Court Opinion

ID: 9908625
Source: CourtListenerOpinion
Date Created: 2023-12-11 15:02:33.259233+00
Date Added: 2024-06-11T12:49:21.828046
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

DARLING INGREDIENTS INC.,           )
                                    )
           Plaintiff and            )
           Counterclaim Defendant, )
                                    )
      v.                            )    C.A. No. 2023-0614-LWW
                                    )
GERALD F. SMITH, JR.; GERALD        )
F. SMITH, JR. GST TRUST;            )
MICHAEL A. SMITH; MICHAEL           )
SMITH GST TRUST; J. KEVIN           )
KING, TRUSTEE UNDER                 )
IRREVOCABLE TRUST                   )
AGREEMENT WITH GERALD F.            )
SMITH, JR. DATED SEPTEMBER 1, )
2009; WILLIAM GREGORY               )
SNELLINGS, TRUSTEE FBO              )
VICTORIA KATHERINE SMITH            )
UNDER IRREVOCABLE TRUST             )
AGREEMENT WITH MICHAEL A. )
SMITH DATED DECEMBER 17,            )
2012; WILLIAM GREGORY               )
SNELLINGS, TRUSTEE FBO              )
MITCHELL ALEXANDER SMITH            )
UNDER IRREVOCABLE TRUST             )
AGREEMENT WITH MICHAEL A. )
SMITH DATED DECEMBER 17,            )
2012,                               )
                                    )
           Defendants and           )
           Counterclaim Plaintiffs. )

                      MEMORANDUM OPINION

                   Date Submitted: September 6, 2023
                   Date Decided: December 11, 2023
T. Brad Davey & Callan R. Jackson, POTTER ANDERSON & CORROON LLP,
Wilmington, Delaware; Matthew Solum & Jeffrey Goldfine, KIRKLAND & ELLIS
LLP, New York, New York; Richard Husseini & Leah Davis Patrick, KIRKLAND
& ELLIS, Houston, Texas; Counsel for Plaintiff and Counterclaim Defendant
Darling Ingredients Inc.

J. Clayton Athey & Robert B. Lackey, PRICKETT, JONES & ELLIOTT, P.A.,
Wilmington, Delaware; Michael C. Whalen, PAUL HASTINGS LLP, Chicago,
Illinois; Counsel for Defendants and Counterclaim Plaintiffs

WILL, Vice Chancellor
      In May 2022, Darling Ingredients Inc. acquired Valley Proteins, LLC in a

$1.1 billion transaction. The acquisition was made pursuant to a stock purchase

agreement, which set out a dispute resolution process that includes the referral of

certain matters to an accountant. Now, the parties are embroiled in a post-closing

tax dispute and have reached an impasse over how the accountant should resolve it.

      Because the acquisition created tax benefits for Darling, the total purchase

price included a payment for an estimated tax benefit amount. The amount could be

increased or decreased at closing using an agreed-upon tax model.             Darling

calculated a final tax benefit amount that was below the initial estimate, meaning

that the sellers owed Darling the difference. The sellers then had 30 days to issue a

protest notice challenging the calculation.

      Although the stock purchase agreement permitted the sellers to send Darling

an information request and toll the 30-day deadline, the sellers instead sent Darling

a formal protest notice. Doing so launched the contractual dispute resolution

process, which the parties followed for a time. It stalled when the accountant

charged with resolving the tax dispute presented an engagement letter confining the

scope of its work to the issues in raised in the sellers’ protest notice.

      Darling was willing to sign the engagement letter. But the sellers balked.

They insisted that the accountant’s review include a new set of disputes raised in a

second protest notice the sellers had sent to Darling.          The parties asked the

                                            1
accountant to resolve the legal question of how the stock purchase agreement defines

its role, but it declined. That task falls to me.

      Darling filed suit in this court, and the sellers filed counterclaims. The parties

cross-moved for summary judgment on whether the sellers must sign the

accountant’s engagement letter. The central question before me is whether the

accountant’s review is appropriately limited to matters raised in the seller’s initial

protest notice or expanded to include those raised later. In this decision, I conclude

that the stock purchase agreement mandates the former outcome.

      My reasoning is based on a straightforward contract interpretation exercise.

The stock purchase agreement does not provide for multiple protest notices and

restricts the scope of the accountant’s review to matters raised in the protest notice

(among other discrete items). Thus, the issues in dispute for the accountant to

resolve are those in the seller’s initial protest notice. The engagement letter proposed

by the accountant is consistent with these terms and reasonable to resolve the tax

dispute. Darling is entitled to declaratory relief consistent with these conclusions.

                                            2
    I.   FACTUAL BACKGROUND

         Unless otherwise noted, the following background is drawn from the

undisputed facts in the parties’ pleadings and documentary exhibits submitted by the

parties.

         A.     The Acquisition

         Darling Ingredients Inc. is a Delaware corporation that converts food waste

streams into sustainable products and produces renewable energy.1 On May 1, 2022,

Darling acquired Valley Proteins, LLC through a stock purchase for $1.1 billion.2

The transaction was governed by a Stock Purchase Agreement (the “Agreement”)

by and among Darling, on one hand, and Valley Proteins, the equity holders of

Valley Proteins, and Gerald F. Smith, Jr. in his capacity as Sellers’ Representative,

on the other hand (collectively, the “Sellers”).3

         B.     The Tax Benefit Amount and Post-Closing Adjustment

         In the transaction, Valley Proteins undertook a pre-closing “F” reorganization

that created tax benefits for Darling.4 Darling agreed to pay the Sellers a “Estimated

Tax Benefit Amount,” in addition to the $1.1 billion cash purchase price, for these

1
    Verified Compl. (Dkt. 1) (“Compl.”) ¶ 4.
2
  Compl. ¶ 1; Defs.’ Answer to Verified Compl. and Verified Countercls. (Dkt. 26)
(“Answer”) ¶ 1; see Compl. Ex. 1 (“SPA”).
3
 Compl. ¶ 2. At times, the Sellers are referred to interchangeably with the Sellers’
Representative.
4
    Id. at ¶ 10; Answer ¶ 10; see SPA § 5.5.
                                               3
expected tax benefits.5 To calculate the Estimated Tax Benefit Amount, Darling

used an agreed-upon “Tax Model.”6 Per the Tax Model, the Estimated Tax Benefit

Amount was initially calculated to be $92,600,000.7

          The Estimated Tax Benefit Amount could be adjusted up or down after

closing.8 This post-closing adjustment would yield a “Closing Tax Benefit Amount”

that Darling would calculate using the Tax Model.9 Section 2.5(h) of the Agreement

contemplates two potential adjustments to the Tax Model when determining the

Closing Tax Benefit Amount.10 The first adjustment is to the purchase price based

on the Final Closing Schedule. The second adjustment is to reflect the fair market

value of certain assets based on the values assigned in a jointly determined “Final

Allocation” of the Purchase Price.11 Specifically, the parties agreed that:

