ASC Intermediate Holding Company v. Jammet, 2024-0992-MAA

ASC Intermediate Holding Company and Advanced Fire Protection Systems, LLC (“Buyers”) purchased a Maryland LLC via a Securities Purchase Agreement (“SPA”) from Bernard Jammet and Justin Szurek (“Sellers”).
The SPA included a detailed pricing and adjustment mechanism based on accounting factors and allowed disputes over those calculations to go to binding arbitration.
Post-closing, Buyers found discrepancies in the Company’s financial statements and accounting practices, alleging inflated purchase price and fraudulent inducement.
The parties submitted the dispute to arbitration as required by the SPA, where the arbitrator ruled on the proper accounting treatment and issued a purchase price adjustment.
Buyers sought further damages and indemnification in Delaware Chancery, leading Sellers to move to dismiss certain counts as precluded by the arbitration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether arbitration precludes further relief	Arbitration did not fully resolve all claims, such as fraud	Arbitration resolved factual disputes and adjustment of purchase price	Counts III (fraud) and IV (breach of contract) barred by collateral estoppel
Anti-reliance clause bars fraud claims	SPA’s anti-reliance clause does not bar fraud by sellers	Clause expressly disclaims reliance on extra-contractual representations	Not reached; collateral estoppel already bars claim
Sufficiency of pled fraud and contract claims	Claims are adequately pled under Rule 9(b) and contract law	Claims are not specific enough to meet Rule 9(b) and contract requirements	Not reached; collateral estoppel already bars claims
Right to indemnification for arbitration-related claims	Entitled to indemnification for attorneys’ fees and enforcement of SPA	SPA sections bar indemnification for issues decided in arbitration	Buyers may pursue indemnification for Counts I and II; Count V not dismissed

LaPoint v. AmerisourceBergen Corp., 970 A.2d 185 (Del. 2009) (discusses res judicata requirements under Delaware law)
Betts v. Townsends, Inc., 765 A.2d 531 (Del. 2000) (defines collateral estoppel under Delaware law)
Kronenberg v. Katz, 872 A.2d 568 (Del. Ch. 2004) (clear anti-reliance clause bars extra-contractual fraud claims)
Brookfield Asset Management, Inc. v. Rosson, 261 A.3d 1251 (Del. 2021) (double recovery rule prevents duplicative damages)
Box v. Box, 697 A.2d 395 (Del. 1997) (collateral estoppel applies to factual determinations regardless of prevailing party)