Case Study: GloNav V. NXP

Law360, New York (November 14, 2011, 3:24 PM EST) -- Frequently, buyers and sellers end up litigating the earn-out provisions in their merger agreements. In a recent memorandum opinion, GloNav Inc., et. al v. NXP B.V., Civ. A. No. 5110 — VCG (Del. Ch., Nov. 4, 2011), the Delaware Chancery Court applied the step transaction doctrine in deciding that a subsequent joint venture (JV) transaction involving NXP (Buyer) triggered its obligation to make certain contingent (earn-out) payments under its merger agreement (MA) with GloNav (Seller).

However, in denying Seller's representative’s motion for summary judgment, the court...
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