ADVENT INTERNATIONAL, L.P f/k/a/ ADVENT INTERNATIONAL CORPORATION, ADVENT INTERNATIONAL PE ADVISORS, S.C., ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III-A LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III-B LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III-C LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III-D LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III-E LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III-F LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND III-G LIMITED PARTNERSHIP, ADVENT PARTNERS LAPEF III LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV-A LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV-B LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV-C LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV-D LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV-E LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV-F LIMITED PARTNERSHIP, ADVENT LATIN AMERICAN PRIVATE EQUITY FUND IV-G LIMITED PARTNERSHIP, ADVENT PARTNERS LAPEF IV LIMITED PARTNERSHIP, ADVENT PARTNERS III LIMITED PARTNERSHIP v. SERVICIOS FUNERARIOS GG S.A. DE C.V.
C.A. No. 2023-0647-LWW
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
October 29, 2024
Date Submitted: July 31, 2024
WILL, Vice Chancellor
Peter J. Walsh, Jr., Aaron R. Sims & Charles R. Hallinan, POTTER ANDERSON & CORROON LLP, Wilmington, Delaware; David Boies & Marc Ayala, BOIES SCHILLER FLEXNER LLP, Armonk, New York; Carlos M. Sires, BOIES SCHILLER FLEXNER LLP, Fort Lauderdale, Florida; Counsel for Defendant
WILL, Vice Chancellor
The buyer nevertheless initiated civil and criminal proceedings in Mexico against the private equity firm affiliated with the guarantor funds—a contractual non-party. In response, the guarantors and private equity firm sued the buyer in this court, seeking anti-suit injunctions and declaratory relief. Since the private equity firm’s substantive response to the Mexican civil action was due imminently, I expedited consideration of that claim. In June, I enjoined the buyer from prosecuting the Mexican civil action against the private equity firm.
Now, I resolve the remaining non-expedited issues. I decline to issue an anti-suit injunction of the Mexican criminal action for reasons of international comity. And I clarify that, due to laches, the injunction of the Mexican civil action does not extend to the private equity firm’s Mexican affiliate. On the contract claims, however, I enter judgment largely in the private equity plaintiffs’ favor. I hold that the buyer breached the guarantee, causing it to terminate by its terms.
This decision complements a June 7, 2024 memorandum opinion (the “June Opinion”) that granted partial summary judgment and denied motions to dismiss.1 The facts framing this dispute are set out in the June Opinion and remain unchanged. For the benefit of the reader, I recount the basic facts below.
Unless otherwise noted, the following summary is drawn from the undisputed facts outlined in the June Opinion, the pleadings, and exhibits submitted by the parties.
A. The Share Purchase Agreement
In 2021, Servicios Funerarios GG S.A. de C.V.—an acquisition vehicle of a Mexican real estate investor—purchased Mexican funeral company Grupo Gayosso S.A. (“Gayosso”) from Advent International Corporation, a private equity firm.2 At the time, Advent International owned substantially all of Gayosso’s capital stock through various affiliated funds (the “Guarantors”).3 The Guarantors’ interests in Gayosso were, in turn, held through seven special purpose vehicles (the “Sellers”).4
B. The Guarantee
As a condition to and concurrent with the SPA, the Guarantors executed a financial guarantee (the “Guarantee”) of the Sellers’ indemnification obligations to Servicios Funerarios up to the full purchase price.7 In exchange, Servicios
Servicios Funerarios preserved two pathways to recover for wrongdoing related to the Gayosso transaction: suing (1) the Guarantors under the Guarantee, or (2) the Sellers under the SPA.10 Servicios Funerarios “irrevocably agree[d] that any permitted Claim [would] be brought exclusively in the state and federal courts located in the . . . State of Delaware.”11
Several provisions of the Guarantee reflect Servicios Funerarios’s agreement to waive or disclaim its ability to bring claims against non-parties.
