Court Opinion

ID: 4171053
Source: CourtListenerOpinion
Date Created: 2017-05-23 18:09:53.360886+00
Date Added: 2024-06-11T09:36:39.202800
License: Public Domain

COURT OF CHANCERY
                                          OF THE
                                   STATE OF DELAWARE

ANDRE G. BOUCHARD                                             Leonard L. Williams Justice Center
      CHANCELLOR                                               500 N. King Street, Suite 11400
                                                              Wilmington, Delaware 19801-3734

                             Date Submitted: March 21, 2017
                              Date Decided: May 23, 2017

 Edward B. Micheletti, Esquire                 David E. Ross, Esquire
 Cliff C. Gardner, Esquire                     Eric D. Selden, Esquire
 Matthew P. Majarian                           Nicholas D. Mozal, Esquire
 Skadden, Arps, Slate, Meagher                 Ross Aronstam & Moritz LLP
  & Flom LLP                                   100 S. West Street, Suite 400
 920 North King Street                         Wilmington, DE 19801
 Wilmington, DE 19899

          RE:      United BioSource LLC v. Bracket Holding Corp.
                   Civil Action No. 12886-CB
 Dear Counsel:

          This letter constitutes the Court’s decision on plaintiff United BioSource

 LLC’s motion for summary judgment on its Verified Complaint for Specific

 Performance (the “Complaint”) and defendant Bracket Holding Corp.’s motion to

 dismiss the Complaint. For the reasons explained below, plaintiff’s motion for

 summary judgment is granted and defendant’s motion to dismiss is denied.

 I.       Background

          Plaintiff United BioSource LLC (“UBC”) is a Delaware limited liability

 company with its primary place of business in Blue Bell, Pennsylvania.                   Its

 ultimate parent company is Express Scripts, Inc., a major healthcare company.
Defendant Bracket Holding Corp. (“Bracket”) is a Delaware corporation with its

headquarters in Wayne, Pennsylvania. Bracket provides scientific, technical and

operational support to pharmaceutical firms in connection with clinical trials and

other research.1

          On July 12, 2013, UBC and Bracket entered into a Securities Purchase

Agreement (“SPA”), pursuant to which Bracket purchased all “equity interests and

ownership interests” in three subsidiaries of UBC (as defined in the SPA, the

“Companies”) and three subsidiaries of the Companies (as defined in the SPA, the

“Company Subsidiaries”).2            One of the Company Subsidiaries that Bracket

purchased as part of the transaction (the “Transaction”) is P-Star Acquisition Co.,

Inc. (“P-Star”).3

          Section 2.6(e) of the SPA governs the handling of certain tax refunds

relating to pre-closing periods that may be received after the Transaction’s closing.

It states, in relevant part, that:

          Except to the extent included as a current asset on the Final Statement
          pursuant to Section 2.5, any cash Tax refunds (or a credit in lieu of a
          cash refund) and interest paid thereon by a Governmental Authority
          received by the Buyer, any of the Companies or any of the Company
          Subsidiaries, or to which the Buyer, any of the Companies or any of
          the Company Subsidiaries become entitled, that relate to Pre-Closing
          Periods or the portion of the Straddle Period ending at the Effective

1
    Compl. ¶¶ 11-12.
2
    Id. ¶ 1 & Ex. 1, at 1, 4.
3
    Id. ¶ 20.

                                             2
          Time shall be for the account of Parent, and the Buyer shall pay over
          to Parent any such Tax refund and interest or the amount of any such
          credit within fifteen (15) days after receipt or entitlement thereto, net
          of (1) any reasonable costs associated with obtaining such refund, (2)
          any applicable withholding Taxes required to be withheld on such
          payment, and (3) any Taxes incurred in respect of the receipt or
          payment of such refund. . . . In the event the Buyer or Parent, as
          applicable fails to pay to the other party any such amounts due under
          this Section 2.6(e) within the time period specified, the Buyer or
          Parent, as applicable, shall pay, in addition to the amounts due,
          interest on such amount, compounded annually, calculated using a
          365 day year from the date of receipt or entitlement thereto through
          the date prior to the date of payment at the prime lending rate of Bank
          of America, N.A. as in effect as of the date of receipt or entitlement
          thereto.4

