Three recent decisions by Delaware courts have addressed the appropriateness of equitable relief to acquire funds held in escrow post-closing of a transaction. In all three decisions, the Delaware courts (the Court of Chancery twice and the Superior Court once) concluded that the Court of Chancery’s equitable jurisdiction provided the most “certain, prompt, complete and efficient” relief. A common thread among these three cases is their reliance on a 2013 transcript ruling in SecNet Holding v. Potash, No. 7781-VCP (Del. Ch. April 2, 2013).
In SecNet, the Court of Chancery ordered a nonparty escrow agent to release $750,000 held in an escrow account, concluding that even if the plaintiff could obtain a judgment for the funds in escrow in a court of law (i.e., damages), the equitable power to enforce that judgment rests with the Court of Chancery (i.e., specific performance). Therefore, a legal remedy would be inadequate and not as certain, prompt, complete or efficient as an equitable remedy.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