                   Within three (3) days after the determination of the Final
                   Allocation pursuant to Section 7.4(h), [Darling] shall prepare in
                   good faith and deliver to Sellers’ Representative a proposed
                   calculation of the Tax Benefit Amount, which shall be
                   determined after updating the Tax Model solely (A) for
                   adjustments to the Purchase Price and any other item of
                   consideration for income tax purposes, as determined pursuant to
                   the Final Closing Schedule and (B) to reflect that the “FMV” for

5
    Compl. ¶ 11; see SPA § 2.2.
6
    SPA Ex. C. The Tax Model is Exhibit C to the Agreement. Id.
7
    Compl. ¶ 11.
8
    Id. at ¶ 13.
9
    Id. at ¶¶ 13-14; see SPA § 2.5(h).
10
     SPA § 2.5(h).
11
     Id.; see id. § 7.4(h); infra note 12 (defining “Final Allocation”).
                                                 4
                  each of the Current and Non-Current Assets listed below the
                  “Estimated Gain Calculation – Asset Sale” in the Tax Model
                  shall be the value assigned to such assets in the Final Allocation
                  (the “Closing Tax Benefit Amount”).12

          Section 2.5(h) also explains what the parties are to do if the Closing Tax

Benefit Amount differs from the Estimated Tax Benefit Amount.13 If the Estimated

Tax Benefit Amount is greater than the Closing Tax Benefit Amount, then the Sellers

are required to pay Darling the difference.14 If the Estimated Tax Benefit Amount

is less than the Closing Tax Benefit Amount, then Darling must pay the

Sellers the difference.15

12
   SPA § 2.5(h). “Final Allocation” is defined as the “Agreed Allocation” “except in the
case of any disputed items which the Sellers’ Representative and [Darling] are unable to
resolve as set forth in [] Section 7.4(h), in which case it shall mean the value assigned to
such items in [Darling]’s Proposed Allocation.” Id. § 7.4(h). “Agreed Allocation” refers
to the agreed upon proposed allocation. Id. “Final Closing Schedule” is defined as “the
Actual Closing Schedule if deemed final in accordance with Section 2.5(d) or the definitive
Final Closing Schedule agreed to in writing by [Sellers] and [Darling] or resulting from the
determinations made by the Accountants in accordance with [] Section 2.5(e).” Id. § 2.5(e).
The “Actual Closing Schedule” refers to the schedule delivered by Darling to the Sellers
that sets forth Darling’s “good faith determination of (i) each item of Indebtedness
outstanding as of immediately prior to the Closing, (ii) each Transaction Expense, (iii) Net
Working Capital, (iv) Cash, and (v) the Actual Closing Amount resulting therefrom, in
each case, together with reasonably detailed supporting or underlying documents for the
calculation thereof.” Id. § 2.5(b).
13
     Id. § 2.5(h)(i)-(ii).
14
     Id. § 2.5(h)(i).
15
     Id. § 2.5(h)(ii).
                                               5
         C.      The Final Allocation

         Section 7.4(h) of the Agreement effectively serves as a gating mechanism to

Section 2.5(h) and Darling’s calculation of the Closing Tax Benefit Amount.16 The

calculation of the Closing Tax Benefit Amount follows the Final Allocation of the

purchase price, which the parties are to set pursuant to Section 7.4(h).17 In relevant

part, Section 7.4(h) provides:

                 As soon as practicable and, in any event, within thirty (30) days
                 following the final determination of the Final Closing Schedule
                 pursuant to Section 2.5, [Darling] will provide to Sellers’
                 Representative a proposed allocation of the Purchase Price
                 (along with other items of consideration for United States federal
                 Income Tax purposes) among the assets of the Acquired
                 Companies in accordance with Section 1060 of the Code and
                 consistent with a valuation report prepared for [Darling] by an
                 independent, third-party valuation and appraisal firm with
                 respect to the transactions contemplated by the Agreement
                 (“Buyer’s Proposed Allocation”) along with relevant portions of
                 such valuation report . . . . If the Parties agree with respect to the
                 allocation, such allocation shall be conclusive and binding on the
                 Parties and the Parties agree not to take any position, in
                 connection with any Tax Return, audit or similar proceeding
                 related to Taxes, that is inconsistent with this Section 7.4(h) . . .
                 For the purposes of this Agreement, the “Final Allocation” shall
                 mean the Agreed Allocation . . . .18

         If a dispute over Darling’s “Proposed Allocation” of the purchase price arose,

Darling and the Sellers’ Representative would be obligated to negotiate in good faith

16
     See id. § 2.5(h).
17
     Id. § 7.4(h); see supra note 12 (defining Final Allocation).
18
     SPA § 7.4(h).
                                                6
to reach agreement on a Final Allocation within 30 days of the Proposed Allocation’s

delivery.19 Darling would use the Final Allocation in preparing the Closing Tax

Benefit Amount.20 Under Section 2.5(h), the calculation of the Closing Tax Benefit

Amount is to be delivered to the Sellers’ Representative within three days of

determining the Final Allocation.21

           D.    Delivery of the Proposed Allocation and the Closing Tax
                 Benefit Amount

           After closing, on October 14, 2022, Darling delivered its Proposed Allocation

of the purchase price and Closing Tax Benefit Amount to the Sellers, along with

native versions of spreadsheets detailing these calculations.22 Section 7.4(h) of the

Agreement required that Darling’s Proposed Allocation be consistent with a

valuation report by Houlihan Lokey—Darling’s third-party valuation and appraisal

firm.23 Darling’s calculation of the Proposed Allocation was the result of several

adjustments: (1) to the Final Closing Schedule; (2) to the Tax Benefit Amount; (3) to

19
     Id.
20
     See id. § 2.5(h).
21
     Id.
22
  Transmittal Aff. of T. Brad Davey in Supp. of Pl.’s Answering Br. in Opp’n to Defs. and
Countercl. Pls.’ Mot. for Summ. J. (Dkt. 39) (“Davey Aff.”) Exs. N, P. Darling provided
the Closing Tax Benefit Amount with the Proposed Allocation, before the Final Allocation
had been determined. See Davey Aff. Ex. N; infra notes 126-28 and accompanying text.
23
     SPA § 7.4(h); see Davey Aff. Ex. N.
                                             7
the tax basis in the acquired assets and assumed liabilities; and (4) to reflect an

indemnity escrow.24

           Darling’s calculations yielded a Closing Tax Benefit Amount of

$63,568,000.25        Since the Closing Tax Benefit Amount was less than the

$92,600,000 Estimated Tax Benefit Amount, Darling asked that the Sellers pay it

the $29,032,000 difference in accordance with Section 2.5(h)(i) of the Agreement.26

           E.    The Dispute Resolution Process

           Sections 2.5(c) to (e) and (h) of the Agreement set out a bargained-for process

through which the parties request information and raise certain disputes to arrive at

a final purchase price.27 The dispute resolution process is brisk, with the entire

process taking about 90 days.28

           Sections 2.5(c) to (e) address disputes over the Actual Closing Schedule.29

Section 2.5(h) incorporates the same process for disputes over the Closing Tax

Benefit Amount.30 In relevant part, Section 2.5(h) states:

                 The Closing Tax Benefit Amount shall be reviewed by the
                 Sellers’ Representative and any dispute regarding the Closing

24
     Davey Aff. Ex. N at 1.
25
     Id.
26
     Id.; see SPA § 2.5(h)(i).
27
     See SPA §§ 2.5 (c)-(e), (h).
28
     Compl. ¶ 17.
29
     SPA §§ 2.5(c)-(e).
30
     Id. § 2.5(h).
                                              8
                 Tax Benefit Amount shall be resolved either by [Darling] and
                 Sellers’ Representative or by the Accountants, in each case in
                 accordance with the procedures set forth in Sections 2.5(c), (d)
                 and (e).31

The process for resolving disputes over the Closing Tax Benefit Amount proceeds

in several steps.

