The Delaware Court of Chancery has granted a motion by Galaxy Digital, resulting in the dismissal of BitGo’s case following the abandoned acquisition.
Vice chancellor J. Travis Laster affirmed that Galaxy Digital had the right to terminate the acquisition of BitGo, asserting a “clean termination right” in their decision announced in 2022.
According to official court documents filed on June 9, vice chancellor J. Travis Laster dismissed BitGo’s complaint against Galaxy Digital, imposing a dismissal with prejudice. This decision comes after Galaxy Digital withdrew its intent to acquire BitGo in August 2022 as part of a substantial $1.2 billion deal.
The withdrawal was made due to alleged breaches of contract by BitGo. In response, BitGo responded by filing a lawsuit against Galaxy Digital, seeking $100 million in damages due to Galaxy’s failure to pay the reverse termination fee outlined in the agreement.
“There are no facts alleged that could make it reasonably conceivable that the exercise of the termination right was inconsistent with the implied covenant of good faith and fair dealing.”
J. Travis Laster, vice chancellor.
However, according to court documents, the inclusion of the documents in Form S-1, prepared in compliance with Regulation S-X, was hindered by a use restriction, leading to their classification as non-compliant.
To navigate the legal process, BitGo had previously enlisted the support of global law firm Quinn Emanuel. R. Brian Timmons, a partner at Quinn Emanuel, who emphasized that BitGo has fulfilled its obligations under the agreement, including providing audited financials.
In response, a spokesperson from BitGo expressed their intention to appeal the court’s decision, asserting that Galaxy’s termination of the agreement was unjust.
On the other hand, Galaxy Digital was quick to take to Twitter, sharing their agreeance with the court’s decision, urging their followers to “focus on the task at hand.”
A turn of events
The court’s ruling signifies a significant turn of events in the legal battle between the two firms.
The dismissal with prejudice suggests that BitGo’s complaint has been permanently dismissed and cannot be refiled. The decision follows extensive efforts by Galaxy Digital to fulfill the acquisition agreement, ultimately resulting in the withdrawal due to alleged breaches.
Prior to news on the lawsuit, BitGo had undergone a hard fork upgrade to tackle issues of gas fee spikes and announced the integration of Polygon, further solidifying its position as a provider of safer asset custody for users.