The Delaware Supreme Court has reversed a previous decision that dismissed BitGo’s $100 million lawsuit against Galaxy Digital.
The Supreme Court of Delaware reversed a previous decision that dismissed BitGo’s lawsuit against Galaxy Digital, which had a potential value of $100 million.
The judgment will make it possible for the exchange to move forward with its case, which is challenging Galaxy Digital’s decision to terminate a merger agreement worth $1.2 billion at the time.
BitGo Granted Appeal in Lawsuit Against Galaxy Digital
According to a document that was submitted on May 22nd, the Supreme Court of Delaware affirmed that the language that was included in the merger agreement between BitGo and Galaxy Digital was “ambiguous.”
Because the language is ambiguous, it is critical to rely on evidence that is not intrinsic in order to conduct an analysis of the conflict. This order overturns the Delaware Court of Chancery’s June 2023 decision to dismiss the exchange’s case.
The lawsuit contended that Galaxy had a “clean termination right” due to the fact that BitGo had not delivered audited financial accounts for 2021 in a timely manner. R. Brian Timmons, the attorney representing BitGo at Quinn Emanuel, expressed his satisfaction with the Supreme Court’s decision.
Background of the Legal Dispute
In August 2022, The exchange filed a lawsuit against Galaxy Digital, accusing the latter of committing an “intentional breach” of a merger agreement between the two companies. Galaxy filed the lawsuit after announcing its abandonment of a contract to acquire BitGo for 1.2 billion dollars.
The reason given for the withdrawal was that Galaxy claimed that the exchange had failed to provide the required audited financial statements on time. Mike Novogratz, the CEO of Galaxy, announced this transaction in May 2021.
On the other hand, by August 2022, Galaxy asserted that it had the right to terminate the contract with BitGo because the latter had failed to fulfill the conditions of the agreement.
Implications of the Supreme Court Decision
The disagreement revolved mostly around the interpretation of the term “financial statements,” which was the primary source of the conflict. The Delaware Supreme Court’s decision to grant the motion to reverse the lower court’s decision allows BitGo to proceed with its lawsuit against Galaxy Digital.
The court of appeals came to the conclusion that both parties had some foundation for their separate beliefs regarding the types of financial documentation that were considered acceptable in accordance with the merger agreement.
We can conclude from this that further examination of the non-intrinsic material is necessary to determine the appropriate response to the issue.
The legal team that represents BitGo is optimistic about the upcoming procedures that will take place in the Chancery Court. Considering that this judgment represents a crucial turning point in the current legal battle, it provides BitGo with an additional opportunity to file a lawsuit for the broken merger arrangement.