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Brace Industrial Contracting Inc. v. Peterson Enterprises Inc.

Court of Chancery of Delaware

July 10, 2018

Brace Industrial Contracting, Inc., et al.,
v.
Peterson Enterprises, Inc., et al.,

          Submitted: May 23, 2018

          Michael P. Kelly, Esquire Andrew S. Dupre, Esquire Benjamin A. Smyth, Esquire McCarter & English, LLP

          Robert A. Penza, Esquire Christopher M. Coggins, Esquire Polsinelli PC

          SAM GLASSCOCK III VICE CHANCELLOR

         Dear Counsel:

         What follows is my decision regarding the Plaintiffs' "Motion for Reconsideration" due to alleged errors in my April 12, 2018 Bench Ruling (the "April Bench Ruling"), which amended some of the preliminary findings in my March 29, 2018 Bench Ruling (the "March Bench Ruling" and, together, the "Bench Rulings").

         As I have written upon this matter at some length previously, non-party individuals interested (if any there be) are referred to the previous decisions in the record for a recitation of issues already resolved in this litigation. The issues subject to this Motion arose, in part, due to a ten-day delay in the closing of a corporate sale, rendering the parties' accountings concerning the transaction-as required both by contract and this litigation-incompatible. I will not here repeat the voluminous factual record developed in this case. Instead, I address only the facts pertinent to this Motion; the remainder of the facts have been laid out, adequately in my view, in the prior opinions.

         Because, upon review, I find that I did not misapprehend the law or the facts, I deny the Plaintiffs' Motion, which I consider to be a motion for reargument. In addition, I adopt the reasoning stated in the March Bench Ruling, as amended and supplemented by the April Bench Ruling. Finally, I reject the Defendants' request for sanctions. My reasoning follows.

         I. ANALYSIS

         "To prevail on a motion for reargument under Rule 59(f), the moving party must demonstrate that the Court either overlooked a decision or principle of law that would have controlling effect or misapprehended the facts or the law such that the outcome of the decision would be different."[1] The moving party "bear[s] a heavy burden on a Rule 59 motion. Such motions are not a mechanism for litigants to relitigate claims already considered by the court."[2]

          A. I Find No Error of Fact

         This matter was the subject of a multi-day trial, and involves a voluminous record. I have carefully reviewed that record and given the evidence the weight that I find it deserves. I find the Bench Rulings consistent with the facts in the record as I have found them.

         The parties created two categories for line items in connection with the accounting required in this dispute: a post-closing adjustment (the "PC Adjustment") to be performed by an accounting firm (ultimately, by CohnReznick), and a "due to/from" adjustment (the "DTF Adjustment") to be determined by this Court. The merger agreement called for closing on a date certain, but closing actually occurred on a later date, requiring changes to the manner in which the adjustments were computed. The parties initially addressed these adjustments in contradictory ways, leading the Plaintiffs' expert, Steven Kops, to create a Rebuttal Report to align the categories in a way that allowed comparison. According to Kops, "both methods offer a certain level of validity" and "produce the same net result," whether these amounts "should be determined within the [PC] Adjustment [by the accounting firm] or, instead, here in the [DTF] Adjustment (Delaware Court of Chancery)."[3] As n oted in the April Bench Ruling, the "key to fair treatment in these circumstances is consistency―mixing assumptions leads to inadvertent windfalls."[4] The question before me involves which items belong to which categories, in light of the PC Adjustment resolution per the CohnReznick Report.

         At trial, the Plaintiffs relied on the testimony of their expert, Mr. Kops. I found Kops more credible than the Defendants' witnesses.[5] In attempting to resolve the issues before me in the March Bench Ruling, I started my analysis with the figures from the Kops Initial Report. ...


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