and required 

by section 2.5(b) of the Asset Purchase Agreement. On behalf of 

[Seller] and John Schillinger, as the Owner’s Representative, you are 

hereby notified that SGI Genetics, Inc. [Buyer] is in default of, has 

breached and continues to breach and be in default of the Asset 

Purchase Agreement.

63

scope of the report and the relatively small number of accounts payable that it likely covers, 

it is difficult to understand the cause of the delay. I know that John Schillinger and SGI 

Genetics are already involved in a dispute, and it is our preference not to expand the 

disputes between the parties. However, the continued delays may leave John and the 

company with no choice if BHB continues to fail to satisfy its obligation to deliver the 

required report. Please let me know when we can expect the report.”); id. (“We’ve passed 

this request along to our client and will pass along their reply as soon as we have it.”).

62 Compl. Ex. F; Answer ¶ 29.

63 Compl. Ex. F at 2 (emphasis added) (noting Seller’s belief that Buyer’s breaches were

“intentional and willful”).
17

As with the May 29 communication, Seller recognized the Arbitration and 

“prefer[ence] to avoid a continuing and protracted dispute with [Buyer].”64 

Accordingly, the June 24 Letter warned, 

If SGI Genetics, Inc. [Buyer] does not provide the report and other 

information required by section 2.5(b) on or before July 5, 2019, the 

Company and Mr. Schillinger will be forced to take such steps as may 

be necessary and appropriate to protect its and their interests, including 

but not limited to filing suit to obtain injunctive relief and damages 

resulting from defaults of SGI Genetics, Inc. under the Asset Purchase 

Agreement . . . .

65

Nearly two months after the deadline passed, on July 3, Buyer emailed Seller 

a purported Closing Statement and Closing Accounts Payable, and informed Seller 

that “[t]he calculations reflect a negative adjustment of $80,219.04.”66 On a July 9 

telephone conference, Seller’s counsel acknowledged that the July 3 email, rather 

than a “formal notice letter,” was an acceptable delivery.

67

 The parties continued to 

communicate regarding the Closing Statement.68

64 Id.

65 Id.

66 Compl. Ex. H at 4; Answer ¶ 30.

67 Compl. Ex. H at 4 (“On behalf of Benson Hill Biosystems, please find attached the 

Closing Statement with calculation of Closing Accounts Payable, which we are delivering 

pursuant to 2.5(b) of the Asset Purchase Agreement. . . . In the interest of getting this to 

you and John as quickly as possible, we are sending to you via email without a formal 

notice letter. We would appreciate your confirmation of receipt and that this manner of 

delivery is acceptable to you and John.”); id. (“Thank you for your call and for confirming 

that delivery by email is acceptable. Per your request, we will send a hard copy of the 

spreadsheet to John S. by FedEx. I expect it will go out tomorrow.”).

68 See generally id.
18

On July 15, Buyer delivered revised versions of those documents.

69

 Buyer 

purported to claim a purchase price adjustment for a $49,292.53 line item labeled 

“Seth Taylor Bad Debt” (the “Bad Debt”).

70 To understand Buyer’s purported 

adjustment, Seller repeatedly requested that Buyer give Seller and Schillinger 

reasonable access to its accounting work papers, records, and computations used to 

prepare the late Closing Statement, pursuant to Section 2.5(b) of the APA.71 In 

response, Buyer provided certain records and computations.72

Via letter dated July 31, Schillinger issued a Notice of Dispute.

73

 Seller’s 

counsel informed Buyer of its Disagreements with respect to the Closing Statement, 

including Buyer’s untimely submission in violation of the APA;

74 Seller’s belief that 

Buyer had not allowed access to all “the accounting records, work papers, and 

computations used by Buyer in relation to the proposed adjustment for” the Bad

69 Answer ¶ 31.

70 Id.

71 Id. ¶ 33.

72 Id. ¶ 34.

73 Id. ¶ 32; Compl. Ex. G (stating that “[t]his letter shall serve as the Notice of Dispute of 

the Owner[s’] Representative, on his behalf and on behalf of the Company, of its and their 

Disagreement with the proposed and revised Closing Statement and Closing Accounts 

Payable”).

74 Compl. Ex. G at 2 (identifying as a “Disagreement” that “Buyer failed and refused to 

deliver its proposed Closing Statement and Closing Accounts Payable until July 3, 2019 in 

clear violation of and default of the Asset Purchase Agreement”).
19

Debt;75 and Seller’s belief that the Bad Debt concerned an Account Receivable,

rather than an Account Payable that would affect any post-Closing adjustment under 

Section 2.5.76 Seller’s Notice of Dispute reiterated that “Owners’ Representative 

and the Company stand ready and willing to negotiate in good faith to resolve any 

Disagreement which remains,” and reminded Buyer that, under the APA, failure to 

resolve any Disagreement required the parties to submit their disputes to an 

independent accountant.77

In an attempt to resolve the Disagreements in good faith, as required by the 

APA, Seller requested access to the supporting papers, but Buyer provided no further 

documents.

78 Given that the APA’s allotted twenty-five day period to resolve 

Disagreements had ended, Seller emailed Buyer on September 6 and October 8, 

requesting to submit the Disagreement to an independent accountant for final 

resolution under Section 2.5(c).79 Seller noted that Buyer’s continued avoidance and 

75 Id.

76 Id. at 2–3.

77 Id. at 4.

78 See Answer ¶¶ 33, 34.

79 Id. ¶ 38; Compl. Ex. H at 1 (“The 25 day negotiation period has ended, and we 

presumably aren’t going to reach an agreement (since [Buyer] didn’t even respond to our 

objections). The agreement envisions the appointment of a neutral accountant to determine 

the correct adjustment, if any, and the corresponding distribution of funds from the escrow 

account. Given that [Buyer] has missed each of the deadlines associated with this 

adjustment, we would like to get/keep this process moving to a resolution.”); Compl. Ex. I 

at 1 (“I have heard nothing from you since you for a month and a half, and the 25 day 

negotiation period has long since ended. [Buyer] has not responded to our objections, nor 
20

frustration of Section 2.5’s processes would result in court action.80 To date, Buyer 

has refused to resolve the Disagreement under Section 2.5 or execute a joint 

instruction releasing the $250,000 Adjustment Escrow Funds to Seller.81

D. Buyer Asserts An Indemnity Claim. 

On February 7, 2020, Buyer sent Schillinger and his counsel a Claim Notice 

under Section 7.5 of the APA for Plaintiffs’ alleged breaches of Non-Fundamental 

Representations.82 Buyer sent the Claim Notice, dated February 7, 2020, via 

Overnight Express to Schillinger at his specified mailing address under the APA and 

Escrow Agreement.83 Schillinger received it on February 10, three days after the

Non-Fundamental Representations’ survival period expired and on the final day of 

the Escrow Period.

