2023-0647-LWW
Del. Ch.Oct 29, 2024Background
- In 2021, Servicios Funerarios GG S.A. de C.V. (a Mexican company) bought Grupo Gayosso, a Mexican funeral services company, from Advent International and its affiliated private equity funds.
- The transaction included a Share Purchase Agreement (SPA) and a Guarantee: Advent’s funds guaranteed the Sellers’ indemnification obligations to the buyer, in return for various waivers and a Delaware forum selection clause for disputes.
- Servicios Funerarios later filed civil and criminal actions in Mexico, and a civil suit in Massachusetts, against Advent International and related entities, despite the contractual waivers and forum clause.
- Advent sued Servicios Funerarios in Delaware Chancery Court, seeking to enforce the Guarantee, prevent litigation outside Delaware, and enjoin the Mexican proceedings.
- The Chancery Court previously issued an anti-suit injunction barring the Mexican civil action against Advent International, and addressed the reach and enforceability of the Guarantee and associated contractual waivers.
Issues
| Issue | Advent’s Argument | Servicios Funerarios’s Argument | Held |
|---|---|---|---|
| Enforceability of Guarantee | Guarantee is valid, waivers and forum selection clause are enforceable under Delaware law | Guarantee invalid due to fraud in SPA; attempts to invoke public policy exceptions to circumvention of contractual protections | Guarantee is valid and binding; anti-reliance/integration bars extra-contractual fraud claims |
| Breach & Termination | Mexican civil suit and other non-Delaware actions breach Guarantee, triggering termination | Guarantee should not terminate due to alleged fraud in SPA or because Guarantee and SPA should be read together | Guarantee terminated upon breach (filing Mexican action); contractual releases survive termination |
| Scope of Anti-Suit Relief | Seeks to enjoin Mexican civil and criminal actions against Advent entities | Argues against extension to criminal action (comity), and against inclusion of Advent Mexico due to procedural delay | Court enjoins civil action against Advent Int’l only; denies further injunctions on criminal action (comity) & Advent Mexico (laches) |
| Declaratory and Injunctive Relief | Seeks broad declaratory relief as to all international proceedings and parties | Seeks denial or limitation of such relief based on merits and procedural grounds | Relief granted only as to core breaches; other declaratory/injunctive relief declined as moot or barred |
Key Cases Cited
- ABRY Partners V, L.P. v. F&W Acquisition LLC, 891 A.2d 1032 (Del. Ch. 2006) (distinguishing intra- from extra-contractual fraud; enforcing anti-reliance clauses)
- Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228 (Del. 1997) (clear contract terms control absent ambiguity)
- Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153 (Del. 2010) (objective theory of contracts; ambiguity standard)
- Whittington v. Dragon Grp., L.L.C., 991 A.2d 1 (Del. 2009) (laches: elements and application)