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Aug. 22 — Renco Group Inc. can't pursue certain claims against a MacAndrews & Forbes Holdings Inc. subsidiary in a dispute over the distribution of profits from the parties' joint venture, the Delaware Chancery Court ruled Aug. 22 ( AM Gen. Holdings LLC v. Renco Grp. Inc. , 2016 BL 271706, Del. Ch., No. 7639-VCS, 8/22/16 ).
Vice Chancellor Joseph R. Slights III found that certain aspects of Renco's breach of contract claims against MacAndrews were filed too late.
According to the court's ruling, the parties in 2004 entered into a complex joint-venture transaction that created an entity known as AM General Holdings LLC. Renco alleged that MacAndrews unfairly leveraged its position as a managing member of the joint venture at the expense of minority stakeholders.
The court ruling further trims down the issues left to be resolved in the long-running legal dispute. The court also provided guidance on how it will determine when the statute of limitations has expired for breach of contract claims.
Renco filed its lawsuit against MacAndrews in 2012. The court in 2015 dismissed Renco's breach of fiduciary duties, tortious interference with contract and fraudulent transfer claims. However, the court determined that Renco could proceed on its breach of contract claims (13 CARE 312, 2/13/15).
MacAndrews argued that the three-year statute of limitations had expired for certain of Renco's breach of contract allegations because the claims involved conduct that began 10 years ago or earlier.
The court agreed, finding the statute of limitations hadn't been tolled because the parties' business venture didn't involve a “mutual, running account.”
“Renco has alleged clearly divisible and separately actionable breaches of the Holdco Agreement which do not arise from a single, perpetual account,” Slights wrote. “Nor does the record support Renco’s contention that MacAndrews AMG has engaged in a single, continuous breach of contract such that its claims for breach will not accrue until the Holdco Agreement is terminated.”
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The court's opinion is available at http://www.bloomberglaw.com/public/document/AM_GENERAL_HOLDINGS_LLC_directly_and_derivatively_on_behalf_of_Il.
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