covenants and agrees that it shall not institute or assert . . . any action or proceeding or bring any other Claim . . . of any kind whatsoever against the Guarantors, [the Sellers] or any other Non-Parties . . . except for claims against: (i) the Guarantors under and pursuant to this Guarantee and (ii) [the Sellers] under and pursuant to the Agreement.12
Section 9(a) is a non-recourse clause. Servicios Funerarios agreed that a Claim “may be made or asserted only against (and [is] expressly limited to) the Guarantors.”13 It also confirmed that no “Non-Parties . . . shall have any liability or obligation” to it “in respect of any Claims.”14
Section 9(b) is a release and anti-reliance provision. Servicios Funerarios broadly “waive[d], release[d] and disclaim[ed] any and all Claims against all Non-Parties, including, without limitation, any Claims to avoid or disregard the entity form of any Guarantor or otherwise seek to impose any liability arising out of, relating to or in connection with a Claim on any Non-Parties . . . .”15 It also “disclaim[ed] any reliance upon any Non-Parties with respect to the performance of
Section 9(c) is another covenant not to sue. Servicios Funerarios confirmed that it would not bring:
any Claim whatsoever against . . . Non-Parties . . . in connection with th[e] Guarantee or the [SPA] or any transactions contemplated hereby or thereby . . . other than a claim . . . against the Guarantors for payment or performance of the Obligations pursuant to (and as limited by) the terms of th[e] Guarantee or . . . against [the Sellers] pursuant to [the SPA].17
The Guarantee includes a termination clause in Section 8. The parties agreed that if Servicios Funerarios brought claims in breach of Section 9, the Guarantee would “terminate automatically and immediately.”18 In full, the provision states that:
Th[e] Guarantee shall terminate automatically and immediately . . . and the Guarantors shall have no further obligations under th[e] Guarantee as of . . . the date of commencement of any litigation or other proceeding by the Guaranteed Party or any Affiliate thereof . . . prohibited by Section 9 of th[e] Guarantee . . . .19
C. Servicios Funerarios’s Lawsuits
Fourteen months after the Gayosso transaction closed, in March 2022, Servicios Funerarios filed a civil suit in a Mexican federal court related to the SPA against Advent International, Advent International PE Advisors, S.C. (“Advent Mexico,” Advent International’s Mexican subsidiary), and various Advent-affiliated funds.21 Servicios Funerarios’s complaint alleged that the Sellers, Advent International, and Advent Mexico “omitted to truthfully reflect, disclose and/or record the financial and accounting reality of Gayosso . . . at the time of the signing of the SPA.”22 It sought damages and a judicial declaration that the SPA was a “nullity.”23
Four months later, in June 2022, Servicios Funerarios initiated a criminal proceeding with a Mexican prosecutor against Advent International, certain current and former Advent employees, and Advent Mexico.24 Under Mexican law, criminal proceedings can be initiated by non-state actors through a private complaint called a
Nearly a year later, in March 2023, Servicios Funerarios filed claims against Advent International in the United States District Court for the District of Massachusetts.27 The claims in Massachusetts involve alleged false representations in the SPA that induced Servicios Funerarios to enter into the Gayosso transaction.28
D. This Litigation
In June 2023, Advent International and affiliated funds (together, “Advent”) sued Servicios Funerarios in this court for breach of the Guarantee. They sought damages, declaratory judgments concerning the validity of the suit under the Guarantee, and an anti-suit injunction of the Mexican civil action. Briefing on cross-motions for summary judgment and to dismiss was completed in March 2024.29
In April 2024, after Advent International was served with the Mexican civil complaint and required to respond, the anti-suit injunction request was heard on an
I denied Servicios Funerarios’s motion to dismiss and concluded that the court had subject matter jurisdiction over the suit.31 I declined to stay this suit in deference to the Massachusetts action.32 And I held that the Mexican civil action breached the forum selection clause in the Guarantee.33 Supplemental submissions about the propriety of an anti-suit injunction for the Mexican criminal action were requested.34
My June 7, 2024 order (the “Injunction Order”) stated that “Servicios Funerarios is permanently enjoined from prosecuting the Mexican [c]ivil [a]ction in any forum other than the courts designated in the forum selection clause in Section 10 of the Guarantee.”35
For over a month, the parties remained unable to agree on how to implement the Injunction Order. The Mexican civil action proceeded. In July, Servicios Funerarios asked for permission to file a substantive reply to Advent International’s answer in the Mexican criminal action.37 I “decline[d] to affirmatively grant [it] permission to violate my [Injunction Order].”38 After a flurry of letters, a reasoned outcome emerged: the Mexican civil action was stayed at the request of the parties and with the blessing of the presiding judge.39
Meanwhile, the supplemental submissions requested by the June Opinion were filed. These submissions focused on the nature of the Mexican criminal action and whether this court can enjoin it.42
On July 31, 2024, oral argument on these issues was held.43
Notes
Under
Two categories of matters are before the court. The first category concerns whether Servicios Funerarios breached the Guarantee by pursuing prohibited litigation, and if so, whether the breach caused the Guarantee to terminate. The second category concerns Advent’s request to extend the Injunction Order to include (1) the claims against Advent Mexico in the Mexican civil action and (2) the Mexican criminal action.