          On August 5, 2016, P-Star received a tax refund in the amount of

$4,566,646.88 from the Pennsylvania Department of Revenue (the “Tax Refund”).5

          On September 22, 2016, Bracket sent a letter to UBC notifying it that P-Star

had received the Tax Refund, which was “for the periods of April 1, 2012 through

December 31, 2012 and January 1, 2013 through August 14, 2013.”6 The letter

further stated that: “Bracket (through P-Star) is holding these funds in a separate

interest bearing account during the pendency of its lawsuit against UBC and

[Express Scripts, Inc.] currently pending in the Delaware Superior Court.”7

4
  Id. Ex. 1 § 2.6(e). Buyer is defined in the SPA to mean “Bracket,” and Parent is defined
in the SPA to mean “UBC.” See id. Ex. 1 at 1.
5
    Id. ¶ 19.
6
    Id. ¶ 28 & Ex. 2.
7
    Id. Ex. 2.

                                             3
          On October 18, 2016, UBC sent Bracket a “Notice of Claim and Intent to

Seek Specific Performance.” It demanded that Bracket “pay over to [UBC] the

Tax Refund and all additional funds, including interest,”8 but Bracket refused to do

so.9

          On November 8, 2016, UBC filed the Complaint in this action, asserting a

single claim for specific performance. Specifically, the Complaint asserts that

Bracket “breached Section 2.6(e) of the SPA by failing to forward the

Pennsylvania Tax Refund to UBC within fifteen days of P-Star’s receipt thereof,”

and seeks “an order of specific performance compelling Bracket to immediately

forward the Pennsylvania Tax Refund to UBC pursuant to the terms of Section

2.6(e) of the SPA.”10

          On December 6, 2016, UBC filed a motion for summary judgment seeking

entry of an order to require Bracket to immediately forward the Tax Refund to

UBC. That same day, Bracket filed a motion to dismiss under Court of Chancery

Rule 12(b)(6) for failure to state a claim for relief. Oral argument on both motions

was heard on March 7, 2017, during which the Court requested supplemental

submissions, which were provided on March 21, 2017.

8
    Id. ¶ 32 & Ex.3.
9
    Id. ¶ 33.
10
     Id. ¶¶ 40, 44.

                                          4
II.      Analysis

         A.     Subject Matter Jurisdiction

         The Court of Chancery is a court of limited jurisdiction and “[w]henever it

appears by suggestion of the parties or otherwise that the Court lacks jurisdiction

of the subject matter, the Court shall dismiss the action.”11 The Court “can acquire

subject matter jurisdiction over a cause in only three ways, namely, if: (1) one or

more of the plaintiff’s claims for relief is equitable in character, (2) the plaintiff

requests relief that is equitable in nature, or (3) subject matter jurisdiction is

conferred by statute.”12 “Equitable jurisdiction must be determined from the face

of the complaint as of the time of filing, with all material factual allegations

viewed as true.”13 In determining jurisdiction, this Court

         will take a practical view of the complaint, and will not permit a suit
         to be brought in Chancery where a complete legal remedy otherwise
         exists but where the plaintiff has prayed for some type of traditional
         equitable relief as a kind of formulaic “open sesame” to the Court of
         Chancery. A practical analysis of the adequacy of any legal remedy,
         then, must be the point of departure for each matter which comes
         before this Court.14

         Bracket argues that UBC has an adequate remedy at law because what UBC

really seeks to gain from this action is the payment of a monetary sum, and thus

11
     Ch. Ct. R. 12(h)(3).
12
  Candlewood Timber Gp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989, 997 (Del.
2004).
13
     Int’l Bus. Machs. Corp. v. Comdisco, Inc., 602 A.2d 74, 78 (Del. Ch. 1991).

