In a ruling, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery upheld Galaxy Digital’s “clean termination right” in the acquisition of BitGo, as announced in 2022.
The Delaware Court of Chancery has granted a motion from Galaxy Digital, a crypto investment firm, largely dismissing the case brought by digital asset custodian BitGo. The lawsuit stemmed from a dropped acquisition of BitGo by Galaxy Digital in 2022.
Vice Chancellor J. Travis Laster of the Delaware Court of Chancery dismissed BitGo’s complaint against Galaxy Digital with prejudice, according to court documents filed on June 9. The dismissal came after Galaxy Digital dropped its decision to acquire BitGo in August 2022, citing a breach of contract. BitGo responded by filing a lawsuit against Galaxy, seeking $100 million in damages.
Vice Chancellor J. Travis Laster ruled that Galaxy Digital had a “clean termination right” for the BitGo acquisition, citing BitGo’s failure to provide certain financial statements in its U.S. public listing process. A spokesperson for Galaxy expressed satisfaction with the court’s decision to dismiss BitGo’s claims.
Vice Chancellor J. Travis Laster stated that there were no alleged facts that could reasonably suggest that the termination right exercised by Galaxy was inconsistent with the implied covenant of good faith and fair dealing.
We’re pleased with the court’s decision to dismiss BitGo’s claims. Now is the time for all of us to work together and focus on the task at hand: Upgrading the global financial system in a manner that promotes innovation and protects investors and consumers alike. pic.twitter.com/xPrMP8AghW
— Galaxy (@galaxyhq) June 12, 2023
Galaxy Digital, led by Mike Novogratz, had announced plans to acquire BitGo in May 2021 as part of its U.S. public offering. However, in 2022, the deal with BitGo fell through, and Galaxy Digital disclosed that it had a $77 million exposure to the failed crypto exchange FTX, which declared bankruptcy in November.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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