I resolve the second category in favor of Servicios Funerarios. I decline to enjoin the Mexican criminal action based on international comity concerns. And though Servicios Funerarios breached the Guarantee by prosecuting the Mexican civil action against Advent Mexico, I decline to enter an injunction due to laches.
A. Breach and Termination of the Guarantee
“Under Delaware law, the elements of a breach of contract claim are: 1) a contractual obligation; 2) a breach of that obligation by the defendant; and 3) a resulting damage to the plaintiff.”46 Advent contends that the Guarantee obligated Servicios Funerarios not to sue “Non-Parties” like Advent International for claims involving the Gayosso transaction. It maintains that Servicios Funerarios breached the Guarantee by filing the Mexican and Massachusetts actions.
The Guarantee is governed by Delaware law.47 “Delaware law adheres to the objective theory of contracts,” meaning that “a contract’s construction should be that
1. Whether the Guarantee is Enforceable
Servicios Funerarios first asserts that the Guarantee is invalid and unenforceable because the Gayosso transaction was procured by fraudulent representations and warranties in the SPA. Whether fraud induced that transaction is before the Mexican and Massachusetts courts. The merits of Servicios Funerarios’s fraud claims have no bearing on this case, which concerns the Guarantee.
- Servicios Funerarios “disclaims any reliance upon any Non-Parties with respect to . . . any representation or warranty made . . . in connection with, or as an inducement to this Guarantee”;57 and
- the “Guarantee constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions . . . and agreements, whether written or oral . . . .”58
Servicios Funerarios also “agree[d] that it [would] not assert . . . that . . . the provisions of . . . Section 9 of this Guarantee [were] illegal, invalid or unenforceable in whole or in part[.]”59
Servicios Funerarios contends that Delaware law prohibits Advent from insulating itself from fraud using contractual limitations.60 It relies on ABRY Partners V, L.P. v. F&W Acquisition LLC, where the court explained that “when a seller intentionally misrepresents a fact embodied in a contract—that is, when a seller lies—public policy will not permit a contractual provision to limit the remedy of the buyer to a capped damage claim.”61 Then-Vice Chancellor Strine observed
But Servicios Funerarios is not asserting that the Guarantee contained fraudulent misrepresentations. Its fraud arguments concern the SPA, which is extraneous to the Guarantee. Servicios Funerarios raises the sort of “Double Liar scenario” rejected in ABRY.64 “[A] party cannot promise, in a clear integration clause of a negotiated agreement, that it will not rely on promises and representations outside of the agreement and then shirk its own bargain in favor of a ‘but we did rely on those other representations’ fraudulent inducement claim.”65
Servicios Funerarios acknowledges that the alleged fraudulent statements in the SPA fall outside the Guarantee’s four corners.67 It asserts that the court should nevertheless view the SPA and Guarantee as a single contract because the two were executed concurrently and effectuate one transaction.68 It cites case law concluding that where parties to a transaction “intend[ed] [two] documents to ‘operate as two halves of the same business transaction,’ . . . the Court must treat them as one contract.”69
Further, Servicios Funerarios‘s theory is undercut by its own argument that its claims in Massachusetts and Mexico are not prohibited by the Guarantee. It asserts that “[t]he Guarantee . . . only precludes claims against Non-Parties . . . that relate to the Guarantee“—not those that relate to the SPA.74 That is, it believes both that the Guarantee only bars claims arising from the Guarantee itself and that the Guarantee and SPA are interchangeable in negating the anti-reliance provision. These incompatible positions cannot coexist.75
In the June Opinion, I held that Servicios Funerarios breached the forum selection clause in Section 10 of the Guarantee. Now, I consider whether Servicios Funerarios breached the covenants not to sue, release, and non-recourse provisions in Sections 3(c) and 9 of the Guarantee. If Servicios Funerarios breached Section 9
a. Breach of Section 3(c) of the Guarantee
In Section 3(c) of the Guarantee, Servicios Funerarios “covenant[ed] and agree[d] that it [would] not institute or assert . . . any action or proceeding or bring any other Claim . . . except for claims against: (i) the Guarantors under and pursuant to this Guarantee and (ii) [the Sellers] under and pursuant to the [SPA].”76 This term barred Servicios Funerarios from filing lawsuits other than the permitted Claims against the Guarantors and Sellers.
