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- The Delaware Supreme Court has allowed BitGo’s $100 million lawsuit against Galaxy Digital to proceed.
- This decision comes after the court found ambiguity in the $1.2 billion merger agreement terms.
- The case will now return to the Chancery Court for further evidence review.
Delaware Supreme Court allows BitGo’s $100M lawsuit against Galaxy Digital to proceed, citing ambiguity in the $1.2B merger agreement terms.
BitGo Granted Appeal in Lawsuit Against Galaxy Digital
In a filing dated May 22, the Delaware Supreme Court affirmed that the language in the merger agreement between BitGo and Galaxy Digital was “ambiguous.” Since the language is ambiguous, it is necessary to turn to extrinsic evidence to analyze the conflict.
This ruling overturns the June 2023 decision by the Delaware Court of Chancery that dismissed BitGo’s lawsuit. The lawsuit argued that Galaxy had a ‘clean termination right’ because BitGo had not provided audited financial statements for 2021 on time.
R. Brian Timmons, a lawyer from Quinn Emanuel, the law firm representing BitGo, expressed satisfaction with the Supreme Court ruling, stating, “We believe justice was done on appeal, and we are glad to proceed with this case in Chancery Court.”
Background of the Legal Dispute
BitGo sued Galaxy Digital in August 2022, accusing the company of an “intentional breach” of their merger agreement. The lawsuit arose after Galaxy declared it was withdrawing from the $1.2 billion acquisition deal, claiming BitGo had not submitted the required audited financial statements on time.
This acquisition was initially announced by Galaxy’s CEO, Mike Novogratz, in May 2021. However, by August 2022, Galaxy argued it was justified in terminating the contract due to BitGo’s failure to meet the agreement’s terms. The main point of contention was the interpretation of the term “financial statements.”
Implications of the Supreme Court Decision
By ruling in favor of reversing the lower court’s decision, the Delaware Supreme Court allows BitGo to proceed with its lawsuit against Galaxy Digital. The court of appeal held that both parties had some basis for their respective beliefs regarding what constituted acceptable financial documentation under the merger agreement.
This means that more analysis of extrinsic evidence is required to resolve the issue. The legal team representing BitGo is confident about the forthcoming proceedings in the Chancery Court. This decision marks a significant turning point in the ongoing legal battle, giving BitGo another chance to sue for the broken merger deal.
Conclusion
The Delaware Supreme Court’s decision to allow BitGo’s $100 million lawsuit against Galaxy Digital to proceed is a pivotal development in the ongoing legal battle. The ambiguity in the merger agreement terms necessitates further examination of extrinsic evidence. As the case returns to the Chancery Court, both parties will have the opportunity to present additional evidence to support their claims. This ruling not only impacts the involved parties but also sets a precedent for future merger agreements and legal interpretations in the crypto industry.