Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Nov. 30 — An IAC/InterActive Corp. subsidiary can’t pursue a claim that it was fraudulently induced into overpaying for the Investopedia website, the Delaware Chancery Court ruled Nov. 30 ( IAC Search LLC v. Conversant LLC , 2016 BL 397489, Del. Ch., No. 11774-CB, 11/30/16 ).
IAC Search LLC in January 2014 bought six ValueClick Inc. subsidiaries for $90 million. One of the subsidiaries was Investopedia LLC, which operates a financial education website. IAC alleged that ValueClick—now known as Conversant LLC—misrepresented Investopedia’s advertisement sales during the due diligence phase.
IAC can’t bring its fraud claim because the parties’ agreement disclaimed reliance on statements made outside the contract, such as during the due diligence process, Chancellor Andre G. Bouchard ruled.
The decision provides further guidance on how the Delaware courts will treat non-reliance provisions—clauses stating that the parties haven’t relied on extra-contractual information. Bouchard found that certain provisions in the parties’ agreement added up to “a clear anti-reliance clause.”
The court cited its previous decisions in Prairie Capital III v. Double E Holding Corp., 2015 BL 386569, and FdG Logistics LLC v. A&R Logistics Holdings Inc., 2016 BL 50399, which clarify that there are no “magic words” to implement a clause stating that the buyer didn’t rely on extra-contractual statements. The decisions also found that the disclaimer must come from the buyer rather than the seller.
However, Bouchard allowed IAC to proceed with certain breach of contract allegations against ValueClick relating to the other subsidiaries. Those claims, unlike the fraud allegation, are subject to an $8 million indemnity cap under the parties’ agreement.
IAC, a New York-based online media company whose products and brands include HomeAdvisor, Vimeo, About.com, Dictionary.com and Match Group’s online dating portfolio, is also fighting another legal challenge at the chancery court unrelated to the ValueClick case. In that lawsuit, shareholders claim that IAC directors breached their fiduciary duties by agreeing to create a class of non-voting shares.
To contact the reporter on this story: Michael Greene in Washington at mGreene@bna.com
To contact the editor responsible for this story: Yin Wilczek at email@example.com
The opinion is available at http://www.bloomberglaw.com/public/document/IAC_SEARCH_LLC_Plaintiff_v_CONVERSANT_LLC_fka_VALUECLICK_INC_Defe.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)