84

 Buyer also sent the Claim Notice via email to Schillinger’s 

has it responded to our request to appoint a neutral accountant to resolve any accounting 

disputes and to direct the distribution of funds from the escrow account.”).

80 Compl. Ex. I at 1 (“We would prefer to avoid the need to file a lawsuit to compel [Buyer]

to participate in the agreed upon process, but [Buyer]’s actions (or, more accurately, 

inactions) are effectively requiring us to do so. Please let me know this week what 

[Buyer]’s position is with respect to our objections. If we are unable to resolve this -- and 

appoint a neutral accountant in accordance with the terms of the agreement -- within the 

next two weeks, we will have no other choice than to seek a court order appointing a neutral 

accountant and proceeding with the format agreed upon in the purchase agreement.”).

81 Answer ¶¶ 40, 41.

82 Compl. Ex. J at 1; Answer ¶¶ 50, 51.

83 Answer ¶¶ 50, 51.

84 Id. ¶ 50. Also on February 7, Buyer sent the Claim Notice via e-mail and FedEx to the 

Escrow Agent, as required under the APA and Escrow Agreement; the Escrow Agent also 

received the FedEx package on February 10. See id. ¶¶ 50, 51. 
21

defunct schillgen.com email address; Schillinger did not receive that e-mail, and 

Buyer did not receive receipt of its delivery.85 Schillinger had never updated his email address from the one listed in the APA and Escrow Agreement.86

 Since Buyer’s 

Claim Notice, the Escrow Agent has continued to hold the Indemnity Escrow 

Funds.87

Within ten days of receiving Buyer’s Claim Notice, via letter on February 19, 

Seller issued its Indemnity Notice of Dispute, challenging Buyer’s Indemnity Claim 

on the basis that notice was untimely and that its substantive allegations were false.

88

 

By letter dated March 5, Buyer responded and refuted Seller’s position, but stated 

that Buyer would contact Seller’s counsel to attempt to resolve the dispute in good 

faith, while also reserving the right to file suit in this Court.89

E. This Action Ensues. 

Plaintiffs filed this action on April 7, 2020, claiming Buyer has improperly 

refused to release the Escrow Funds to Seller.90 Count I asserts a claim for breach 

85 Id. ¶¶ 53, 54; Schillinger Aff. ¶ 5.

86 Wainscott Aff. ¶ 28.

87 See Answer ¶¶ 51, 66.

88 Compl. Ex. K at 2 (“We have received a letter from Kenneth J. Mallin, Esq., of Bryan 

Cave Leighton Paisner LLP, dated February 7, 2020 . . . , which purports to be a Dispute

Notice pursuant to the Asset Purchase Agreement . . . . The Letter is untimely, it is 

insufficient, and it is both inaccurate and false and misleading . . . .”).

89 Compl. Ex. L at 3.

90 See generally Compl.
22

of the APA and Escrow Agreement regarding the Indemnity Escrow Funds.91 Count 

II asserts a claim for breach of the APA and Escrow Agreement regarding the 

Adjustment Escrow Funds.92 Count III asserts trade libel.93 Plaintiffs seek damages; 

specific performance of Buyer’s obligations under the Escrow Agreement to execute 

a joint instruction to cause the Escrow Agent to release all remaining Escrow Funds; 

a declaration that Defendant has waived its right to a post-Closing adjustment by 

failing to pursue it in the manner required by APA Section 2.5; and costs and fees.94 

On April 20, Buyer moved to dismiss or stay this action in view of the 

Arbitration (“Buyer’s Motion”),95 contending “any decision with regard to th[e 

Escrow Funds] revolves around factual claims and legal issues raised by Plaintiffs 

and [Defendant] in the First Filed Arbitration.”96 In response, on May 8, Plaintiffs 

moved for partial summary judgment on Counts I and II of the Complaint (the 

“Motion,” and together with Buyer’s Motion, the “Motions”).97 Buyer opposed the 

Motion and submitted an affidavit pursuant to Court of Chancery Rule 56(f).98 

91 Id. ¶¶ 69–76.

92 Id. ¶¶ 77–82.

93 Id. ¶¶ 83–86.

94 Id. ¶¶ A–F.

95 D.I. 7.

96 D.I. 12 at 1.

97 D.I. 13.

98 See D.I. 24, Rule 56(f) Declaration of Travis S. Hunter, Esq. [hereinafter “Rule 56(f) 

Aff.”]; see also Ct. Ch. R. 56(f).
23

Buyer contended summary judgment is inappropriate because it had yet to answer 

the Complaint or conduct discovery, and because discovery is necessary into any 

unclean hands defense, whether Plaintiffs received actual notice of Buyer’s claim 

for indemnification, and damages.

99

 The parties fully briefed the Motions as of July 

31.100 

On August 24, the Court denied Buyer’s Motion and allowed Plaintiffs’ 

claims to proceed, as Counts I and II arise out of the APA and Escrow Agreement 

and are subject to valid forum selection clauses in favor of Delaware courts.101 

The Court heard argument on the Motion on August 25.102 In order to better 

assess the Motion on summary judgment, the Court directed Buyer to answer the 

99 See Rule 56(f) Aff. ¶¶ 11–15.

100 D.I. 13; D.I. 18; D.I. 24; D.I. 27.

101 D.I. 37. However, I invited the parties to address at argument whether the Arbitration 

addresses a competing claim to the Indemnification Escrow Funds; whether, assuming 

Plaintiffs prevail in this action, the arbiter’s ruling could warrant withholding or offsetting 

payout of those escrowed amounts; and whether the APA and Escrow Agreement permit 

such a delay. Id. The parties’ presentations did not persuade the Court that this action and 

the Arbitration overlap such that the Arbitration bears on these proceedings. To the 

contrary, they are distinct, and it is not apparent that the parties will be able to stake any 

claim to the Escrow Funds in the Arbitration, which is siloed to the Employment 

Agreement. And to the extent Defendant attempts to loop in breach of the Employment 

Agreement as a basis for indemnification under Section 7.5 of the APA, that position fails. 

Under the APA, Plaintiffs agreed to indemnify Buyer for breaches of the APA, any Related 

Agreement, “or any other document delivered pursuant [to the APA] or in connection with 

the Closing.” APA § 7.1. The APA does not identify the Employment Agreement as a 

Related Agreement, nor does it identify it as a document to be delivered in connection with 

Closing. See id. §§ 1.121, 2.4.

102 D.I. 38; D.I. 41 [hereinafter “Hr’g Tr.”].
24

Complaint and file any counterclaims and affirmative defenses, and afforded the 

parties to submit supplemental letter briefs regarding summary judgment.

