In Evolve Growth Initiatives v. Equilibrium Health Solutions, 2023 WL 4760547 (Del. Ch. Jul. 26, 2023), Vice Chancellor Sam Glasscock III considered an action to enforce an arbitration award by the American Arbitration Association. The award held that the seller representative in a transaction for the sale of a company was personally liable for damages and legal fees for breach of the purchase agreement. The seller representative, while a party to the arbitration, was not defined as a “seller” under the terms of the purchase agreement. The court’s confirmation of the award demonstrates the extent to which a court will go to confirm an arbitration award even where, as the Vice Chancellor found, the arbitration proceeding and the resulting award were flawed.

The sellers, Equilibrium Health Solutions, M&A Healthcare and Ducat HC, sold Evolve Growth Initiatives to the buyers pursuant to a membership interest purchase agreement (MIPA). Daryl Hagler, an owner of Equilibrium, served as the seller representative under the MIPA. Hagler was not a “seller” as defined in the MIPA. Plaintiffs Evolve, Evolve Intermediate Holdings and Evolve Holdco were defined as “buyer indemnified persons.”