Servicios Funerarios breached Section 3(c) when it brought Claims against Non-Parties, including the Mexican civil action against Advent International. I found in the June Opinion that both Advent International and Advent Mexico are “Non-Parties” as defined the Guarantee.77 Servicios Funerarios does not allege otherwise.
This breach did not, however, cause the Guarantee to terminate by its terms. Section 8 provides that the Guarantee terminates upon the “commencement of any
b. Breaches of Section 9 of the Guarantee
In Section 9 of the Guarantee, Servicios Funerarios agreed that it could only pursue certain defined Claims in connection with the Guarantee.
Section 9(a) is a non-recourse provision in which Servicios Funerarios agreed that a “Claim . . . may be made or asserted only against (and [is] expressly limited to) the Guarantors” and that “Non-Parties” had no “liability or obligation in respect of any Claims.”79
Similarly, in Section 9(b), Servicios Funerarios “waive[d], release[d] and disclaim[ed] any and all Claims against all Non-Parties,” and “disclaim[ed] any reliance upon any Non-Parties with respect to the performance of th[e] Guarantee or any representation or warranty made in connection with, or as an inducement to th[e] Guarantee.”80
As in Section 3(c), Servicios Funerarios confirmed in Section 9(c) that it was barred from “assert[ing] . . . any Claim . . . other than a claim . . . against the Guarantors for payment or performance of the Obligations pursuant to (and as
As explained, Advent International is a “Non-Part[y]” under the Guarantee.82 So is Advent Mexico.83 Yet Servicios Funerarios brought the Mexican civil action against Advent International and Advent Mexico. In doing so, Servicios Funerarios breached Sections 9(a), 9(b), and 9(c) of the Guarantee.
These breaches of Section 9 triggered the termination provision in Section 8(a), which states that the Guarantee “terminates” upon Servicios Funerarios commencing “any litigation or other proceeding . . . prohibited by Section 9.”84 Thus, the Guarantee terminated on March 24, 2022 when Servicios Funerarios filed the Mexican civil action against Advent International and Advent Mexico. The prohibitions and releases in Section 9 concerning claims against “Non-Parties” remain in effect.85
c. Servicios Funerarios‘s Arguments Against Termination
Servicios Funerarios argues that even if it initiated litigation prohibited by Section 9 of the Guarantee, the Guarantee would not terminate if the Sellers’
Section 8 provides for automatic termination of the Guarantee upon “the earlier of” three circumstances: (a) the date Servicios Funerarios commences litigation “prohibited by Section 9“; (b) for any individual Guarantor, when that Guarantor‘s maximum guarantee obligation is satisfied; or (c) when 90 days have elapsed after the Sellers’ obligation to indemnify Servicios Funerarios under Section 9(f) of the SPA terminates.87 Section 8 adds that the Guarantee “remain[s] in full force and effect indefinitely with respect to a Payment Event arising as a result of” inaccurate representations by the Sellers in enumerated provisions of the SPA.88
Servicios Funerarios calls this “full force and effect” provision a “[t]ermination [c]aveat” and argues that it qualifies each of the three termination criteria in Sections 8(a), 8(b), and 8(c).89 Advent, however, argues that the so-called
The caveat is nonsensical as applied to Section 8(a), which concerns termination of the Guarantee due to Servicios Funerarios‘s own breaches. Similarly, regarding Section 8(b), it would be unreasonable for the Guarantors to have additional obligations due to the “[t]ermination [c]aveat” if they satisfied their maximum payment obligations.
