In Surf’s Up Legacy Partners (f/k/a KAABOO) v. Virgin Fest, C.A. No. N19C-11-092 PRW CCLD (Del. Super. Jan. 13, 2021), Superior Court Judge Paul Wallace, in an opinion resounding with musical allusions, invoked the affiliate privilege doctrine to dismiss a claim for tortious interference. As Wallace explained, although not absolute, the affiliate privilege doctrine can immunize a controller from tort liability for its affiliates’ contractual breaches.

The plaintiffs, the KAABOO Entities, planned and operated live music and outdoor entertainment festivals. They sought to strengthen their position in the industry and approached the Virgin Group to collaborate with them on future ventures. This led to the creation of the defendants, the Virgin Fest Entities, including Virgin Fest, which wholly owned the other Virgin Fest Entities and was managed by Virgin Fest Investco. Over the course of time, the parties executed a number of agreements, including an asset purchase agreement, which provided for the transfer of assets from the KAABOO Entities to the Virgin Fest Entities. In the APA, the KAABOO Entities represented that they had disclosed to the Virgin Fest Entities all of the material liabilities in their company family.