103

 

Accordingly, on September 16, Buyer filed its Answer, Affirmative Defenses, 

and Counterclaim.104 Buyer asserted as an affirmative defense that “[t]he Complaint 

is barred, in whole or in part, by the doctrines of waiver, estoppel, laches, and/or 

unclean hands,” pointing to Plaintiffs’ alleged breaches of the APA.105 Buyer also 

affirmatively asserted that “Plaintiffs waived the requirement that any Closing 

Statement be delivered on or before May 8, 2019” via the June 24 Letter;106 that 

“Plaintiffs have suffered no prejudice as a result any delay in delivery of the Closing 

Statement”;107 and that to the extent the Court finds Buyer’s Indemnity Claim 

untimely, “Plaintiffs have suffered no actual or material prejudice or other injury as 

a result thereof.”108 Buyer’s Counterclaim asserted one count for breach of contract, 

alleging that Seller and Schillinger breached the APA by engaging in competitive 

103 See Hr’g Tr. at 49–50; Kelly v. Blum, 2010 WL 629850, at *6 (Del. Ch. Feb. 24, 2010) 

(stating that the Court “maintains the discretion to deny summary judgment if it decides 

that a more thorough development of the record would clarify the law or its application”).

104 See generally D.I. 44.

105 Affirmative Defense ¶ 2.

106 Id. ¶ 3.

107 Id. ¶ 4.

108 Id. ¶ 9.
25

behavior, sharing confidential information, and failing to make disclosures required 

by the APA.109

After Plaintiffs and Buyer submitted their supplemental letter briefs, the 

Motion was taken under advisement on October 5.

110

II. ANALYSIS

Summary judgment may be granted if the moving party demonstrates that 

there is “no genuine issue as to any material fact” and that it is “entitled to a judgment 

as a matter of law.”111 Under Delaware law, the “proper interpretation of language 

in a contract, while analytically a question of fact, is treated as a question of law,” 

requiring the court to “make its own interpretation of the contractual language.”112 

“When interpreting a contract, the role of a court is to effectuate the parties’ 

intent.”113 “If a writing is plain and clear on its face, i.e., its language conveys an 

unmistakable meaning, the writing itself is the sole source for gaining an 

understanding of intent.”114

109 Countercl. ¶¶ 71–78.

110 See D.I. 48; D.I. 50.

111 Ct. Ch. R. 56(c).

112 Pellaton v. Bank of N.Y., 592 A.2d 473, 478 (Del. 1991) (quotation omitted).

113 Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006).

114 City Investing Co. Liquidating Tr. v. Cont’l Cas. Co., 624 A.2d 1191, 1198 (Del. 1993).
26

“Indeed, this Court has described ‘pure[] matters of contractual interpretation’ 

as ‘readily amenable to summary judgment.’”115 However, summary judgment for 

a contract interpretation “is appropriate only if the contract in question is 

unambiguous.”116 And “[s]ummary judgment will be denied when the legal question 

presented needs to be assessed in the more highly textured factual setting of a trial. 

The Court also maintains the discretion to deny summary judgment if it decides that 

a more thorough development of the record would clarify the law or its 

application.”117“Finally, the Court may award summary judgment in favor of 

a nonmoving party if it finds that the material facts are undisputed and that 

the nonmoving party is entitled to judgment as a matter of law.”118

The parties agree that the APA and Escrow Agreement (collectively, the 

“Agreements”) are unambiguous, and therefore summary judgment is the proper 

framework for enforcing their terms. Here, as the relevant facts are undisputed, the 

115 Barton v. Club Ventures Invs. LLC, 2013 WL 6072249, at *5 (Del. Ch. Nov. 7, 2013)

(quoting LaPoint v. AmerisourceBergen Corp., 2007 WL 1309398, at *3 (Del. Ch. 

May 1, 2007), aff’d, 957 A.2d 642 (Del. 2008) (TABLE)).

116 United Rentals, Inc. v. RAM Hldgs., Inc., 937 A.2d 810, 830 (Del. Ch. 2007).

117 Kelly, 2010 WL 629850, at *6 (footnote and internal quotation marks omitted) (quoting 

Schick Inc. v. Amalgamated Clothing & Textile Workers Union, 533 A.2d 1235, 1239 n.3 

(Del. Ch. 1987), and then quoting Tunnell v. Stokley, 2006 WL 452780, at *2 (Del. Ch. 

Feb. 15, 2006)). 

118 Liggett Gp. Inc. v. Affiliated FM Ins. Co., 2001 WL 1456811, at *4 (Del. Super. Ct. 

Sept. 12, 2001) (collecting cases), aff’d sub nom. Liggett Gp., Inc. v. Ace Prop. & Cas. Ins. 

Co., 798 A.2d 1024 (Del. 2002).
27

Court need only address three issues: (1) did Buyer comply with the Agreements’

notice requirements to preserve its Indemnity Claim, and if not, did Buyer breach 

the Agreements by refusing to release the Indemnity Escrow Funds; (2) did Buyer 

breach Section 2.5 of the APA by failing to timely provide a Closing Statement, and 

if so, did Buyer breach the Agreements by refusing to release the Adjustment Escrow 

Funds; and (3) does Buyer’s unclean hands defense preclude summary judgment in 

Plaintiffs’ favor? I address each in turn, and conclude that the Motion is granted and 

denied in part as to Plaintiffs, and granted in part as to Defendant.

A. Defendant, Not Plaintiffs, Is Entitled To Summary Judgment 

On Count I.

Plaintiffs claim that Defendant breached the APA by refusing to release the 

Indemnity Escrow Funds. Plaintiffs contend that Defendant did not timely notice its 

Indemnity Claim, such that the Indemnity Escrow funds were not “then claimed” 

under Section 2.8(c) and were required to be released “[p]romptly following the first 

anniversary of the Closing Date.”119 In response, Defendant argues that it did, in 

fact, properly notice its Indemnity Claim and “claim” the Indemnity Escrow Funds 

by February 7, 2020, and that in any event, Defendant substantially complied with 

the APA’s terms.120 I conclude that Defendant’s notice was adequate under the 

119 APA § 2.8(c).

120 See D.I. 24 at 32–34.
28

Agreements; that no dispute of material fact exists to that effect; and, therefore, that 

Defendant, not Plaintiffs, is entitled to summary judgment on Count I. 

Defendant seeks indemnification for Plaintiffs’ alleged breaches of the APA’s 

Non-Fundamental Representations, which are subject to a one-year survival period 

after Closing.121 The APA afforded Defendant recourse for those Non-Fundamental 

Representations to the extent any breach thereof occurred by and through 

February 7, 2020. The parties do not dispute that the alleged breaches of the NonFundamental Representations occurred before that date.