But, read together with the SPA, the caveat makes sense as applied to Section 8(c).91 Under Section 9(f) of the SPA, the Sellers’ obligations to indemnify Servicios Funerarios for false representations is time-limited, except for “Fundamental Representations” that “survive indefinitely.”92 These “Fundamental
Because Section 8 contemplates termination upon “the earlier of” the three circumstances in Section 8 and Section 8(a) was triggered first, it is irrelevant that the caveat might prevent termination of the Guarantee under Section 8(c). To hold otherwise would permit Servicios Funerarios to breach its promises not to sue Non-Parties except for permitted Claims against the Guarantors so long as it alleged that
* * *
The Guarantee is a valid and binding contract. Servicios Funerarios has breached Sections 3(c) and 9(a)-(c) of the Guarantee by suing Advent International and Advent Mexico in the Mexican civil action. As a result of the breaches of Section 9, the Guarantee terminated under Section 8(a) upon the filing of the Mexican civil action against Advent International and Advent Mexico.
Advent is entitled to the related declaratory relief sought in Count IV to its Complaint in part. Servicios Funerarios was contractually barred by the Guarantee from bringing the Mexican civil action against Advent International and Advent Mexico. Advent is also entitled to the declaration sought in Count V that the Guarantee terminated no later than March 24, 2022 when Servicios Funerarios filed the Mexican civil action.
Advent also seeks declaratory relief regarding the Massachusetts action and the Mexican criminal action.96 But given that the filing of the Mexican civil action
B. Breadth of the Anti-Suit Injunction
The Injunction Order barred Servicios Funerarios from pressing claims against Advent International in the Mexican civil action.101 Now, Advent seeks an
1. Application to the Mexican Criminal Action
In July 2022, Servicios Funerarios initiated a Mexican criminal action called a querella in which it accused Advent International, certain Advent affiliates (including Advent Mexico), and several individuals of committing fraud.102 The individuals named were three current and former Advent employees, a former audit partner of Ernst & Young who performed due diligence on the Gayosso transaction, and former officers of Gayosso. Arrest warrants were issued for everyone except the Gayosso officers, who Servicios Funerarios subsequently pardoned.103 Servicios Funerarios sought asset freezes denied in the Mexican civil action.
Now, Advent asks that I enjoin Servicios Funerarios from pressing the Mexican criminal action against itself, its current and former employees, and its affiliates—including Advent Mexico. Whether a Delaware court can enjoin a foreign criminal proceeding appears to be an issue of first impression. As discussed below, I decline to do so here.
My analysis proceeds in three parts. First, I begin by summarizing the querella system in Mexico. Second, I survey case law from other jurisdictions addressing orders to stop or limit foreign criminal proceedings. Third, I consider the plaintiff‘s request under Delaware law.
a. Relevant Mexican Criminal Procedure
A querella is one method of initiating criminal proceedings under Mexican law.104 In contrast to a state-initiated action, it is commenced by a private actor.105 A querella is the only method of prosecuting criminal fraud in Mexico.106
Although a querella is initiated by the offended party, the next steps are led by state actors. The public prosecutor directs the investigation into the accusations.107 The prosecutor then decides whether the case will be taken before a judge.108 If the prosecutor moves forward, the presiding judge will only issue an arrest warrant if she determines that the prosecutor has presented sufficient evidence to establish probable cause that the act was committed with the accused‘s participation.109
At any point, the victim may choose to pardon the accused.110 Doing so is final—it ends the querella, absolves the accused party, and extinguishes the state‘s
b. Relevant Case Law from Other Jurisdictions
Delaware courts have lacked prior occasion to consider whether they may enjoin a foreign criminal proceeding to enforce a forum selection clause in a commercial contract. The parties thus look instead to decisions from various federal courts.
