December 7, 2011
Delaware: Post-Closing Indemnity Claims by a Former Parent
From John Grossbauer of Potter Anderson: This recent Clubcorp opinion from the Delaware Court of Chancery deals with post-closing indemnity claims by a former parent company of Pinehurst LLC under an indemnification agreement relating to the purchase of Pinehurst, which was spun out of Clubcorp in connection with the acquisition of Clubcorp by a company called Fillmore.
The Court declined to grant permission for successors by merger to the Clubcorp entities bringing the indemnification claims, finding that the anti-assignment provision in the indemnity covenant, which prohibited assignments by operation of law, and the successors and assigns provision were ambiguous on the issue when read together.
The Court also denied summary judgment on the substantive claims at issue, declining to find prejudice in a failure to notify Pinehurst of certain indemnity claims within the time provided in the contract, and finding disputed factual issues prevented summary judgment on whether the tax and insurance claims at issue were covered by the relevant clauses of the indemnification agreement.