Delaware courts have increasingly been faced with disputes over post-closing earnouts where the sellers argue that the buyers did not do enough to maximize the sellers’ potential earnout. A recent Delaware Superior Court decision emphasizes the importance of the language in the parties’ contract in assessing the buyers’ efforts with respect to the earnout.

Beyond Risk Topco Holdings v. Chandler, 2024 WL 4369239 (Del. Super. Sept. 24, 2024) was a post-acquisition dispute involving allegations by the sellers of a business that the purchasers took actions with the “sole intent” of avoiding or reducing earnout payments—which was expressly prohibited by the parties’ purchase agreement. The case was transferred from the Delaware Court of Chancery to the Delaware Superior Court’s Complex Commercial Litigation Division, where Judge Eric Davis denied the purchasers’ motion to dismiss the sellers’ contract claim but dismissed the sellers’ implied covenant of good faith and fair dealing claim.