A recent opinion by Vice Chancellor Tamika Montgomery-Reeves illustrates the pitfalls in not specifically addressing the scope of “mutual general releases” when agreeing to settle litigation. The case, Emerging Europe Growth Fund v. Figlus, (Del. Ch. Dec. 10, 2018), concerned the interpretation of “mutual general release” language in a settlement agreement. The issue before the vice chancellor was whether the parties intended to release their Ukrainian divorce proceedings, including an ongoing case the ex-wife filed regarding unpaid alimony, when they settled their actions in the Delaware Court of Chancery.

The parties agreed that they had  reached an enforceable settlement agreement resolving two pending cases between them in Delaware. They also agreed on the essential terms of the agreement: the payment of money, the transfer of partnership interests and a “mutual general release.” They disagreed only on the scope of the mutual general release that was included in the settlement.