           First, Section 2.5(c) provides that upon receipt of Darling’s Closing Tax

Benefit Amount, the Sellers may request additional, “reasonable” information to

verify Darling’s calculations.32 Such requests could include “the [b]ooks and

[r]ecords, work papers, trial balances and other materials relating to the [Closing Tax

Benefit Amount].”33 The Sellers could also, “to the extent reasonably necessary to

complete their review of the [Closing Tax Benefit Amount],” ask to speak with

“[Darling’s] and [Valley Proteins’] personnel and accountants.”34

           Second, under Section 2.5(d), the Sellers’ Representative may initiate the

dispute resolution process by delivering a written protest notice to Darling raising

any disagreement with the Closing Tax Benefit Amount.35 The protest notice must

include reasonable detail and documentation supporting the amount in dispute and

31
     Id.
32
     Id. § 2.5(c).
33
     Id.
34
     Id.
35
     Id. § 2.5(d).
                                             9
be delivered within 30 days of Darling serving its Closing Tax Benefit Amount

calculation.36 If a protest notice is not filed within 30 days of the Sellers receiving

Darling’s Closing Tax Benefit Amount calculation, then the Closing Tax Benefit

Amount calculation “shall be final, binding, and non-appealable.”37 This 30-day

window can be tolled if the “Sellers’ Representative notifies [Darling] in writing”

that Darling failed to comply with an information request under Section 2.5(c).38

           Third, after a protest notice is timely delivered, Darling and the Sellers must

“promptly endeavor in good faith to resolve any disagreement as to the [Closing Tax

Benefit Amount]” under Section 2.5(e).39 If the parties cannot reach agreement

within 30 days of Darling receiving the protest notice, then the matter is transferred

to Deloitte & Touche LLP for a final determination.40 Deloitte’s process is to be

completed within 30 days and its decision is final and binding.41

           The Agreement limits what Deloitte can consider when reaching its

determination.42 Section 2.5(e) states that Deloitte’s review must be “based solely

on the [Closing Tax Benefit Amount] and Protest Notice, together with all relevant

36
     Id.
37
     Id.
38
     Id.
39
     Id. § 2.5(e).
40
     Id.
41
     Id.
42
     Id.
                                             10
supporting documentation, and any other clarifying presentations and submissions

by [Darling] and Sellers’ Representative as [Deloitte] may reasonably request . . .

and not by independent review, only those amounts still in dispute.”43 The parties

agreed in Section 2.5(e) “to execute, if requested by [Deloitte], a reasonable

engagement letter.”44

           F.   The November Protest Notice and December “Amended”
                Protest Notice

           On November 9, Grant Thornton, LLP (as the Sellers’ accounting

representative) delivered a letter to Darling (the “November Protest Notice”)

responding to Darling’s October 14 calculations.45 The letter was labeled “Protest

Notice” and stated that it “constitute[d] a Protest Notice pursuant to section 2.5(d)

of the Stock Purchase Agreement.”46

           The November Protest Notice concerned the Closing Tax Benefit Amount as

calculated by Darling. More specifically, it disputed the calculation of the Proposed

Allocation that, in turn, affected the Closing Tax Benefit Amount.47 The November

Protest Notice challenged Darling’s gross-up calculation in connection with a

43
     Id.
44
     Id.
45
     Compl. Ex. 3 (“Nov. Protest Notice”) at 1.
46
     Id.
47
     Id.
                                             11
“section 199A deduction on the ordinary gain associated with the asset sale,”

additional federal income tax on the incremental asset gain, and additional state

income tax on the deemed asset sale.48 It also disputed Darling’s tax benefit

calculation as it related to a “Tax Basis Step-Up” and an “Effective Corporate Tax

Rate.”49 The November Protest Notice closed by stating that the Sellers “reserve[d]

the right to modify th[e] Protest Notice upon receipt and analysis of the information

that ha[d] been requested from [Darling], but not yet provided, and any other

information received from [Darling], including in connection with the discussion of

the items set forth [therein].”50

           On November 10, the Sellers requested additional information from Darling

about the fair market value of acquired assets.51           The parties then met on

November 16 to address the November Protest Notice and the Sellers’ November 10

information request.52 Darling subsequently provided the Sellers with a “Fixed

Asset Depreciation” detail file.53

48
     Id. at 2-3.
49
     Id. at 3.
50
     Id.
51
  Aff. of Jeffrey Alberty in Supp. of Defs. and Countercl. Pls.’ Mot. for Summ. J. (Dkt.
34) (“Alberty Aff.”) Ex. B at 1. The fair market value of the assets requested on November
10 was the same allocation provided for in Section 7.4(h) of the SPA.
52
     Alberty Aff. ¶ 21.
53
  Davey Aff. Ex. R. This file contained a list of Valley Proteins’ fixed assets that were
acquired by Darling as well as their acquisitions costs. Id. The parties disagree about
whether the fixed asset depreciation detail file was necessary to calculate the Final
                                           12
           On December 1, Darling responded to the November Protest Notice and said

that it would be unable to resolve the Sellers’ contentions.54 Darling explained that

the Sellers had proposed “multiple formula changes inconsistent with the Stock

Purchase Agreement, which specifically limit[ed] the [Closing] Tax Benefit Amount

Adjustment solely to certain input changes to the Tax Model and not the Tax Model

itself.”55

           On December 9—nearly two months after Darling submitted its Closing Tax

Benefit Amount calculation to the Sellers—Grant Thornton sent Darling another

letter on behalf of the Sellers identifying additional issues with the Closing Tax

Benefit Amount (the “December Protest Notice”).56 The letter was labeled “Protest

Notice.”57 It explained that the letter “constitute[d] an amendment to the Protest

