By Rose Krebs

Law360 (May 8, 2020, 9:34 PM EDT) -- A Delaware vice chancellor Friday rejected a speedy trial bid by Realogy Holdings Inc. on its suit to enforce a $400 million sale of its Cartus affiliate to SIRVA Inc., but said she wants to consider on an expedited basis SIRVA's contention procedural issues should sink the suit.

During a hearing held via telephone, Vice Chancellor Morgan T. Zurn resisted Realogy's call for a September trial for the court to decide if the deal should close despite the buyer's claims that the global COVID-19 crisis had triggered an "material adverse effect" clause and absolute termination right per transaction provisions.

"Realogy is ready, willing and able to close," the company's attorney Edward B. Micheletti of Skadden Arps Slate Meagher & Flom LLP said. "SIRVA cannot avoid its obligations," he added.

Since both sides differ as to purchase agreement terms and whether a MAE clause is at play due to the public health crisis, Micheletti said there are important "facts that must be tried" and the longer delay before trial, the more harm Realogy will incur.

Micheletti accused SIRVA of "looking to gain tactical" advantage by opposing an expedited trial as the buyer hurls what he contends are "baseless" assertions it backed out of the deal for justified reasons.

As the deal neared closing, Micheletti contends SIRVA made a late-hour attempt to use the COVID-19 outbreak to bolt.

Even though SIRVA now asserts terms for financing the deal have expired, Micheletti argued the company still has "to show up with the money and close the deal."

"It's on them to figure out how to finance the deal," he asserted.

In its suit filed last month, Realogy sought to enforce the $400 million sale of its Cartus corporate relocation business to SIRVA, which is a Madison Dearborn Partners portfolio company.

The global real estate services company's suit accuses SIRVA, a worldwide moving and relocation service business, of falsely invoking pandemic-related MAE triggers in its contract to buy Cartus, including alleged risks that Realogy itself faced insolvency.

Realogy — which sought payment of a $30 million termination fee in the absence of an order to close — said SIRVA invoked the MAE claim without warning or basis on April 24, days ahead of a proposed closing on the deal.

"But even a cursory review of buyer's purported justifications demonstrates the falsity of its position," the suit said. "Buyer's arguments smack of 'buyer's remorse,' not a legitimate right to avoid closing the transaction."

By naming Madison Dearborn as a defendant in the suit, Realogy has triggered certain provisions that impacted the equitable remedy available to it, SIRVA attorney Andrew A. Kassof of Kirkland & Ellis LLP told the vice chancellor.

Kassof contended the remedy available to Realogy is the termination fee, not its bid for the court to order SIRVA to close the deal under "specific performance" provisions.

"The specific performance provision to closing can't be satisfied," Kassof argued. He contends certain provisions were also triggered because financing for the deal has expired.

Vice Chancellor Zurn said the fight over whether an MAE clause is at play and whether "an escape hatch" protecting SIRVA from a specific performance claim was triggered are issues to be decided another day.

The vice chancellor told the parties to confer on briefing and scheduling issues, but said she wants filings submitted so she can consider any motion by SIRVA, based on the assertion that demanding SIRVA close the deal is not an available remedy in the case, in July.

Vice Chancellor Zurn also rejected Realogy's bid for a September trial, suggesting the possibility of a late November-December trial date.

New Jersey-based Realogy provides residential real estate services including brokerage, franchising, relocation, mortgage, and title and settlement work. The company's affiliated brokerages have about 190,000 independent sales agents in the United States and more than 110,000 in 120 other countries.

SIRVA was accused of claiming that the pandemic and other economic and company specific issues had a disproportionate material effect on the Cartus' business, allowing the prospective buyer to walk away.

"Nothing could be further from the truth. If there is a disparate impact caused by COVID-19, it is with SIRVA, not Cartus," Realogy asserted in its complaint.

In a statement, SIRVA contended it had been working to complete the Cartus acquisition but became concerned about satisfaction of conditions for the deal after receiving information about Cartus' actual and forecast performance.

The sale agreement, signed in November 2019, calls for a $375 million cash payment, subject to closing adjustments, with $25 million payable afterward.

Realogy Holdings Corp. is represented by Edward B. Micheletti, Cliff C. Gardner, Jessica R. Kunz, Rupal K. Joshi and Justin C. Barrett of Skadden Arps Slate Meagher & Flom LLP.

SIRVA, Madison Dearborn and affiliates are represented by William M. Lafferty, Kevin M. Coen, Adam T. Nyenhuis and Sarah P. Kaboly of Morris Nichols Arsht & Tunnell LLP and Andrew Kassof, Timothy W. Knapp, Howard M. Kaplan and Jonathan N. Adair of Kirkland & Ellis LLP.

The case is Realogy Holdings Corp. v SIRVA Worldwide Inc., case number 2020-0311, in the Court of Chancery of the State of Delaware.

--Additional reporting by Jeff Montgomery.

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