Advent cites precedent supporting the notion that the enforcement of forum selection (or arbitration) provisions can trump international comity concerns.114 It relies principally on Rintin Corp., S.A. v. Domar, Ltd., 374 F. Supp. 2d 1165, 1168 (S.D. Fla. 2005), where the United States District Court for the Southern District of Florida confirmed an arbitral award that required a party to “terminate its foreign civil and criminal lawsuits” in multiple international jurisdictions.115 In affirming the award, the United States Court of
Advent relies on Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11, 20 (1st Cir. 2004) for a similar point.118 There, the district court ordered an auditor to produce certain auditing records in ruling on a motion to compel. The auditor was a defendant in a securities fraud action and the target of a related criminal investigation in Belgium.119 The auditor obtained a writ from a Belgian court regarding the records after it was compelled to produce discovery in the fraud action. The United States District Court for the District of Massachusetts then entered an anti-suit injunction preventing the auditor from pursuing, and ordered it to withdraw, its writ in Belgium.120 The United States Court of Appeals for the First Circuit
Advent also cites Collins as Next Friend of J.Y.C.C. v. Doe Run Resources Corp., 65 F.4th 370 (8th Cir. 2023), which is even further afield from this matter.123 In Collins, the United States District Court for the Eastern District of Missouri entered a protective order prohibiting the defendants’ Peruvian counsel from having ex parte communications with represented parties during witness interviews in a parallel Peruvian criminal investigation.124 The district court‘s order was based on concerns “about whether the defendants were circumventing [its] discovery rulings—a matter relating to the conduct of litigation before the court.”125 The court did not mention comity in its decision. The Peruvian investigation continued, and the defendants remained able
Servicios Funerarios, for its part, relies on authority addressing limits on United States courts’ ability to enjoin, limit, or affect a foreign government‘s prosecution of its own criminal laws. It cites several cases in which courts declined to enjoin a party‘s participation in a foreign criminal proceeding due to international comity concerns.128 It chiefly relies on Universal Entertainment Corp. v. Aruze Gaming America, Inc. (“UEC“), 2020 WL 1258428 (D. Nev. Mar. 16, 2020), in which the United States District Court for the District of Nevada denied the defendants’ request to enjoin the plaintiffs from voluntarily cooperating with authorities in a Macanese criminal investigation.129
The facts of UEC are like those here. The defendants in UEC asserted that the investigation was launched in Macau by a private entity and pursued by a public
Despite that, the UEC court declined to enter an anti-suit injunction of the Macanese investigation. It held that the role of the Macanese authorities in directing the investigation and deciding which charges to bring distinguished it from a civil proceeding.132 Since “the determination of how a country‘s criminal laws should be investigated and enforced represents one of the most important characteristics of sovereign authority, th[e] Court w[ould] not intervene in an essentially criminal proceeding of another country.”133 It observed that to do so “would have an intolerable impact on the criminal proceeding and thus international comity.”134
c. Delaware Law
Armed with an understanding of the Mexican querella system and federal precedent, I turn to consider whether the injunction Advent seeks should be entered under Delaware law. To obtain a permanent injunction of the Mexican criminal action, Advent must show (1) “actual success on the merits,” (2) that “irreparable harm will be suffered” absent injunctive relief, and (3) that any harm resulting from denial of the injunction “outweighs the harm that would befall” the non-movant if an injunction were entered.135 The third factor is wanting.
Advent International and its affiliates face harm absent an injunction. Assuming they could prove actual success on the merits for the reasons considered above and in the June Opinion,136 the bargained-for protections of the Guarantee are frustrated by the Mexican criminal action. An injunction would give the parties the value of their bargained-for rights. I enjoined Servicios Funerarios from pursuing the Mexican civil action against Advent International for this reason.137 Although I
At the same time, Servicios Funerarios risks harm if I were to grant the injunction. In substantial contrast to the injunction of the Mexican civil action, an injunction of the Mexican criminal action would effectively extinguish Servicios Funerarios‘s appeal rights.138
More critically, dropping the querella would require Servicios Funerarios to affirmatively pardon Advent International and its affiliates.139 That is, Servicios Funerarios would not only be compelled to cease the proceeding but also to exonerate these parties. Bringing to bear more than 30 years of Mexican criminal law experience, Servicios Funerarios‘s expert cites precedent from the Supreme Court of Justice of the Nation (Mexico‘s Supreme Court) in explaining that a pardon “constitutes a manifestation of will between the parties that intervene in it . . . an act independent of what must be carried out and expressed before said authority, who,