Notice provided November 8 [sic], 2022 pursuant to section 2.5(d) of the Stock

Purchase Agreement.”58

Allocation required under Section 7.4(h) and the subsequent Closing Tax Benefit Amount.
This dispute is immaterial to the questions before me: whether the November Protest
Notice was final and whether Deloitte’s engagement letter was reasonable. See infra
Sections II.A-B.
54
     Alberty Aff. Ex. D at 1.
55
     Id.
56
     Alberty Aff. Ex. E (“Dec. Protest Notice”).
57
     Id. at 1.
58
     Id.
                                              13
           In the December Protest Notice, the Sellers disputed Darling’s use of the

Houlihan Lokey report (as opposed to the Final Closing Schedule) in adjusting the

purchase price, tax basis, and net working capital.59 They further questioned

Darling’s reduction in the amount of liabilities assumed and inclusion of the assets

not sold in the tax basis calculation.60 Grant Thornton stated that it was “ready to

submit [its] comments to Deloitte . . . for consideration.”61

           In response, on January 12, Darling sent Grant Thornton a letter largely

rejecting the arguments raised in both the November Protest Notice and the

December Protest Notice.62 Darling’s letter included a revised calculation of the

Closing Tax Benefit Amount that accounted for certain adjustments to the Tax

Model.63 Under this revised calculation, the Closing Tax Benefit Amount owed to

59
     Id. at 2-3.
60
     Id.
61
     Id. at 3.
62
     Alberty Aff. Ex. F (“Jan. 12 Letter”).
63
   Id. at 2-3, 5-6. The parties disagree over the basis for Darling’s revisions to the post-
closing adjustments to the Closing Tax Benefit Amount calculation. Darling avers that this
revised calculation was an “express settlement communication” that it hoped would resolve
the dispute without need of court intervention. Pl.’s Opening Br. in Supp. of its Mot. for.
Summ. J. (Dkt. 31) (“Darling’s Opening Br.”) 14 n.5. The Sellers contend that these
changes were based on the November Protest Notice and December Protest Notice, and
included modifications to the formula used for the tax basis attributable to the assets
acquired from the Sellers. See Defs. & Countercl. Pls.’ Opening Br. in Supp. of their Mot.
for Summ. J. (Dkt. 33) (“Sellers’ Opening Br.”) 13. This dispute does not affect the central
questions before me, which are whether the November Protest Notice was final and
whether Deloitte’s engagement letter was reasonable. See infra Sections II.A-B.
                                              14
Darling would be reduced from $29,032,000 to $20,797,000.64 Darling further

advised the Sellers that if the parties could not agree on a Closing Tax Benefit

Amount by January 18, then it would engage Deloitte to resolve the matter in

accordance with Sections 2.5(e) and (h).65

          G.       The Engagement Letter

          The parties were unable to resolve their disagreement over the Closing Tax

Benefit Amount by January 18. At that point, Darling referred the dispute to Deloitte

for a final determination.66 Darling purported to do so on behalf of both parties.

          On February 14, after reviewing the Agreement and completing a conflicts

check, Deloitte agreed to accept the matter if the parties signed an engagement

letter.67        Deloitte sent the parties a draft engagement letter (the “February

Engagement Letter”) stating that, “[a]s provided by Section 2.5(e) of the

Agreement,” Deloitte had been asked “to act as an expert to resolve [the]

disagreements.”68 The February Engagement Letter explained that Deloitte would

“consider only those specific items of disagreement identified by the Seller in its

64
     Jan. 12 Letter 2.
65
     Id. at 7.
 Compl. ¶ 21; Transmittal Aff. of J. Clayton Athey in Supp. of Defs. & Countercl. Pls.’
66

Opening Br. in Supp. of their Mot. for Summ. J. (Dkt. 34) (“Athey Aff.”) Ex. 2 at 7.
67
     Answer ¶ 23; Athey Aff. Ex. 2 at 3-4.
68
     Compl. Ex. 4 at 2.
                                             15
Protest Notice; other amounts and issues related to the Closing Tax Benefit Amount

having been accepted by the Seller[s] are considered settled, final, and binding on

the Parties.”69

           Darling agreed to sign the February Engagement Letter.         The Sellers,

however, refused and requested substantive changes.70 Darling and the Sellers then

negotiated proposed modifications to the February Engagement Letter.71 In March

29 correspondence, the parties asked that “Deloitte resolve as a prefatory issue the

scope of what Deloitte may consider under the Agreement in resolving the dispute

and provide that scope determination to the parties.”72

           Deloitte rejected this proposed change to the February Engagement Letter.73

It explained that the revision called for “a legal determination . . . outside the scope

of the work Deloitte can perform.”74             Deloitte provided a revised proposed

engagement letter on April 14 (the “April Engagement Letter”).75

69
     Id. at 4.
70
     See Athey Aff. Ex. 2 at 1.
71
     Id.
72
     Id.
73
     Compl. ¶ 27; Answer ¶ 27.
74
     Athey Aff. Ex. 2 at 1.
75
     Compl. ¶ 27; Answer ¶ 27; Compl. Ex. 5 (“Apr. Engagement Letter”).
                                            16
         Again, Darling agreed to sign the April Engagement Letter.76 But the Sellers

refused, maintaining that the letter did not correspond with the terms of Section

2.5(h). In the Sellers’ view, the April Engagement Letter unreasonably limits

Deloitte’s review to Darling’s calculation of the Closing Tax Benefit Amount and

the November Protest Notice.77 Separately, on May 2, Sellers asserted (for the first

time) that the deadline to submit a protest notice under Section 2.5(d) had been

tolled.78 Thus, the parties reached an impasse.

         H.     The Litigation

         On June 13, 2023, Darling filed a three-count Verified Complaint against the

Sellers in this court.79 Count I of the complaint is a claim for breach of contract

against the Sellers for refusing to sign the April Engagement Letter.80 Count II seeks

a declaration that the April Engagement Letter conforms to the Agreement and is

reasonable under Section 2.5(e).81 Count III is a claim for costs, expenses, and fees

76
     Compl. ¶ 28.
77
  Transmittal Aff. of Callan R. Jackson in Supp. of Pl.’s Opening Br. in Supp. of its Mot.
for Summ. J. (Dkt. 31) (“Jackson Aff.”) Ex. J at 3-4.
78
     Jackson Aff. Ex. H at 2-3.
79
     Dkt. 1.
80
   Compl. ¶¶ 32-36. Although Darling initially requested that I order the Sellers to
specifically perform under Section 2.5(e) by signing an engagement letter, it conceded that
declaratory relief would be adequate. Tr. of Sept. 6, 2023 Oral Arg. on Mots. for Summ. J.
(“Hr’g Tr.”) 28.
81
     Compl. ¶¶ 37-43.
                                            17
in litigating this action, including reasonable attorneys’ fees, pursuant to Section

10.17 of the Agreement.82

         On June 30, the Sellers answered the complaint, raising several affirmative

defenses.83 The Sellers also advanced counterclaims against Darling for breach of

contract for failing to provide information under Section 2.5(c) and for “insisting

that [the] Sellers execute a patently unreasonable engagement letter with Deloitte.”84

The Sellers seek declaratory relief, along with attorneys’ fees and costs under

Section 10.17 of the SPA.85         On July 14, Darling answered the Sellers’

counterclaims.86

         On August 3, 2023, Darling filed a motion for summary judgment and the

Sellers cross-moved for summary judgment.87 After briefing was complete, the

cross-motions were argued on September 6.88 The motions were taken under

advisement at that time.