                                              5
this Court does not have equitable jurisdiction over UBC’s claim. 15 In response,

UBC first points to the parties’ stipulation in Section 10.14 of the SPA that:

           (a) The Parties hereto agree that irreparable damage would occur if
           any provision of this Agreement were not performed in accordance
           with the terms hereof and that, . . . the Parties shall be entitled,
           without posting a bond or similar indemnity, to an injunction or
           injunctions to prevent breaches of this Agreement or to enforce
           specifically the performance of the terms and provisions hereof in any
           court as specified in Section 10.10, in addition to any other remedy to
           which they are entitled at law or equity.

           ...

           (c) Each of the parties agrees that it will not oppose the granting of an
           injunction, specific performance and other equitable relief (if the
           applicable conditions with respect thereto have been satisfied
           hereunder) on the basis that (x) the other party has an adequate
           remedy at law or (y) an award of specific performance is not an
           appropriate remedy for any reason at law or equity.16

           Bracket counters that the “irreparable damage” stipulation in Section 10.14

is not as broad as UBC argues because Section 9.8 of the SPA allegedly limits the

kind of equitable relief that UBC could seek to that which is “non-monetary” in

nature. According to Bracket, the specific performance remedy that UBC seeks

14
     Id.
15
  Although Bracket challenged the basis for UBC’s request for specific performance as
part of its motion to dismiss under Court of Chancery Rule 12(b)(6) on the theory that an
adequate remedy at law is available, Bracket did not move to dismiss this action under
Rule 12(b)(1) for lack of subject matter jurisdiction and did not press that issue until after
the Court raised it sua sponte during oral argument. For the reasons explained in this
decision, after reviewing the parties’ supplemental submissions and carefully considering
the issue further, I am satisfied that equitable jurisdiction exists in this case.
16
     Compl. Ex. 1 § 10.14.
                                              6
here is “monetary” and thus should be subject to the “exclusive remedy” provision

of Section 9.8.17 The relevant part of Section 9.8 states:

         after the Closing, the indemnification provisions set forth in this
         Article IX shall provide the exclusive remedy for breach of any
         covenant, agreement or representation or warranty set forth in this
         Agreement . . . ; provided however, such limitation shall not impair
         the rights of any of the Parties to seek non-monetary equitable relief,
         including specific performance or injunctive relief to redress any
         default or breach of this Agreement (subject to the terms and
         conditions set forth in Section 10.14). In connection with the seeking
         of any non-monetary equitable relief, each of the Parties
         acknowledges and agrees that the other Party hereto would be
         damaged irreparably in the event any of the provisions of this
         Agreement are not performed in accordance with their specific terms
         or otherwise are breached.18

         As curious as the nomenclature “non-monetary equitable relief” is, the text

of Section 9.8 reflects that the parties contemplated that it would include “specific

performance.”19 Thus, the inquiry before the Court remains the appropriateness of

specific performance as a form of relief in this action. In conducting this inquiry,

the parties’ “irreparable damage” stipulation in Section 10.14 of the SPA, quoted

17
     See Opening Br. in Support of Bracket Hldg. Corp.’s Mot. to Dismiss 20-22.
18
     Compl. Ex. 1 § 9.8 (emphasis added).
19
   The parties did not identify any case law in Delaware addressing similar terminology.
Some cases refer to certain equitable remedies, such as restitution and rescission, as
involving monetary compensation. See United Rentals, Inc. v. RAM Hldg., Inc., 937
A.2d 810, 831 (Del. Ch. 2007). As discussed below, the specific performance that will
be ordered here is to require Bracket to take affirmative action to direct P-Star, a non-
party, to forward the Tax Refund to UBC. Even though the ultimate effect of that action
is the payment of a specific sum of money, the affirmative action compelled by the order
to be implemented itself is not “monetary.”