Rather, the dispute is over whether Defendant’s notice to Plaintiffs was in the 

correct manner and timely.122 Under Section 7.1 of the APA, “Survival,” the 

expiration of the survival period has no effect where “a notice of claim has been 

submitted hereunder prior to such expiration.”123 Accordingly, the reader must look 

to Section 7.5(a), “Notice of Claim,” to determine how Defendant was required to 

121 See APA § 7.1.

122 Plaintiffs also argue that Defendant’s Claim Notice is substantively deficient under the 

APA, contending it fails to allege breach of confidentiality covenants and fails to recite 

specific Losses attributable to breach of noncompete covenants. D.I. 18 at 29–31, 33–34. 

In addition, Plaintiffs argue that the proper remedy for a breach of the noncompete 

covenant is injunctive relief, not indemnification, under Section 5.7 of the APA. Id. at 33–

34 (citing APA § 5.8(b)). These substantive arguments are misplaced on the Motion. 

Count I only asserts a claim for breach of the APA with respect to the Indemnity Escrow 

Funds, and does not reach the merits of any underlying Indemnity Claim. Plaintiffs will 

have ample opportunity to address these concerns in the context of Defendant’s 

Counterclaim. See, e.g., Countercl. ¶¶ 31–44, 74–76.

123 APA § 7.1.
29

submit a notice of claim under Section 7.1.

124

 That section specifies that Defendant 

was required to “give reasonably prompt written notice to” Plaintiffs, but that 

Defendant’s indemnification right “shall not be adversely affected by a failure to 

give such notice unless, and then only to the extent that, an Indemnifying Party is 

actually and materially prejudiced thereby.”125

Thus, to notice and preserve an Indemnity Claim for breach of NonFundamental Representations under the APA, notice must be “reasonably prompt” 

and “prior to” the expiration of the survival period, but late notice only adversely 

affects indemnification rights if and to the extent that the indemnifying party was 

actually and materially prejudiced.126 That flexibility is by design. It reflects an 

agreement not to strip Defendant of an important protection based solely on a nonprejudicial delay in notice and is in keeping with the practicalities of Section 7.1’s 

survival period.127 Taken together, Sections 7.1 and 7.5(a) of the APA afford some 

temporal flexibility to Defendant when noticing and preserving Indemnity Claims. 

124 See id. §§ 7.1, 7.5.

125 Id. § 7.5(a).

126 See id. § 7.1 (noting that where a “notice of claim has been submitted hereunder prior 

to” expiration of the survival period, “such expiration shall have no effect”); id. § 7.5(a)

(noting that a failure to give notice in accordance with the terms of the APA only affects 

indemnification if there is actual and material prejudice).

127 An illustration is helpful. If Plaintiffs breached a Non-Fundamental Representation and 

Defendant learned of the breach in the survival period’s final seconds, then Defendant 

would hold a viable, unexpired claim. Assume that to preserve that claim “prior to” the 

survival period’s expiration under Section 7.1, Defendant submits reasonably prompt 

notice in a permitted manner at 11:59 p.m., before the survival period expires. But the 
30

By contrast, Section 8.1, “Notice,” provides formal and rigid manner 

requirements. For all notices under the APA to be “duly given,” Buyer must send 

the notice to the addresses and in the manner specified.128 Notice of an Indemnity 

Claim is “duly given” “(a) when delivered in person, (b) when received by facsimile, 

receipt confirmed electronically, (c) on the next Business Day when sent by 

overnight courier, or (d) on the second succeeding Business Day when sent by 

registered or certified mail (postage prepaid, return receipt requested), to the 

respective Parties at” the address specified under the APA.129

In addition to complying with the APA to preserve an Indemnity Claim, Buyer

must comply with the Escrow Agreement’s complementary requirements to seek 

escrow funds for that Indemnity Claim. As to time, Section 5 compels Buyer to give 

notice of the Indemnity Claim via a Claim Notice “prior to the expiration of the 

Escrow Period,” or no later than February 10, 2020.130 As to form, Section 16 of the 

Escrow Agreement contemplates electronic transmission other than facsimile, such 

as email, but requires the sender to “receive[] electronic evidence from the recipient

consequences of time and space cause Plaintiffs to actually receive notice at or after 12:00 

a.m., after the survival period expired. Or, alternatively, the consequences of time and 

space prevent Defendant from submitting notice until 12:01 a.m. or later, after the survival 

period expired. In either situation, Section 7.5’s flexibility preserves Defendant’s 

indemnification right, in the absence of actual and material prejudice to Plaintiffs.

128 APA § 8.1.

129 Id. § 8.1(a)–(d).

130 Escrow Agreement § 5(a).
31

of the delivery.”131 That Section also provides notice by courier service is “duly 

given and made” upon confirmation of delivery.132

On Friday, February 7, 2020, the last day to preserve a claim for breach of 

Non-Fundamental Representations, Defendant sent a Claim Notice via overnight 

express and via email to Plaintiffs’ Specified Address. Under the Escrow 

Agreement, that mailed notice was duly given on February 10, before the Escrow 

Period expired.133 Under the APA, Notice of the Indemnity Claim was “duly given” 

on the next Business Day after being sent by overnight courier: Monday, February 

10.134 While February 10 is not “prior to” the APA’s survival period’s expiration as 

facially required by Section 7.1, Defendant’s Claim Notice was still valid by the 

grace of Section 7.5. That Section dictates that Defendant’s indemnification right is 

only foreclosed by a “failure to give such notice” under Section 7.1 “unless, and then 

only to the extent that, an Indemnifying Party is actually and materially prejudiced 

thereby.”135 On the Motion, Plaintiffs have offered no evidence of actual, material 

131 Id. § 16(i).

132 Id. § 16(iii).

133 The parties do not dispute confirmation of the February 10 FedEx delivery and instead 

focus their dispute on the propriety of the February 7 email. See Answer ¶ 50; D.I. 18 at 

15–16, 23–24; D.I. 24 at 26; D.I. 27 at 13, 15 n.10. In fact, Plaintiffs agree that the Claim 

Notice “was delivered by overnight courier in accordance with subsection (c) [of APA 

Section 8.1] and received on the next business day (February 10, 2020), so the notice was 

‘deemed to have been duly given’ on February 10, 2020.” Compl. Ex. K at 3.

134 APA § 8.1(c); see also Escrow Agreement § 16(iii).

135 APA § 7.5(a).
32

prejudice, and at argument, Plaintiffs could not identify any prejudice aside from the 

alleged breaching untimely notice itself.136 In the absence of actual and material 

prejudice, Defendant’s right to be indemnified for the reasons set forth in the Claim 

Notice is unaffected by the Claim Notice’s timing.137

The Claim Notice by overnight courier was timely under both Agreements. 