82
     Id. ¶¶ 44-46.
83
     Dkt. 26.
84
     Answer 30.
85
     Id. at 30-32.
86
     Dkt. 28.
87
     Dkts. 31-33.
88
     Dkts. 43, 46.
                                          18
II.      ANALYSIS

         Under Court of Chancery Rule 56, summary judgment is appropriate where

“there is no genuine issue as to any material fact and . . . the moving party is entitled

to a judgment as a matter of law.”89 “[T]he facts must be viewed in the light most

favorable to the nonmoving party and the moving party has the burden of

demonstrating that there is no material question of fact.”90 “In evaluating cross-

motions for summary judgment, the court must examine each motion separately and

only grant a motion for summary judgment to one of the parties when there is no

disputed issue of material fact and that party is entitled to judgment as a matter of

law.”91

         The parties’ arguments involve two interrelated issues: (1) whether the

November Protest Notice is final; and (2) whether the April Engagement Letter is

reasonable. If the November Protest Notice is final, then Deloitte’s review is

appropriately limited to the disputes raised in that notice, as set out in the April

Engagement Letter. But if the November Protest Notice is not final and the Sellers

were permitted to raise additional disputes (such as those in the December Protest

89
     Ct. Ch. R. 56 (c).
90
 Senior Tour Players 207 Mgmt. Co. v. Golftown 207 Hldgs. Co., 853 A.2d 124, 126 (Del.
Ch. 2004).
91
  Fasciana v. Elec. Data Sys. Corp., 829 A.2d 160, 166-67 (Del. Ch. 2003) (citation
omitted).
                                           19
Notice), then the appropriate scope of Deloitte’s review might be broader than the

April Engagement Letter contemplates. The resolution of these issues turns on the

plain terms of the Agreement.

      Matters of contract interpretation presenting questions of law may be

amendable to resolution through summary judgment.92               “In cases involving

questions of contract interpretation, a court will grant summary judgment under

either of two scenarios: when the contract in question is unambiguous, or when the

extrinsic evidence in the record fails to create a triable issue of material fact.”93 The

former scenario applies to the present motions.

      For the reasons explained below, I conclude that Darling is entitled to

summary judgment in its favor. The November Protest Notice is final. It follows

that the April Engagement Letter is reasonable.

      A.     Whether the November Protest Notice Is Final

      Upon Darling’s October 14 delivery of its Closing Tax Benefit Amount

calculation, Section 2.5(d) of the Agreement gave the Sellers a choice. The Sellers

could either accept Darling’s calculation or engage in the dispute resolution process

provided for in the Agreement. They chose the latter.

92
  See, e.g., Barton v. Club Ventures Invs. LLC, 2013 WL 6072249, at *5 (Del. Ch. Nov. 7,
2013); Pellaton v. Bank of N.Y., 592 A.2d 473, 478 (Del. 1991).
93
  GRT, Inc. v. Marathon GTF Tech., LTD., 2012 WL 2356489, at *4 (Del. Ch. June 21,
2012) (citation omitted).
                                           20
          In doing so, the Sellers had a second choice to make. They could, under

Section 2.5(d), submit a protest notice within 30 days of receiving the calculation.94

Or they could invoke the Agreement’s tolling mechanism by giving Darling written

notice that Darling failed to satisfy a request for access to documentation or

personnel under Section 2.5(c).95 The Sellers chose the former when they delivered

the November Protest Notice.

          Darling maintains that, as a result of these choices, the Sellers can only

challenge issues raised in their November Protest Notice.96 The Sellers reject this

outcome and dispute the finality of the November Protest Notice on two alternative

grounds.97 First, the Sellers argue that the Agreement permits multiple protest

notices.98 And second, they aver that—even if the Agreement permits a single

protest notice—their time to provide a final protest notice was tolled because Darling

failed to respond to an information request.99

94
     SPA § 2.5(d).
95
     Id. §§ 2.5(c)-(d).
96
     Darling’s Opening Br. 4-6.
97
     Sellers’ Opening Br. 2-3.
98
     Id. at 2.
99
     Id. at 3.
                                          21
                 1.       Section 2.5 Contemplates a Single Protest Notice.

          Section 2.5(h) of the Agreement sets out a process for resolving disputes over

the calculation of the Closing Tax Benefit Amount. Specifically, it provides that any

such dispute “shall be resolved either by [Darling] and Sellers’ Representative or by

the Accountants, in each case in accordance with the procedures set forth in Sections

2.5(c), (d), and (e).”100 Section 2.5(h) thereby incorporates the steps and time

limitations addressed in Sections 2.5(c) to (e) (regarding a “Tax Benefit Dispute”)

into the resolution of a dispute over the Closing Tax Benefit Amount.

          Darling asserts that these steps and their associated time limits were triggered

when the Sellers delivered the November Protest Notice. The Sellers, however,

argue that Section 2.5(h) allows them to raise any dispute about the Closing Tax

Benefit Amount at any time.101 As the Sellers read the Agreement, they are free to

raise multiple protest notices.102 Their reasoning fails for several reasons.

          First, the Sellers’ argument that Section 2.5(h) permits multiple or amended

protest notices is belied by the Agreement’s terms. Section 2.5(d) states that

“[w]ithin thirty (30) days following delivery of the [Closing Tax Benefit Amount],

[Sellers] may deliver written notice (the ‘Protest Notice’) to [Darling] of any

100
      SPA § 2.5(h).
101
      Sellers’ Opening Br. 18-19.
102
      See id. at 16-21.
                                              22
disagreement that Sellers[] . . . may have as to the [Closing Tax Benefit Amount].”103

The only logical reading of this provision is that a single protest notice is

contemplated—as denoted by the use of the definite article “the” before the defined,

singular term “Protest Notice.”104          The Agreement makes no mention of an

“amended” protest notice or plural protest notices. To graft a provision stating

otherwise onto the Agreement would be inconsistent with basic rules of contract

interpretation.105

         Nonetheless, the Sellers contend that the Agreement does not constrain their

ability to raise disagreements with the Closing Tax Benefit Amount calculation

beyond those in the November Protest Notice.106 They argue that the “any dispute”

language in Section 2.5(h) “places specific modifications and limitations on [the]