                                             7
above, is not controlling. “It is a cardinal principle of the law that jurisdiction of a

court over the subject matter cannot be conferred by consent or agreement.”20

Rather, the Court must engage in a practical analysis of the adequacy of a legal

remedy.21

         To be adequate, “a legal remedy must be available as a matter of right, be

full, fair and complete, and be as practical to the ends of justice and to prompt

administration as the remedy in equity.”22 UBC argues that a damages award in

this action “would not be as certain, prompt, complete, or efficient” as an order of

specific performance because a non-party to this action, P-Star, is currently holding

the Tax Refund in a separate account.23 The primary authority on which UBC

relies for support is East Balt LLC v. East Balt US, LLC.

         In East Balt, plaintiffs sought an order compelling defendants to direct an

escrow agent to release certain escrow funds. Defendants moved to dismiss under

20
   El Paso Nat. Gas Co. v. TransAmerican Nat. Gas Corp., 669 A.2d 36, 39 (Del. 1995).
See also Kansas City S. v. Grupo TMM, S.A., 2003 WL 22659332, at *5 (Del. Ch. Nov. 4,
2003) (“If the facts plainly do not warrant a finding of irreparable harm, this Court is not
required to ignore those facts, especially since the parties cannot confer subject matter
jurisdiction upon a court.”).
21
   In Gildor v. Optical Sols. Inc., then-Vice Chancellor Strine held that parties’ stipulation
of irreparable harm alone was sufficient to demonstrate irreparable harm, but he also
cautioned that this would be true only if “the parties did not include the irreparable harm
stipulation as a sham, i.e., when an adequate remedy at law clearly exists, or simply as a
means to confer jurisdiction on this court.” Gildor v. Optical Sols., Inc., 2006 WL
4782348, at *11 (Del. Ch. June 5, 2006) (Strine, V.C.).
22
     Clark v. Teeven Hldg. Co., Inc., 625 A.2d 869, 881 (Del. Ch. 1992).
23
     Pl.’s Suppl. Submission 12-13.
                                              8
Court of Chancery Rule 12(b)(1) for lack of subject matter jurisdiction, arguing

that a legal remedy of money damages would be adequate.24 Although noting that

defendants’ arguments for dismissal “are not without merit,” the Court ultimately

held “it is capable of providing a more certain, prompt, complete, and efficient

remedy than is available at law.”25 In reaching this conclusion, the Court adopted

this Court’s reasoning in SecNet Holding, LLC v. Potash and Xlete, Inc. v. Willey,

both of which also involved funds held by non-party escrow agents. In SecNet and

Xlete, the Court observed that even if plaintiff could obtain a judgment for

damages in a law court, “defendants have failed to show how plaintiff could then

enforce its judgment as to the sum held in escrow.”26

         The facts here are analogous. The Tax Refund is currently being held by P-

Star, a non-party to this action, in a separate account.            Although P-Star is a

subsidiary of Bracket, Bracket has failed to demonstrate how UBC could “enforce

its judgment as to the sum held” by P-Star. In this regard, it is notable that in both

East Balt and SecNet, the Court concluded that a legal remedy would be

24
  East Balt LLC v. East Balt US, LLC, 2015 WL 3473384, at *2 (Del. Ch. May 28,
2015).
25
     Id. at *3 (internal quotations omitted).
26
   SecNet Hldg., LLC v. Potash, C.A. No. 7781-VCP, at 34 (Del. Ch. Apr. 2, 2013)
(TRANSCRIPT); see also Xlete, Inc. v. Willey, 1977 WL 5188, at *1 (Del. Ch. June 6,
1977) (finding that defendant failed to establish that plaintiff has a remedy at law that “is
as certain, prompt, complete, or efficient as the equitable remedy” the plaintiff sought,
which was for an order “directing the release of a sum of money held in escrow,” where
the escrow agents were “attorneys for the parties”).
                                                9
inadequate despite the fact that, under the relevant escrow agreement, the escrow

