Opinion ID: 2180498
Heading Depth: 2
Heading Rank: 3

Heading: Waiver of the Timing Requirement for the Immediate Payment of the Entire AeroGlobal Bridge Loan

Text: At the heart of AeroGlobal's case is its claim that the defendants breached Section 4.d of the AeroGlobal LOI (the Exclusive Negotiations Provision) by negotiating the Cirrus-Crescent stock acquisition while at the same time Cirrus purported to honor the AeroGlobal LOI. [65] Cirrus responded that it was not required to comply with the Exclusive Negotiations Provision because AeroGlobal breached Section 1.a of the AeroGlobal LOI (the Timing Requirement) by failing to immediately pay the full $15 million bridge loan. [66] In essence, Cirrus is claiming that the Timing Requirement was an exception to the applicability of the Exclusive Negotiations Provision. The Superior Court agreed, and granted summary judgment in favor of the defendants. It held that the Exclusive Negotiations Provision was not binding on the parties because AeroGlobal failed to fulfill its obligations under the AeroGlobal LOI by withholding the remaining $3 million installment on the bridge loan. The Superior Court concluded that Cirrus was therefore free to negotiate for the needed financing with any party it deemed appropriate. Intention forms the foundation of the doctrine of waiver, and an intention to waive must appear clear from the record evidence before summary judgment is granted on this issue. [67] The dispute in this case centers on whether Cirrus intended to waive the Timing Requirement. The question of Cirrus's intent in the instant case depends on a consideration of the facts surrounding Cirrus and AeroGlobal's dealings after CHCL initiated the Court of Chancery action. The record shows that Cirrus accepted the $12 million portion of the bridge loan for its benefit without demanding payment of the remaining $3 million. Cirrus promptly used that amount to repay a $4 million loan that Crescent had extended. Cirrus also attempted to use this amount to pay the $5 million break up fee under the CHCL SPA, but this payment was refused by Crescent. Cirrus used the remaining funds as working capital. In deciding CHCL's action seeking injunctive relief, the Court of Chancery found that AeroGlobal's deferral of the remaining $3 million bridge loan payment was due entirely to the pendency of this [preliminary injunction] motion and a resultant understanding between Cirrus and AeroGlobal that the completion of the funding [of the bridge loan] should be delayed pending its outcome. [68] The Court of Chancery made this finding on a record similar to what was before the Superior Court in this case. The record also shows that Alan Klapmeier explicitly acknowledged that the agreement with AeroGlobal remained in full force and effect. When Cirrus began to consider other financing options after AeroGlobal deferred payment of the remaining $3 million of the bridge loan, Alan Klapmeier told the Cirrus board that the Exclusive Negotiations Provision remained in effect and prohibited such conduct regardless of AeroGlobal's deferral. We conclude that it was for the trier of fact to decide whether Cirrus's conduct under the circumstances of this case evidenced an intentional, conscious and voluntary abandonment of its claim or right. [69] Where the inference or ultimate fact to be established concerns intent or other subjective reaction, summary judgment is ordinarily inappropriate. [70] On the record before us we hold that a waiver was a permissible inference that could reasonably be drawn from the evidence. It was error to grant summary judgment in the face of this material dispute of fact.