103
      SPA § 2.5(d).
104
    See ION Geophysical Corp. v. Fletcher Int’l, Ltd., 2010 WL 4378400, at *7 (Del. Ch.
Nov. 5, 2010) (“The definite article ‘the’ is generally used as a function word to indicate
that a following noun or noun equivalent is definite . . . [or] unique or a particular member
of its class . . . The word ‘a’ is an indefinite article used as a function word before singular
nouns when the referent is unspecified . . . [and] does not necessarily limit the frequency
or duration of that noun.”). The Sellers’ counsel conceded this point during oral argument.
Hr’g Tr. 46 (“The protest notice is referred to in the singular in the SPA. We’re not going
to run from that. That’s what it says.”).
105
    See Salamone v. Gorman, 106 A.3d 354, 368 (Del. 2014) (“When interpreting a
contract, [the] Court ‘will give priority to the parties’ intentions as reflected in the four
corners of the agreement.” (quoting GMG Cap. Invs., LLC v. Athenian Venture P’rs I, L.P.,
36 A.3d 776, 779 (Del. 2012))); Alchemy LTD LLC v. Fanchise League Co., LLC, 2023
WL 4670954, at *5 (Del. Ch. July 20, 2023) (“A court will not look beyond the four corners
of an agreement if a contract is unambiguous.”).
106
      See Sellers’ Opening Br. 16-21.
                                              23
incorporation of Section[s] 2.5(c)-(e).”107 For example, the Sellers assert that the

dispute resolution process outlined in Sections 2.5(c) to (e) operates differently when

applied to the Closing Tax Benefit Amount rather than to other Section 2.5 purchase

price adjustments.108

          The Sellers’ reading is inconsistent with the plain text of Section 2.5(h).109

Section 2.5(h) states that disputes over the Closing Tax Benefit Amount will be

resolved “in accordance with the procedures set forth in Sections 2.5 (c), (d), and

(e).”110 There is no carveout in Section 2.5(h) for the delineated time limitations in

raising and resolving issues described in these provisions.111 Similarly, nothing in

Sections 2.5(c) to (e) (or elsewhere in the Agreement) prescribes a different

resolution process when the dispute involves the Closing Tax Benefit Amount.

          The Sellers also aver that the “specific terms” of Section 2.5(h) (i.e., “any

dispute”; “in each case”) qualify the “general terms” in Sections 2.5(c) to (e),

107
      Id. at 7.
108
      See id.
109
   See Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 739 (Del. 2006)
(“When interpreting a contract, the role of a court is to effectuate the parties’ intent. In
doing so, [a court is] constrained by a combination of the parties’ words and the plain
meaning of those words where no special meaning is intended.”).
110
      SPA § 2.5(h).
  Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012) (“Unless there is
111

ambiguity, Delaware courts interpret contract terms according to their plain, ordinary
meaning.”).
                                            24
supporting the modification of Section 2.5’s dispute resolution process.112 The

canon of construction this argument draws upon might matter if the provisions

conflicted.113 There is no conflict, however. Section 2.5(h) is expressly qualified

by the terms of Sections 2.5(c) to (e).

         Finally, the Sellers’ interpretation of Section 2.5(h) as it relates to the dispute

resolution process outlined in Sections 2.5(c) to (e) would lead to an absurd result.114

According to the Sellers, “any dispute” over the Closing Tax Benefit Amount can

be resolved under Section 2.5(c)—regardless of the procedural steps and time

limitations specified in Sections 2.5(c) to (e).115 This interpretation would permit

the Sellers to submit unlimited disputes, rendering meaningless the requirements and

timeline in Sections 2.5(c) to (e). Theoretically, that could result in a looping and

112
      Sellers’ Opening Br. 17-18.
113
   See, e.g., ITG Brands, LLC v. Reynolds Am., Inc., 2017 WL 5903355, at *9 (Del. Ch.
Nov. 30, 2017) (“The rule of contractual interpretation that a ‘specific provision ordinarily
qualifies the meaning of [a] general one’ logically applies where ‘specific and general
provisions conflict.’ But there is no necessary conflict here.”); Sunline Com. Carriers, Inc.
v. CITGO Petroleum, Corp., 206 A.3d 836, 846 (Del. 2019) (“[G]eneral terms of the
contract must yield to more specific terms.”); DCV Hldgs., Inc v. ConAgra, Inc., 889 A.2d
954, 961 (Dec. 2005) (“Specific language in a contract controls over general language, and
where specific and general provisions conflict, the specific provision ordinarily qualifies
the meaning of the general one.”).
114
    See ITG Brands, 2017 WL 5903355, at *12 (“Delaware courts avoid adopting ‘[a]n
unreasonable interpretation [that] produces an absurd result or one that no reasonable
person would have accepted when entering the contract.’” (quoting Osborn ex rel. Osborn
v. Kemp, 991 A.2d 1153, 1160 (Del. 2010))).
115
      See Sellers’ Opening Br. 18.
                                             25
never-ending dispute resolution process and an unfinalized Closing Tax Benefit

Amount. Such a result would frustrate the broader purpose of Section 2.5, which

lays out an efficient, multi-step process to resolve disagreements over purchase price

adjustments within approximately 90 days.116

                  2.    The Protest Notice Deadline Was Not Tolled.

            Section 2.5(d) of the Agreement requires that the Sellers’ Representative

submit any protest notice within 30 days of Darling’s delivery of its Closing Tax

Benefit Amount calculation.117         This deadline may be tolled if the “Sellers’

Representative notifies [Darling] in writing that it has failed to comply with Section

2.5(c).”118 The period then remains tolled “during any time that it is reasonably

determined that [Darling] fails to comply with Section 2.5(c).”119

            The Sellers opted not to make an information request before sending their

November Protest Notice. It was not until May 2, 2023—nearly six months after the

November Protest Notice—that the Sellers raised Darling’s purported non-

116
    See Bardy Diagnostics, Inc. v. Hill-Rom, Inc., 2021 WL 2886188, at *18 (Del. Ch. July
9, 2021) (“When undertaking to construe a contract, our Supreme Court has instructed that
the trial court must consider ‘[t]he basic business relationship between [the] parties’ so that
it can ‘give sensible life’ to the agreement.” (quoting Chi. Bridge & Iron Co. v.
Westinghouse Elec. Co. LLC, 166 A.3d 912, 926-27 (Del. 2017))).
117
      SPA § 2.5(d); see supra note 36-38 and accompanying text.
118
      SPA § 2.5(d).
119
      Id.
                                              26
compliance with Section 2.5(c) and associated tolling.120 By then, the parties had

already taken steps in the dispute resolution process and Deloitte had delivered the

April Engagement Letter.121

          Section 2.5 differentiates between a protest notice and an information

request.122 Each mechanism serves a distinct, yet related, function in the dispute

resolution process. A request for access to information under Section 2.5(c) would

allow the Sellers to gain the materials necessary to verify the Closing Tax Benefit

Amount calculation. If Darling did not provide Sellers with reasonable access to the

requested documentation or personnel, the Sellers could invoke (in writing) the

tolling mechanism in Section 2.5(d).123 Doing so would protect the Sellers from

moving forward with a protest notice without first receiving the information needed

to verify Darling’s calculations. But the Sellers did not avail themselves of that

protection and opted, instead, to press ahead with the November Protest Notice.