agent was “required to release disputed funds upon receipt of a certified copy of a

final, non-appealable order or judgment of a court of competent jurisdiction as to

the proper distribution of all or a portion of such Disputed Amount.”27 Bracket

does not contend that P-Star is under any obligation to release the Tax Refund once

a court of competent jurisdiction enters a damages award against Bracket, and

indeed, it is not apparent how a damages award against Bracket would have any

legal effect on P-Star, which is a separate legal entity.

         Furthermore, UBC alleges—and I must assume the allegation to be true for

purposes of the subject matter jurisdiction analysis28—that Bracket’s parent

company is currently planning to sell Bracket and the Companies.29 The prospect

of such a sale could inject uncertainty into Bracket’s ability to fulfill a $4.6 million

money judgment. Under these circumstances, an order of specific performance

compelling Bracket to direct P-Star to forward the Tax Refund to UBC

immediately along with the accrued interest would be more “certain, prompt,

complete, and efficient” than a damages award. Therefore, UBC has established

27
   East Balt, 2015 WL 3473384, at *3-4 (quoting Verified Second Amended Complaint
in SecNet).
28
     See Int’l Bus. Machs. Corp., 602 A.2d at 78.
29
     Compl. ¶¶ 13-14.
                                              10
that specific performance is a proper form of relief for its contract claim and thus

that the Court has equitable jurisdiction over this action.30

         B.     Bracket’s Motion to Dismiss

         The standards governing a motion to dismiss for failure to state a claim for

relief are well settled:

         (i) all well-pleaded factual allegations are accepted as true; (ii) even
         vague allegations are “well-pleaded” if they give the opposing party
         notice of the claim; (iii) the Court must draw all reasonable inferences
         in favor of the non-moving party; and (iv) dismissal is inappropriate
         unless the “plaintiff would not be entitled to recover under any
         reasonably conceivable set of circumstances susceptible of proof.”31

         Bracket raises two arguments in support of its motion to dismiss. First, it

argues that “UBC’s single-count complaint for specific performance is

insufficiently pled to survive a motion to dismiss because UBC has an adequate

remedy at law.”32 This argument fails for the reasons discussed above, namely, a

legal remedy is inadequate under the particular circumstances of this case.

         Second, Bracket argues that the Complaint “fails to adequately plead that

UBC has actually suffered any harm that needs to be remedied.” According to

Bracket, “[t]he only conceivable damage to UBC arises from a delay in payment to

30
  Because I conclude that the Court has equitable jurisdiction over this case, I need not
reach UBC’s alternative argument that jurisdiction is proper under 6 Del. C. § 18-111.
31
  Savor, Inc. v. FMR Corp., 812 A.2d 894, 896-97 (Del. 2002) (internal citations
omitted).
32
     Opening Br. in Support of Bracket Hldg. Corp.’s Mot. to Dismiss 6.

                                             11
UBC” and “[a]ny such damage is completely mitigated by the fact that Bracket is

holding the Pennsylvania Tax Refund in a segregated interest-bearing account.”33

Bracket abandoned this argument in its reply brief and, in any event, the argument

is frivolous. Accepting as true the allegations in the Complaint, UBC has been

deprived of the use of approximately $4.6 million for a substantial period of time

because Bracket, despite its clear contractual obligation to pay over the Tax

Refund to UBC “within fifteen (15) days” after its receipt thereof, decided to

withhold that money. This kind of harm is plainly cognizable under this Court’s

precedents,34 and Bracket has cited no authority for the proposition that UBC

would suffer no harm because an impermissibly withheld amount was placed in an

interest-bearing account beyond UBC’s control.

         For the above reasons, Bracket’s motion to dismiss the Complaint is denied.

