Court Opinion

ID: 5858441
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:11:21.762563+00
Date Added: 2024-06-11T08:44:21.231234
License: Public Domain

Sandler, J. P. (concurring).
I am in agreement with the conclusion reached in the majority memorandum, and for the reasons set forth. However, one aspect of the underlying transaction seems to me to merit additional comment. A critical issue presented, and one that may ultimately prove decisive, is whether the listing of brokers in what appears to be a boiler plate clause of the Acquisition Agreement providing for mutual indemnification against potential suits by brokers is reasonably construed as limiting the right of Stratford Retreat House, the seller, to transfer shares of stock received for the sale of the business to someone not so listed who had in fact contributed to the bringing about of the transaction. In the usual situation it would be doubtful, as Special Term understandably found, for the same word, “broker”, to be used in different senses in separate parts of an agreement. But this may not be the usual situation. It is difficult to discern in the several agreements, or in any of the surrounding circumstances to the extent to which these were developed at Special Term, any suggestion that it was a matter of concern to respondent buyer to whom the seller allocated the shares of stock which it was to receive. Significantly, the amount of shares that it was to transfer to others was not set forth in the agreement, nor was there any effort to prescribe the proportions that were to go to those to whom the seller deemed itself obligated. It thus seems improbable that the identity of the recipients was a matter of any interest to the buyer or in any way contributed to the fixing of the purchase price. On the face of it, the very large value of the shares of stock that the seller agreed to transfer to the plaintiffs is compelling evidence that the plaintiffs were indeed recognized by the seller as having contributed significantly to the transaction. If this analysis is correct, the result reached at Special Term represents an unbargained-for windfall to the buyer. In effect, the buyer will pay less for the business than it agreed to pay, and for a reason that in no way affected the determination of the purchase price. It may be, of course, that further factual development will disclose a reason not apparent on this record for the contracting parties to have excluded the plaintiffs from those entitled to receive shares of stock. Absent evidence of such a reason, a strong basis appears for the conclusion that the listing of brokers in the indemnification clause was not intended to limit the seller’s right to transfer shares to others who in fact contributed to the bringing about of the transaction.