120
      Jackson Aff. Ex. H at 2-3.
121
      See supra Sections I.F-G; Compl. ¶¶ 21, 23, 26-27; Answer ¶¶ 23, 26-27.
122
    SPA § 2.5(d) (“Sellers’ Representative may deliver written notice (the ‘Protest Notice’)
to [Darling] of any disagreement that Sellers’ Representative may have as to the [Closing
Tax Benefit Amount] setting forth in reasonable detail (and providing reasonable
documentation supporting) the amount(s) in dispute; provided, however, that in the event
Sellers’ Representative notifies [Darling] in writing that it has failed to comply with
Section 2.5(c), such thirty (30) day period shall toll . . . .”).
123
      See id. §§ 2.5(c)-(d).
                                             27
         The Sellers now aver that the November Protest Notice operated as both a

formal protest notice and a request for information under Section 2.5(c) that tolled

the protest notice deadline in Section 2.5(d).124 This argument is flawed. It would

be illogical for an information request in a protest notice to toll the deadline to serve

a protest notice.125

                                *             *             *

         Neither party has followed the Agreement to the letter. For example, Darling

submitted its calculation of the Closing Tax Benefit Amount before the Final

Allocation was determined, instead of three days after such determination pursuant

to Section 2.5(h). The parties dispute whether the calculations and asset allocations

that Darling subsequently provided in a spreadsheet were relevant to the Closing Tax

124
      See Sellers’ Opening Br. 22.
125
   See SPA §§ 2.5(c)-(d). The Sellers further argue that their statement in the November
Protest Notice “reserv[ing] the right to modify th[e] [November] Protest Notice upon
receipt and analysis of the information that ha[d] been requested from [Darling], but not
yet provided,” served as a Section 2.5(c) information request. Sellers’ Opening Br. 22;
Nov. Protest Notice 3. They analogize the statement to a books and records request under
8 Del. C. § 220, which they aver is proper without specific reference to the statute. Sellers’
Opening Br. 25 (citing NVIDIA Corp. v. City of Westland Police & Fire Ret. Sys., 282 A.3d
1, 13-14 (Del. 2022)). Setting aside the merits of the argument, it is irrelevant here. The
notice requirements at issue are contractually specified in an agreement negotiated between
sophisticated parties. E.g., Akorn, Inc. v. Fresenius Kabi AG, 2018 WL 4719347, at *60
(Del. Ch. Oct. 1, 2018) (“It is not the court’s role to rewrite the contract between
sophisticated market participants, allocating the risk of an agreement after the fact, to suit
the court's sense of equity or fairness.”), aff’d, 198 A.3d 724 (Del. 2018).
                                             28
Benefit Amount.126 But the Sellers forewent further negotiations of Darling’s

Proposed Allocation for purposes of Section 2.5(h) when they submitted the

November Protest Notice.127 In other words, by submitting their November Protest

Notice challenging the Closing Tax Benefit Amount, the Sellers effectively treated

Darling’s Proposed Allocation as the Final Allocation for purposes of Section

2.5(h).128

126
   On November 17, Darling provided the Sellers with a spreadsheet containing a list of
11,503 fixed assets Darling acquired from the Sellers and the fair market value that had
been assigned to each fixed asset. Davey Aff. Ex. R. Darling asserts that this spreadsheet
has no relevance to the calculation of the Closing Tax Benefit Amount and was instead
delivered to the Sellers so that they could prepare their tax returns. Pl.’s Answering Br. in
Opp’n to Defs. and Countercl. Pls.’ Mot. for Summ. J. (Dkt. 39) 5. The Sellers disagree
and contend that the November 17 spreadsheet “provided critical information regarding
Purchase Price allocations” that was necessary for the Sellers to verify the Closing Tax
Benefit Amount. Sellers’ Opening Br. 23, 26. The Sellers further assert that the December
Protest Notice is permissible because the 30-day window to deliver a protest notice did not
begin to run until November 17 when the spreadsheet was delivered. Id. at 26.
127
    That is not to say that the Sellers relinquished their ability to dispute the Proposed
Allocation for purposes of Section 7.4(h) or to adopt “their own positions regarding the
allocation of the Purchase Price among the assets of the Acquired Companies for tax
purposes.” SPA § 7.4(h).
128
   I note that Section 10.2 of the Agreement contains a non-waiver provision. SPA § 10.2
(“Any provision of this Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by each
Party, or in the case of a waiver, by the Party against whom the waiver is to be effective.”).
Regardless, the Sellers’ actions post-execution need not be overlooked. See Pepsi-Cola
Bottling Co. of Asbury Park v. PepsiCo, Inc., 297 A.2d 28, 33 (Del. 1972) (concluding that
the parties’ post-contract behavior effectively changed the operation of the written
agreement, notwithstanding anti-waiver language). The Sellers initiated the dispute
resolution process under Section 2.5(h) to challenge Darling’s calculation of the Closing
Tax Benefit Amounts, despite the Final Allocation not being formally determined.
                                             29
         Delivery of the November Protest Notice had other consequences. The Sellers

declined to exercise their right to pursue a pre-protest notice information request that

could toll the protest notice deadline if the request remained unfulfilled. Instead,

they triggered the next steps in the bargained-for dispute resolution process outlined

in the Agreement.129 Although the Sellers might now regret their hasty choice, the

Agreement does not grant them a protest notice do-over. Neither will I.

         B.     Whether Deloitte’s Engagement Letter Is Reasonable

         The Agreement delegates the resolution of the Closing Tax Benefit Amount

to “the Accountants”—i.e., Deloitte—who “shall act as an expert (and not an

arbitrator).”130 This language is clear and unambiguous.131 Deloitte’s review is

129
   The SPA does not provide for an “amended” Protest Notice. See Section II.A.1.
Therefore, the Sellers’ November Protest Notice was final and the tolling provision of
Section 2.5(d) become moot when the November Protest Notice was sent.
130
      SPA § 2.5(e).
131
    See, e.g., Penton Bus. Media Hldgs., LLC v. Informa PLC, 252 A.3d 445, 465 (Del. Ch.
2018) (“The parties evinced their clear intent in the Dispute Resolution Provision by using
‘expert not arbitrator’ language. The Dispute Resolution Provision does not contain any
features that might render this language ambiguous.”); Chi. Bridge, 166 A.3d at 931
(explaining that “expert not arbitrator” language “by itself has been read to narrow the
scope of the expert’s domain” and “further limited the scope of the [expert’s] review even
in the limited situations where it was empowered to review anything”).
                                            30
confined to the narrow technical question delegated to it—not a legal dispute over

contract interpretation.132

            Section 2.5(e) of the Agreement enumerates the information Deloitte may

consider in resolving the parties’ Closing Tax Benefit Amount disagreement.133 It

is permitted to resolve “only those amounts still in dispute.”134 And its determination

must be “based solely on the [Closing Tax Benefit Amount] and Protest Notice,

together with all relevant supporting documentation, and any other clarifying

presentations and submissions by [Darling] and Sellers’ Representative as [Deloitte]