         C.       UBC’s Motion for Summary Judgment

         Under Court of Chancery Rule 56(c), summary judgment “shall be rendered

forthwith if the pleadings, depositions, answers to interrogatories and admissions

on file, together with the affidavits, if any, show that there is no genuine issue as to

33
     Id. 12-13.
34
  See FdG Logistics LLC v. A&R Logistics Hldgs., Inc., 131 A.3d 842, 865-66 (Del. Ch.
2016) (remedying failure to “promptly” pay tax refund), aff’d, 148 A.3d 1171 (Del. 2016)
(TABLE).

                                          12
any material fact and that the moving party is entitled to a judgment as a matter of

law.”35

         In responding to a motion for summary judgment, all evidence is to be
         viewed in the light most favorable to the non-moving party, but the
         non-moving party may not rest upon its pleadings. Instead, where the
         moving party has placed in the record facts that would, if undisputed,
         entitle it to summary judgment, the burden shifts to the non-moving
         party to show, by affidavit or otherwise, that some material fact
         remains disputed.36

Furthermore, courts “may grant specific performance only if the terms of the

contract are established by clear and convincing evidence, and only where the

plaintiff has no adequate remedy at law.”37

         Bracket does not dispute that it breached Section 2.6(e) of the SPA, which is

confirmed by clear and convincing evidence.          Specifically, Bracket does not

dispute that (1) P-Star is one of the Company Subsidiaries;38 (2) on August 5,

2016, P-Star received the Tax Refund in the amount of $4,566,646.88 from a

“Governmental Authority,” as that term is defined in the SPA;39 (3) the Tax

Refund relates to “Pre-Closing Periods,” as that term is defined in the SPA;40 (4)

35
     Ch. Ct. R. 56(c).
36
   Ginsburg v. Phila. Stock Exch., Inc., 2007 WL 1662661, at *2 (Del. Ch. May 31, 2007)
(internal quotations omitted).
37
  Naughty Monkey LLC v. Marinemax Ne. LLC, 2010 WL 5545409, at *8 n.59 (Del. Ch.
Dec. 23, 2010).
38
     Compl. Ex. 1 § 1.36.
39
     See id. Ex. 2; id. Ex. 1 § 1.81.
40
     See id. Ex. 2; id. Ex. 1 § 1.130.
                                           13
the Tax Refund was not “included as a current asset on the Final Statement;”41 and

(5) Bracket has not paid over the Tax Refund to UBC.

          Bracket nevertheless argues that summary judgment is inappropriate because

UBC is not entitled to specific performance and because Bracket asserts the

affirmative defenses of recoupment and unclean hands.              As discussed above,

specific performance is an appropriate remedy for UBC’s contract claim. I also

conclude that both of Bracket’s affirmative defenses fail as a matter of law.

          “Recoupment is a common-law, equitable doctrine that permits a defendant

to assert a defensive claim aimed at reducing the amount of damages recoverable

by a plaintiff.”42

          To prevail on a recoupment claim, the defendant must show among
          other things that . . . the recoupment claim arises out of the same
          transaction or occurrence as the plaintiff’s suit and the claim is purely
          a defensive set-off and does not seek an affirmative recovery from the
          plaintiff. Moreover, both the primary damages claim and the claim in
          recoupment must involve the same litigants.43

In Finger Lakes Capital Partners, the Delaware Supreme Court held that “the

transactional       nexus    requirement   under   recoupment     [should]   be   tightly

41
     Id. Ex. 1 § 2.6 (e).
42
   TIFD III-X LLC v. Fruehauf Prod. Co., L.L.C., 883 A.2d 854, 859 (Del. Ch. 2004)
(Strine, V.C.).
43
     Id. (internal quotations omitted).