By preserving its Indemnity Claim for Non-Fundamental Representations and 

submitting a Claim Notice for the entirety of the Indemnity Escrow Funds within 

these parameters,138 Defendant rendered the Indemnity Escrow Funds “then 

claimed” for purposes of Section 2.8(c), such that Plaintiffs were not entitled to 

distribution of the Indemnity Escrow Funds “[p]romptly following the first 

136 See, e.g., Hr’g Tr. at 12 (“But here, in particular, because the difference in strict 

compliance versus substantial compliance means this ultimately determines whether 

defendant’s notice was timely or not and, therefore, whether sellers were entitled to 

disbursement or not, it really can’t be said that there is a lack of prejudice.”).

137 In briefing, Plaintiffs sought summary judgment on the grounds that even proper notice 

could not preserve a claim for breach of a Non-Fundamental Representation beyond 

Section 7.1’s survival period of twelve months after the closing date, and that the survival 

period served as a statute of limitations for filing an action for breach. D.I. 18 at 25–29. 

Plaintiffs also contended that proper notice could only extend Buyer’s time to file an action 

for breach for thirty days under Section 7.5(d)’s dispute resolution provision. Id. at 28. 

But at argument, Plaintiffs agreed that a Claim Notice that satisfied the notice requirements 

would preserve the subject claim, and that the Indemnity Escrow Funds could remain in 

escrow and available pending adjudication of the claim beyond the survival period. Hr’g 

Tr. 16–17. I need not address this argument further.

138 The Claim Notice asserted that Defendant’s “damages exceed the amounts held in 

escrow.” Compl. Ex. J at 10.
33

anniversary of the Closing Date.”139 Summary judgment on Count I is accordingly 

entered in Defendant’s favor.

The Indemnity Escrow Funds were to remain in Escrow pending completion 

of the procedures in Section 7.5(d), which required the parties to consult in good 

faith and fail before initiating a lawsuit.140 Seller disputed the Indemnity Claim 

within ten days of receiving notice, as required by the APA, and after the parties 

could not resolve the dispute within thirty days, Defendant properly asserted its 

claims in this Court via its Counterclaim.141 The substantive issues underlying the 

Indemnity Claim have been raised via Defendant’s Counterclaim. Release of the 

Indemnity Escrow Funds is deferred pending a final judgment in this action.142 Upon 

adjudication of the Counterclaim, the Court will determine any “valid” claim to the 

Indemnity Escrow Funds, and thereafter payment, if any, shall be made in 

accordance with the APA from any validly “claimed” Indemnity Escrow Funds

within thirty days.143

139 APA § 2.8(c). Assuming that the Claim Notice did not request payment of all Indemnity 

Escrow Funds, Seller would have been entitled to disbursal of any non-claimed portion 

under Section 2.8(c).

140 See id. § 7.5(d); see also id. § 7.5 (b) & (c).

141 See Compl. Exs. K & L; APA § 7.5(d).

142 Any damages can be handled through an offset before entry of a final judgment in this 

matter.

143 See APA §§ 2.8(c), 7.5(a)–(d).
34

B. Plaintiffs Are Entitled To Summary Judgment On Count II.

I now turn to Plaintiffs’ Motion on Count II, which seeks the Adjustment 

Escrow Funds on the grounds that Defendant’s untimely Closing Statement breached 

the APA. The APA specifies rigid requirements for delivering the Closing 

Statement. Section 2.5(b) obligated Defendant to deliver the Closing Statement 

within ninety days of Closing, by May 8, 2019. Defendant’s obligation to do so was 

mandatory and unconditional. There is no dispute—and in fact, Defendant 

concedes—that it did not deliver the Closing Statement by that date.144 Defendant 

delivered the Closing Statement on July 3.

Defendant asserts Plaintiffs waived their right to a timely Closing Statement, 

and that Defendant needs discovery into Plaintiffs’ performance under the APA to 

meaningfully assert an unclean hands defense against Count II, such that summary 

judgment is premature. As discussed below, Defendant’s arguments regarding the 

Adjustment Escrow Funds fail. Summary judgment is granted in Plaintiffs’ favor, 

as Defendant breached the APA and waived its right to a post-Closing adjustment. 

But the Adjustment Escrow Funds shall remain in escrow pending a final judgment.

144 See Answer ¶ 28 (“Defendant admits that it did not deliver a Closing Statement by 

May 8, 2019.”).
35

1. Plaintiffs Did Not Waive The Right To A Timely 

Closing Statement.

Defendant contends that Plaintiffs’ June 24 Letter waived the Closing 

Statement deadline by demanding delivery of the Closing Statement by July 5. 

Defendant also asserts that “[t]o the extent Plaintiffs dispute the plain intention of 

that letter, this is a question of fact that precludes the entry of partial summary 

judgment (requiring, at a minimum, discovery regarding the drafting of the letter and 

any communications regarding the same).”145

Defendant’s position is unsupported by Delaware law, the plain language of 

the APA and June 24 Letter, and Seller’s conduct. “[U]nder Delaware law, a waiver

is found where a party had actual or constructive notice of a known right, and that 

the party voluntarily and intentionally relinquished that known right.”146 It “implies 

knowledge of all material facts, and intent to waive.”147 “Waivers of contractual 

rights are not lightly found,” as a waiver “must be unequivocal.”148 Further, under 

the APA, the parties agreed that “[a]ny failure or delay of a Party to comply with 

145 D.I. 50 at 1–2.

146 Ashall Homes Ltd. v. ROK Ent. Gp. Inc., 992 A.2d 1239, 1247 (Del. Ch. 2010) 

(alterations, footnote, and internal quotation marks omitted) (quoting Danvir Corp. v. City 

of Wilm., 2008 WL 4560903, at *7 (Del. Ch. Oct. 6, 2008)).

147 James J. Gory Mech. Contr., Inc. v. BPG Residential P’rs V, LLC, 2011 WL 6935279, 

at *3 (Del. Ch. Dec. 30, 2011) (quoting Wimbledon Fund LP–Absolute Return Fund Series 

v. SV Special Situations Fund LP, 2010 WL 2368637, at *4 (Del. Ch. June 14, 2010)).