may reasonably request.”135

            Darling contends that the April Engagement Letter proposed by Deloitte is

reasonable because it is consistent with the bounds of what Deloitte can consider

under Section 2.5(e).136 The Sellers, for their part, argue that Deloitte’s review

should be broadened to include “any dispute,” including those raised after the

132
    See Penton, 252 A.3d at 465 (“Holding that the Dispute Resolution Provision calls for
an expert determination means that the contract itself determines the scope of the expert’s
jurisdiction. Where the parties have entrusted the power of decision to an expert, the extent
of the expert’s jurisdiction depends on the terms of the contract between the parties.”)
(citation omitted).
133
      SPA § 2.5(e).
134
      Id.
135
      Id.
136
      Darling’s Opening Br. 6.
                                             31
November Protest Notice.137 The Sellers also insist that the April Engagement Letter

is unreasonable because it contains terms not contemplated by the Agreement.138

          The April Engagement Letter is appropriately limited to the matters presented

in the November Protest Notice, consistent with the Agreement’s terms. As noted

above, the Agreement does not provide for multiple or amended notices.139 Rather,

it delineates steps to resolve disputes involving the Closing Tax Benefit Amount

after a protest notice is served. The Sellers’ remorse over the November Protest

Notice they cast does not allow them to unilaterally expand the universe of what

Deloitte may consider.

          Although the language of the April Engagement Letter is not identical to the

Agreement, the two track in all material respects.140 The April Engagement Letter

references and incorporates Section 2.5(h).141 It also states that “other amounts and

issues related to the Closing Tax Benefit Amount having been accepted by Sellers[]

137
      See Sellers’ Opening Br. 18.
138
      Id. at 28-29.
139
      See supra Section II.A.1.
140
      Compare SPA § 2.5(e), with Apr. Engagement Letter 2-4.
141
   Apr. Engagement Letter 1 (“The Tax Benefit Amount was prepared by [Darling] . . .
and delivered, pursuant to Section 2.5(h) of the Agreement, to Sellers[] . . . on October 14,
2022.”). The Sellers contend that the absence of Section 2.5(h)’s “any dispute” language
in the April Engagement Letter makes it makes it per se unreasonable. See Sellers’
Opening Br. 28-29; SPA § 2.5(h). But this language does not modify the scope of the
dispute resolution steps specified in Sections 2.5(c) to (e). See supra Section II.A.1.
                                             32
. . . are considered settled, final, and binding on the Parties.”142 This is consistent

with the “only those amounts in dispute” language of Section 2.5(e).143 Section

2.5(e) expressly permits Deloitte to consider Darling’s calculation of the Closing

Tax Benefit Amount and the protest notice (i.e., the November Protest Notice) when

resolving disputes over the Closing Tax Benefit Amount. Accordingly, any other

matters are deemed final and settled for purposes of Section 2.5(e).144

         The Sellers “agree[d] to execute, if requested by the Accountants, a reasonable

engagement letter.”145 The Agreement defines the ambit of Deloitte’s engagement.

Consistent with the Agreement, the April Engagement Letter is limited to the

amounts in dispute based on Darling’s calculation of the Closing Tax Benefit

Amount and the November Protest Notice.146 The April Engagement Letter is

142
      Apr. Engagement Letter 4.
143
   SPA § 2.5(e) (“The Accountants shall act as an expert . . . to determine, based solely on
the [Closing Tax Benefit Amount] and Protest Notice, together with all relevant supporting
documentation, and any other clarifying presentations and submissions by [Darling] and
Sellers[] . . . as [Deloitte] may reasonably request . . . and not by independent review, only
those amounts in dispute[.]”).
144
    Id.; see Penton, 252 A.3d at 467-69 (limiting an accountant to reviewing “the language
of the contract and operative accounting and tax principles,” consistent with the “plain and
unambiguous” terms of the agreement).
145
      SPA § 2.5(e).
146
   Compare id., with Apr. Engagement Letter 4 (“[Deloitte] will consider only those
specific items of disagreement identified by the Sellers’ Representative in its Protest
Notice; other amounts and issues related to the Closing Tax Benefit Amount having been
accepted by the Sellers’ Representative are considered settled, final, and binding on the
Parties.”).
                                             33
therefore reasonable under Section 2.5(e) of the Agreement.147 Darling is entitled to

a declaration to that effect.148

         C.    Whether Darling Is Entitled to Fees and Costs

         Section 10.17 of the Agreement entitles a prevailing party in a lawsuit

regarding the Agreement to recover its reasonable attorneys’ fees and costs.

Specifically, Section 10.17 states:

               In the event of any Suit in connection with this Agreement or any
               Ancillary Document, the prevailing Party in any such Suit shall
               be entitled to recover from the other Parties its costs and
               expenses incurred in connection with investigating, preparing,
               prosecuting, determining and/or settling such Suit, including
               reasonable legal fees and expenses.149

Darling has prevailed in this action and is receiving declaratory relief in its favor. It

is therefore entitled to its reasonable attorneys’ fees and costs incurred in pressing

147
    The Sellers cite Mehiel v. Solo Cup Co. for the proposition that Delaware courts should
refrain from making reasonableness determinations at the summary judgment stage. 2005
WL 1252348, at *8 (Del. Ch. May 13, 2005). This argument mischaracterizes the
precedent. In Mehiel, the court denied the seller representative’s request to order the buyer
to sign a “reasonable engagement letter” because: (i) the court lacked jurisdiction as the
parties’ agreement stipulated that the disputes would be resolved by an arbitrator; and
(ii) specific performance was unavailable as the court would have to supply “essential
terms to the contract” given the parties’ failure to “define for themselves the most basic
guidelines for this arbitration.” Id. at 7-8. The present case is distinguishable from Mehiel
for at least two reasons. First, because Deloitte is serving as an expert and not an arbitrator,
I am empowered to determine the scope of Deloitte’s review. Second, I need not supply
essential terms because the dispute resolution process and scope of Deloitte’s review are
specified in the Agreement.
148
   See Penton, 252 A.3d at 470 (declaring that the expert accountant’s engagement was
limited to the scope provided in a dispute resolution provision).
149
      SPA § 10.17.
                                              34
its claims.150 Darling shall submit an affidavit outlining its reasonable fees and costs,

to which the Sellers can respond before the amount of fees to be awarded is set.

III.   CONCLUSION

       Darling’s motion for summary judgment is granted. The April Engagement

Letter is reasonable under Section 2.5(e) of the Agreement. The Sellers’ cross-

motion for summary judgment is denied. The parties are to confer on a proposed

form of implementing order and submit it within seven days.

150
   See Comrie v. Enterasys Networks, Inc., 2004 WL 936505, at *5 (Del. Ch. Apr. 27,
2004) (awarding the prevailing party costs and fees under a fee shifting provision in a stock
purchase agreement).
                                             35