Litigation Team Secures Dismissal of Litigation Complaint Against Invesco Affiliate
A Ropes & Gray litigation team recently won dismissal with prejudice of litigation filed against an affiliate of Invesco in the Southern District of New York, arising from an earn-out dispute under an acquisition agreement.
The litigation was brought by former shareholders of SNW Asset Management Corporation (SNWAM), an asset management firm acquired by OFI Global, which was in turn indirectly acquired by Invesco. The plaintiffs alleged that after they sold SNWAM, OFI Global beached the parties' sale and purchase agreement by purportedly failing to use “best efforts" to achieve levels of assets under management sufficient for plaintiffs to achieve the full earn-out amount potentially available under the agreement. After Ropes & Gray moved to dismiss the complaint on behalf of OFI Global, plaintiffs also asserted that their claims could be sustained under the implied covenant of good faith and fair dealing.
In September 2022, District Judge Louis L. Stanton issued a decision agreeing with the arguments advanced by Ropes & Gray, holding that the “best efforts" clause plaintiffs sought to rely upon did not control the dispute, and that plaintiffs had not stated a claim under the controlling provisions of the contract—which required plaintiffs to plead that OFI Global had taken steps to purposefully thwart plaintiffs from receiving the full amount of the earn-out. The Court also agreed that plaintiffs had abandoned any implied covenant claim when they filed the operative amended complaint, and, in any event, there was no basis for any such claim under New York law. Accordingly, the Court dismissed the complaint in its entirety with prejudice, while expressly denying plaintiffs leave to amend their claims.
The Ropes & Gray team included litigation & enforcement partner Adam Harris and associate Deanna Minasi.