Perhaps most critically, I cannot ignore that principles of international comity favor denial of the injunction.141 The unusual and extreme relief Advent seeks would interfere with the Mexican government‘s prosecution of its own laws. As the matter stands, a Mexican prosecutor and judge found probable cause to issue arrest warrants.142 “Whether those allegations [we]re credible enough . . . is a decision to be made by the foreign government.”143
On balance, I decline to enter the injunction sought.144 To demand that Servicios Funerarios grant pardons and end criminal proceedings under the direction of foreign state actors would exceed the reach of any anti-suit injunction issued by a Delaware court. The Mexican courts and prosecutor are in control of the matter. As in UEC, I hesitate “to intrude upon this sovereign discretion.”145
2. Extension of the Anti-Suit Injunction to Advent Mexico
Finally, Advent seeks to enjoin Servicios Funerarios from prosecuting the Mexican civil action against Advent Mexico. Although the June Opinion and Injunction Order made no mention of Advent Mexico, Advent insisted that the relief
Now, Advent correctly argues that the reasoning in the June Opinion applies to Advent Mexico and supports a related injunction. Again, Advent International and Advent Mexico are “Non-Parties” that Servicios Funerarios covenanted in the Guarantee not to sue.148 Thus, Section 10 of the Guarantee‘s bar against suing Advent International in a non-Delaware forum logically extends to Advent Mexico.149
Still, I decline to enjoin Servicios Funerarios from pressing the Mexican civil action against Advent International for two reasons. First, although extending the
A laches-based defense requires a showing of: (1) knowledge by the claimant; (2) unreasonable delay in bringing the claim; and (3) resulting prejudice to the defendant.153 All three elements are present here.
Second, Advent Mexico‘s delay in seeking injunctive relief was unreasonable. Advent Mexico answered the complaint in the Mexican civil action more than two years ago, shortly after it was served.157 Yet it waited until recently to seek an anti-suit injunction from this court. This is in significant contrast to Advent International, which sought an expedited anti-suit injunction immediately upon being served with
Third, Servicios Funerarios was prejudiced by Advent Mexico‘s failure to timely pursue injunctive relief. For two years, it has litigated claims against Advent Mexico in the Mexican civil action.161 Given Advent Mexico‘s answer to the complaint in that suit, Servicios Funerarios had reason to believe that its claims against Advent Mexico would not proceed apace. Servicios Funerarios also devoted resources to litigating Advent‘s claim in this court for an anti-suit injunction protecting Advent International. It is now being caused to revisit these arguments as to Advent Mexico—though both parties initially agreed that Advent Mexico was not a party to this suit.162
III. CONCLUSION
For the reasons outlined above, summary judgment is granted in Advent‘s favor in part. Servicios Funerarios breached Section 9 the Guarantee by filing the Mexican civil action against Advent International and Advent Mexico, which caused the Guarantee to terminate.
I decline to issue an anti-suit injunction of the Mexican criminal action. I also decline to enjoin Servicios Funerarios from prosecuting the Mexican civil action against Advent Mexico.
If there are remaining matters to be resolved, the parties are to inform the court by joint letter within 14 days. Otherwise, the parties are to submit a proposed order to implement this decision or competing proposed orders with a joint letter outlining the differences and a redline comparing the two proposed orders.
could have, but failed to, raise them in its summary judgment briefing. Pls.’ Opp’n to Def.’s Mot. for Leave to Supplement the Record (Dkt. 104) ¶¶ 15-16. I agree; these arguments are waived. See Emerald P’rs v. Berlin, 726 A.2d 1215, 1224 (Del. 1999) (“Issues not briefed are deemed waived.”). Regarding Servicios Funerarios’s second argument, Advent contends that the issues were already addressed by both parties in their summary judgment briefs. Id. ¶ 17. I agree with Advent on this point as well. Servicios Funerarios did not request, and was not granted, an opportunity to submit further summary judgment briefing. The motion to supplement is denied.- The liability of the Sellers to indemnify the Purchaser or, when appropriate, the Acquirer of the Real Estate Assets, in terms of this Section will continue for a period from the Closing Date and until the date that is 36 (thirty-six) months after the Closing Date, except for (i) any lack of veracity in the Fundamental Representations that will survive indefinitely and (ii) Fiscal and Labor Matters, which will survive until the expiration of their respective prescription term in accordance with the Applicable Law.
- The obligations, agreements and commitments contained in this Contract will continue in force after the Closing Date, without limitation.