148 Id. (alteration omitted) (quoting Wimbledon Fund LP–Absolute Return Fund Series, 

2010 WL 2368637, at *4).
36

any obligation herein may be waived only by a written instrument signed by the 

Party against whom the waiver is to be effective,” and “[a]ny such waiver or failure 

to insist upon strict compliance with such obligation shall not operate as a waiver of, 

or estoppel with respect to, any subsequent or other failure.”149

After the May 8 deadline to submit the Closing Statement passed, Plaintiffs 

informed Defendant that the deadline had lapsed.150 After more time passed without 

Defendant submitting the Closing Statement, Plaintiffs again pointed out that the 

deadline lapsed and stated that Sellers would be forced to take legal action with 

respect to Defendant’s failure to satisfy its obligations under Section 2.5 of the 

APA.151 The June 24 Letter reiterated this position and, importantly, expressed 

Plaintiffs’ belief that “SGI Genetics, Inc. [Buyer] is in default of, has breached and 

continues to breach and be in default of the Asset Purchase Agreement.”152 Plaintiffs 

indicated their willingness to move forward with Section 2.5’s price adjustment 

process and afforded Defendant until July 5 to comply with the APA. But still, the 

June 24 Letter preserved Plaintiffs’ position and claim that Defendant breached as 

of May 8.153 

149 APA § 8.5.

150 See Compl. Exs. C, D, E.

151 See, e.g., Compl. Ex. E.

152 Compl. Ex. F at 2.

153 See id.
37

On this record, Plaintiffs did not waive the Closing Statement deadline, nor is 

there any genuine issue of material fact with respect to the same that precludes 

summary judgment. The parties negotiated for a strict express waiver provision, 

requiring written authorization by the opposing party to deviate from the APA’s 

terms.

154

 The June 24 Letter did not grant such an express waiver to Defendant, in 

view of its express assertion that Defendant had been and continued to be in breach 

of the APA.155 Nothing in the June 24 Letter amounted to an unequivocal intention 

to waive Plaintiffs’ claims. Because Defendant failed to deliver the Closing 

Statement by May 8 as required, Plaintiffs are entitled to a determination on the 

154 See APA § 8.5.

155 Nor does Plaintiffs’ good faith attempt to carry out Section 2.5’s procedures, as required, 

excuse Defendant’s noncompliance with its obligation to deliver the Closing Statement by 

May 8, 2019. See APA § 2.5(c) (mandating that the parties attempt to resolve price 

adjustment disputes in good faith); id. § 5.1(a) (stating that “the Parties will use their 

respective commercially reasonable efforts to take all action and to do all things necessary 

to consummate and make effective the transactions contemplated by this Agreement”). In 

the interactions following that deadline, Plaintiffs explained that Defendant’s untimeliness 

violated the APA and reserved their right to file this exact claim. Defendant failed to follow 

Plaintiffs through Section 2.5’s process in good faith, yet again upsetting the parties’ 

agreed-to and carefully timed process. When the parties clearly could not resolve the 

Disagreements with respect to the untimely Closing Statement within twenty-five days, 

Plaintiffs asked in good faith that the parties submit Plaintiff’s Disagreements with respect 

to the untimely Closing Statement to an independent accountant as required under Section 

2.5(c). After being met with Defendant’s persistent silence, Plaintiffs again asked in good 

faith to submit the Disagreement to an independent accountant, but warned that 

Defendant’s failure to move forward would result in Court action. See Compl. Exs. H, I.
38

Motion that Defendant breached Section 2.5 of the APA and corresponding 

provisions of the Escrow Agreement.156 

2. Defendant’s Unclean Hands Defense Does Not 

Foreclose Summary Judgment.

Although agreeing that the APA is unambiguous and the relevant facts are 

undisputed, Defendant argues that genuine issues of material fact exist as to whether 

Plaintiffs materially breached the APA, and so Plaintiffs cannot enforce it against 

Defendant. Specifically, Defendant perceives such issues regarding whether certain 

information Schillinger shared with third parties is protectable confidential 

information under the APA; whether Plaintiffs made misrepresentations about value; 

156 Defendant also argues that the APA’s requirement under Section 2.5(a) that Plaintiffs 

provide a “reasonable, good faith calculation of an estimate” of the accounts payable of the 

Company and its subsidiaries was a condition precedent to its obligation to deliver the 

Closing Statement under Section 2.5; that Plaintiffs failed to do so; and that, therefore, 

summary judgment should be denied. See D.I. 24 at 28–29. Vice Chancellor Laster 

addressed and rejected a similar argument, brought by an affiliate of Defendant here, in 

J&J Produce Holdings, Inc. v. Benson Hill Fresh, LLC, 2020 WL 1188052 (Del. Ch. Mar. 

11, 2020) (ORDER), appeal dismissed without prejudice, 234 A.3d 161 (Del. 2020)

(TABLE). There, the buyer argued that the seller breached the relevant agreement by not 

preparing an Estimated Closing Statement using reasonable, good faith estimates, and that 

therefore the buyer was absolved of its failure to timely submit a Closing Statement. Id. at 

*3. The Court rejected this position, reasoning that even if the buyer were correct in its 

assumptions, it failed to identify or explain the failures with regard to the estimates used to 

calculate the Estimated Closing Statement in a manner that would raise a material dispute 

of fact. Id. at *3–4. This logic applies with equal force here. The relevant provisions of 

the agreement in J&J Produce are very similar to those at issue in the APA. Compare id.

at *3–4, with APA § 2.5. And while cast as failing to perform a condition precedent, 

Defendant has failed to explain how Plaintiffs’ alleged failure to provide a reasonable, good 

faith calculation of an estimate of the accounts payable raises a material dispute of fact as 

to whether Defendant prepared its Estimated Closing Statement under Section 2.5(a) in 

good faith. Plaintiffs remain entitled to summary judgment on Count II.
39

whether Plaintiffs failed to disclose material contracts; and other problems. 

Although these potential shortcomings ultimately appeared in Defendant’s 

Counterclaim, in opposing the Motion, Defendant categorizes them as unclean hands 

that would preclude Plaintiffs from seeking their requested relief.157 And so in its 

Rule 56(f) affidavit, Defendant asserts that discovery is needed to develop that 

defense and that the issues bearing on that defense involve genuine disputes of 

material fact that preclude summary judgment. 

“[A] party opposing summary judgment may, pursuant to Court of Chancery 

Rule 56(f), request limited discovery if it cannot present facts essential to oppose the 

summary judgment motion. Normally, Rule 56(f) comes into play when the party 

opposing summary judgment cannot state certain facts essential to justify its position 

because those facts are within the exclusive knowledge of the moving party.”158 The 

invoking party carries the burden under Rule 56(f) to show that it could not present 

facts essential to oppose the motion for summary judgment.159 However, “[t]he Rule 

157 See Rue 56 Aff. ¶¶ 10, 12.

158 Corkscrew Mining Ventures, Ltd. v. Preferred Real Estate Invs., Inc., 2011 WL 704470, 

at *3 (Del. Ch. Feb. 28, 2011) (footnote omitted).

