BitGo has been given another chance to pursue legal action against Galaxy Digital regarding their terminated $1.2 billion merger deal.
Delaware Supreme Court Reopens BitGo v. Galaxy Digital Case
This comes after the Supreme Court of Delaware decided to reverse an earlier decision that had dismissed BitGo's $100 million lawsuit against Galaxy Digital.
The merger agreement's wording is ambiguous, as the Supreme Court's ruling on May 22 demonstrates, and extrinsic evidence is required to settle the disagreement. This verdict overturns the Delaware Court of Chancery's June 2023 finding, which had found in favor of Galaxy Digital by virtue of their "clean termination right" because BitGo had delayed delivering audited financial accounts for 2021.
R. Brian Timmons, a partner at Quinn Emanuel, the legal counsel representing BitGo, expressed contentment with the Supreme Court's ruling, stating, "We believe that the appellate process has upheld justice, and we are pleased to proceed with this case in the Chancery Court."
BitGo Claims Willful Vulnerability While Galaxy Contests Termination Order
BitGo filed a lawsuit in August 2022, alleging that Galaxy Digital had violated the acquisition agreement "intentionally." BitGo filed a lawsuit seeking $100 million in damages, claiming that Galaxy's withdrawal from the agreement was not BitGo's fault but rather the result of Galaxy's financial struggles during the bear market for cryptocurrencies. On the other hand, Galaxy argues that BitGo's tardiness in delivering the required audited financial accounts was the reason behind its decision to call off the acquisition.
The merger, which Galaxy CEO Mike Novogratz announced in May 2021, was canceled in August 2022. The disagreement revolves around the interpretation of financial statements outlined in the agreement.
Initially, Delaware Chancery Court Vice Chancellor J. Travis Laster ruled in favor of Galaxy, citing non-compliant financial documents submitted by BitGo. However, the recent decision from the Supreme Court found ambiguity in the definition of financial statements, leading to a need for further investigation and consequently reopening BitGo's lawsuit.
May 2024, Cryptoniteuae