                                             14
constrained.”44 “[T]he fact that a single contract is involved does not suffice to

demonstrate that the necessary transactional nexus exists.”45              Instead, the

transactional nexus requirement “must be interpreted with an eye towards the

central purpose of recoupment, which is to avoid needless delay and unnecessary

litigation by permitting a defendant to assert in one action any defenses she may

have arising out of the same factual core as the plaintiff’s claims.”46

         Bracket argues that its “recoupment defense is based on the same fraud

allegations it has asserted in Superior Court.”47          The Superior Court action,

however, does not “arise out of the same transaction or occurrence” as the pre-

closing tax refund dispute in this Court. Bracket has not identified any overlapping

operative facts between the Superior Court action and this action, and none is

apparent.48 According to its Amended Complaint, the gravamen of Bracket’s fraud

claim in the Superior Court is that UBC, its parent company Express Scripts, Inc.,

44
  Finger Lakes Capital P’rs, LLC v. Honeoye Lake Acq., LLC, 151 A.3d 450, 454 (Del.
2016).
45
     TIFD, 883 A.2d at 864.
46
     Id. at 864-65 (internal quotations omitted).
47
     Opening Br. in Support of Bracket Hldg. Corp.’s Mot. to Dismiss 23.

                                               15
and the Vice President of Finance of a UBC subsidiary fraudulently inflated the

Companies’ financial statements and caused Bracket to overpay by over $80

million in the Transaction.49 The allegedly inflated financial statements might

have caused Bracket to pay more than it otherwise would have for the Companies,

but they have no bearing on UBC’s entitlement to the Tax Refund.                  Indeed,

because the Tax Refund relates to taxes UBC paid for periods before the

Transaction closed, UBC logically would be entitled to the refund whether or not

the parties had entered into the SPA.

         The defense of unclean hands fails for essentially the same reason.

Although “courts of equity have extraordinarily broad discretion in application of

the doctrine of unclean hands, . . . the discretion of the Court is not absolute and

the improper conduct must . . . have an ‘immediate and necessary’ relation to the

claims under which relief is sought.”50 If a plaintiff’s “claim grows out of or

depends upon, or is inseparably connected with, his own prior fraud, a court of

48
   During oral argument, Bracket suggested that the fraud claim might impact the tax
returns filed in earlier periods, see Tr. Oral Arg. 52, but Bracket did not put in any
evidence, by affidavit or otherwise, that disputes the amount of tax refund that should be
returned to UBC. See Tr. Oral Arg. 56. In any event, Section 2.6(e) provides that “If any
payment by the Buyer to the Parent pursuant to this Section 2.6(e) is subsequently
reduced or disallowed, the Parent shall indemnify and hold harmless the Buyer from and
against any Tax or cost that is attributable to such reduction or disallowance.” Compl.
Ex. 1 § 2.6(e).
49
 See Amended Complaint, In re Bracket Hldg. Corp. Litig., C.A. No. N15C-02-233
WCC CCLD (Del. Super. Apr. 13, 2016).
50
     Sloan v. Segal, 2010 WL 2169496, at *6 (Del. May 10, 2010) (TABLE).

                                           16
equity will, in general, deny him any relief.”51 Here, however, as previously

explained, the fraud claim in the Superior Court is not immediately or necessarily

related to the dispute in this action, and UBC’s entitlement to the Tax Refund does

not “depend upon” and is not “inseparably connected with” the alleged fraud.

         For the reasons discussed above, UBC clearly and convincingly has

established that Bracket breached Section 2.6 of the EPA based on undisputed

facts, and that both of Bracket’s affirmative defenses fail as a matter of law.

Accordingly, UBC’s motion for summary judgment is granted.

                                         *****

         The parties are directed to confer and to submit a form of final judgment and

order within five business days in accordance with this ruling.

                                          Sincerely,
                                          /s/ Andre G. Bouchard
                                          Chancellor
AGB/gm

51
     2 John Norton Pomeroy, A Treatise on Equity Jurisprudence § 401 (5th ed. 1941).

                                            17