159 See, e.g., K&K Screw Prod., L.L.C. v. Emerick Cap. Invs., Inc., 2011 WL 3505354, at 

*18 (Del. Ch. Aug. 9, 2011).
40

56 opportunity to present affidavits or engage in discovery is not absolute. It is 

necessarily circumscribed by the discretion of the trial court . . . .”160

The Court has permitted discovery pursuant to a Rule 56(f) affidavit where 

the party opposing summary judgment “claimed that several of its affirmative 

defenses required the support that discovery might yield.”161 But while purported 

need to conduct discovery into an affirmative defense may be sufficient to meet the 

invoking party’s burden under Rule 56(f), the Court will not permit discovery where 

that party “ha[s] failed to identify any specific discovery that would inform the 

Court’s consideration of their affirmative defenses.”162 More importantly, the Court 

has denied a request for discovery under Rule 56(f) where the evidence sought would 

be “irrelevant” in light of applicable law.163

160 Malpiede v. Townson, 780 A.2d 1075, 1091 (Del. 2001); see also Salzman v. Canaan 

Cap. P’rs, 1996 WL 33167788, at *2 (Del. Ch. Apr. 19, 1996) (“A Rule 56(f) motion is 

designed to permit the Court, in the exercise of its discretion, to deny entry of judgment or 

withhold decision on a pending summary judgment motion to permit limited discovery, all 

with the expectation that limited discovery will clarify or eliminate disputed issues of 

fact.”).

161 3Com Corp. v. Diamond II Hldgs., Inc., 2010 WL 2280734, at *1 (Del. Ch. 

May 31, 2010).

162 Quantlab Gp. GP, LLC v. Eames, 2019 WL 1285037, at *7 (Del. Ch. Mar. 19, 2019),

aff’d, 222 A.3d 580 (Del. 2019) (TABLE).

163 Salzman, 1996 WL 33167790, at *1 (citing A.I. Credit Corp. v. Liberty Mut. Ins. Co., 

1996 WL 3962, at * (S.D.N.Y. Jan. 4, 1996) (denying Rule 56(f) application where the 

evidence sought to be obtained was irrelevant in light of the court’s decision on dispositive 

issues)); see also Ch. Ct. R. 1 (stating the rules “shall be construed, administered, and 

employed by the Court and the parties, to secure the just speedy and inexpensive 

determination of every proceeding”).
41

These principles are colored by Vice Chancellor Laster’s holding in in J&J 

Produce, Inc. v. Benson Hill Fresh, LLC.

164

 The buyer in that case was an affiliate 

of Buyer here, and was bound by an agreement with terms very similar to the APA’s. 

There, as here, the buyer claimed that there were genuine issues of fact about 

whether the seller breached its obligations under the purchase agreement and “about 

whether the Seller’s conduct rises to the level of reprehensibility to warrant the 

unclean hands bar on its claim.”165 The Court rejected this position and concluded 

that the buyer’s unclean hands defense did not preclude summary judgment. “The 

purpose of the unclean hands doctrine is to protect the public and the court against 

misuse by one who, because of his conduct, has forfeited his right to have the court 

consider his claims . . . .”166 “The Court of Chancery has broad discretion in 

determining whether to apply the doctrine of unclean hands.”167 And in certain 

circumstances, an unclean hands defense will fail when applying it or allowing it to 

impede summary judgment would eschew well-settled principles of Delaware 

164 2020 WL 1188052, at *4.

165 Id. (alteration and internal quotation marks omitted).

166 Id. (alterations omitted) (quoting Skoglund v. Ormand Indus., Inc., 372 A.2d 204, 213 

(Del. Ch. 1976)).

167 Id. (quoting SmithKline Beecham Pharm. Co. v. Merck & Co., 766 A.2d 442, 448 (Del. 

2000)).
42

contract law.168 In view of these principles and general principles of contract law, 

Vice Chancellor Laster rejected the buyer’s unclean hands defense:

Although the Buyer frames its argument as an unclean hands defense, 

the Buyer essentially is asking this court to excuse its nonperformance 

because of the Seller’s own breaches of the representations and 

warranties, which the Buyer characterizes as willful. The Buyer, 

however, currently is seeking indemnification under the Agreement for 

those breaches. A party may be excused from performance under a 

contract if the other party is in material breach thereof. But a party may 

not refuse to perform its contractual obligations after a material breach 

while simultaneously retaining the benefits of a contract. The Buyer 

therefore cannot seek indemnification under the contract while at the 

same time claiming that the Agreement was vitiated because of the 

Seller’s material breach. These well-settled principles of Delaware law 

foreclose the unclean hands defense. Notably, this outcome does not 

leave the Buyer without a remedy. It rather consigns the Buyer to the 

remedy it bargained for (indemnification), while denying the Buyer the 

self-help remedy that did not bargain for and yet invoked (frustration 

of the Adjustment mechanism).169

Here, Defendant has elected to pursue its Indemnity Claim with respect to the 

same issues that underlie its unclean hands defense. Defendant cannot pursue its 

Indemnity Claim under the APA while simultaneously relying on Plaintiffs’ alleged 

breaches to excuse its own non-performance. Rather, the proper course of action is 

168 See id.

169 Id. (citations and internal quotation marks omitted) (quoting Post Hldgs., Inc. v. NPE 

Seller Rep LLC, 2018 WL 5429833, at *5 (Del. Ch. Oct. 29, 2018) (holding that a party’s 

election to pursue indemnification required the party to “continue to be bound by and to 

perform under the contract as well”)).
43

to permit both parties to pursue their respective breach allegations through the 

appropriate and contractually agreed-upon channels.

3. Defendant Has Waived Its Right To A PostClosing Adjustment, But The Adjustment 

Escrow Funds Shall Remain In Escrow Pending 

A Final Judgment.

As a remedy for Defendant’s breach, Plaintiffs seek a declaration that 

Defendant has waived its right to a post-Closing adjustment and immediate release 

of the Adjustment Escrow Funds. Vice Chancellor Laster also addressed this issue 

in J&J Produce.

170

 In that case, the Court found the defendant buyer breached the 

governing agreement by failing to submit a Closing Statement.171 When considering 

the appropriate remedy, the Court expressly rejected the buyer’s contention that the 

Court should simply order the buyer to provide a Closing Statement and require the 

parties to complete the agreement’s price adjust process, as “[t]hat result would 

reward the Buyer for its breach.”172 The Court determined that “[t]he more fitting 

contractual remedy is to deem the Buyer to have waived its right to the determination 

of the Final Adjustment Amount” because “[b]y failing to provide a Closing 

Statement, the Buyer prevented the Final Adjustment Amount from being 

determined in a timely fashion in accordance with the procedures set forth in the 

170 Id. at *2–3.

171 Id. at *2.

172 Id.
44

Agreement” and “thereby gave up its opportunity to have a Final Adjustment 

Amount that potentially came out in its favor.”173 And so under that agreement’s 

post-closing adjustment process, which was nearly identical to Section 2.5 of the 

APA,174 the Court determined that the buyer waived its right to post-closing price 

adjustment, that the Final Adjustment Amount was therefore deemed to be zero, and 

that the seller was entitled to any Adjustment Escrow Funds.175 

This logic applies with equal force here, despite the fact that Defendant 

ultimately submitted a Closing Statement claiming to calculate a negative 

adjustment of $80,219.04. By submitting a Closing Statement too late, Defendant 

forfeited its right to a post-Closing adjustment and determination of the Final 

Adjustment Amount, and so the Final Adjustment Amount shall be deemed zero.176 

As in J&J Produce, to hold otherwise would reward Defendant for its breach—even 

more so here, where Defendant’s Closing Statement seeks an adjustment in its 

173 Id.

174 Compare id. at *2–3, with APA § 2.5(d)–(h).

175 See J&J Produce, 2020 WL 1188052, at *2–3.

176 See id. (explaining the basis for forfeiture and deeming the Final Adjustment Amount 

to be zero, “[w]ith apologies to mathematicians”).
45

favor.177 Under the APA and principles of logic, Seller is entitled to the Adjustment 

Escrow Funds.178 Plaintiffs are entitled to a declaration to that effect.

This outcome fulfills the parties’ expectations, which treated those funds as 

part of the baseline consideration for the deal. The Adjustment Escrow Funds were 

placed in escrow as security for an Adjustment that benefitted Buyer; otherwise, they 

would go to Seller. Because Buyer frustrated the determination of the Final 

Adjustment Amount by breaching its obligation to timely deliver the Closing 

Statement, the proper award of expectancy damages is to provide Seller with the 

baseline consideration to which the Seller was entitled; that amount is reflected by 

the Adjustment Escrow Funds.179

177 See id. From this reasoning, Defendant’s argument that “Plaintiffs suffered no prejudice 

from any delay as they were and are able to review the Closing Statement and object to the 

calculations contained therein” is unpersuasive. D.I. 24 at 26. The parties agreed to the 

APA’s temporal requirements for the Closing Statement. They bargained for that ninetyday window with the expectation that they would know of their final financial positions 

under the APA shortly after Closing. Defendant’s tardiness breached Plaintiffs’ bargainedfor right, especially in the face of Plaintiffs’ numerous communications alerting Defendant 

that the Closing Statement was overdue in violation of the APA. Accordingly, the Court’s 

determination is unchanged by Defendant’s assertions that Defendant’s untimely Closing 

Statement was substantively adequate.

178 See J&J Produce, 2020 WL 1188052, at *2–3. The APA contemplated a baseline 

outcome in which Seller received the Adjustment Escrow Funds as part of the transaction 

consideration. APA § 2.5(e). If the Final Adjustment amount is zero, or less than $50,000 

in either direction, Seller would receive the Adjustment Escrow Funds. See id. § 2.5(e), 

(f), (g), (h).

179 See J&J Produce, 2020 WL 1188052, at *3.
46

In view of this determination, Plaintiffs request an order requiring specific 

performance and directing Defendant to immediately direct release the Indemnity 

Escrow Funds pursuant to Section 2.8(b). This Court could issue such an order.180 

And the APA contemplates such an equitable remedy and prompt release of the 

Adjustment Escrow Funds following determination of the Final Adjustment 

Amount.181 “But the court is not obligated to issue a decree of specific performance, 

which remains a matter of discretion.”

182

 

J&J Produce is instructive yet again. Vice Chancellor Laster concluded that, 

although the seller was entitled to the Adjustment Escrow Funds, “[e]ntering a 

decree of specific performance at this stage on the basis set forth in this order likely 

would trigger a series of unproductive procedural moves and countermoves.”183 The 

same is true here. As a matter of judicial economy, a series of potential and 

180 See id. at *5 (citing QC Hldgs., Inc. v. Allconnect, Inc., 2018 WL 4091721, at *11 (Del. 

Ch. Aug. 28, 2018), and also citing Sparton Corp. v. O’Neil, 2018 WL 3025470, at *4 (Del. 

Ch. June 18, 2018)).

181 See APA § 8.9(a) (“In the event that any party violates or fails or refuses to perform any 

covenant or agreement made by such party herein, the non-breaching party shall be entitled, 

in addition to the exercise of other remedies, to seek and (subject to court approval) obtain 

injunctive and other equitable relief . . . .”); id. § 2.5(e) (requiring release of the Adjustment 

Escrow Funds to Seller if the Final Adjustment Amount is deemed zero); id. § 2.5(h) 

(requiring prompt release of the Adjustment Escrow Funds to Seller within five days after 

determination of the Final Adjustment Amount); id. § 2.8(c) (requiring funds that are not 

“then claimed” by Buyer under Section 2.5 to be released to Seller within the later of ninety 

days after Closing or five days after determination of the Final Adjustment Amount).

182 J&J Produce, 2020 WL 1188052, at *5 (citing Kan. City S. v. Grupo TMM, S.A., 2003 

WL 22659332, at *5 (Del. Ch. Nov. 4, 2003)).

183 Id.
47

disruptive appeals “can be avoided by denying the request for the decree and 

allowing the Adjustment Escrow Funds to remain in escrow until the end of the 

case.”184 That approach facilitates the speedy resolution of this matter, and 

considering the timeline of this dispute to date, 

[i]t seems unlikely that the Seller will suffer any harm from having the 

Adjustment Escrow Funds remain in escrow pending the entry of a final 

judgment. Under the arrangements for the Adjustment Escrow Funds, 

the Seller will earn interest in the interim. Because the Buyer’s breach 

occurred on [May 8, 2019,] when it failed to deliver a timely Closing 

Statement, the Seller became entitled to the Adjustment Escrow Funds 

as of that date. The Seller’s lost time value of money can be addressed 

through an interest award. Because the Adjustment Escrow Funds will 

earn some return in the interim, any interest award will take that amount 

into account.185

Plaintiffs’ Motion is therefore granted with respect to Count II, and the Court will 

enter an order that Buyer breached its obligation to provide the Closing Statement, 

foreclosing the Buyer from obtaining a determination of the Final Adjustment 

Amount and entitling Seller to the Adjustment Escrow Funds. But release of the 

Adjustment Escrow Funds is deferred pending a final judgment in this matter. 

III. CONCLUSION

For the foregoing reasons, summary judgment on Count I is GRANTED in 

Defendant’s favor, and summary judgment on Count II is GRANTED in Plaintiffs’ 

184 Id.

185 Id.
48

favor. The parties shall submit an implementing order within twenty days of this 

decision.