Hefty Default Judgment

Challenge:
Our clients, two European-based energy companies, were in conflict with energy investors over a nearly $13 million investment in coal mining investment companies. The clients grew concerned over how their money was being invested and demanded to inspect the investor’s books and records. They subsequently sued the investors in Delaware state court, claiming that they had neglected to pay almost $1 Million as part of an agreement that was previously executed. Our clients filed two more actions for books and records and a fourth action claiming fraud, conversion and breach of fiduciary duty and seeking $12 million in damages.

Approach:
Young Conaway’s Corporate and Commercial Litigation attorneys worked as Delaware Counsel, alongside lawyers from one of the 10 largest law firms in the U.S. The team handled the matter over a two-year period.

Outcome:
The parties eventually agreed to settle the suits for $10 million, with our client then suing to enforce the settlement after it failed to receive the first $500,000 payment. According to the high court opinion, among the investors misdeeds was the fact that they had failed to pay about $400,000 in attorneys' fees to our clients that the trial court initially ordered before issuing the default judgment.

The high court affirmed the Delaware Chancery Court's decision to impose a hefty default judgment after the energy investors “willfully flouted” obligations to the court, including motions to compel. The Delaware Supreme Court affirmed a $10 million default judgment for our client which had enforced a settlement deal that ended the companies' fraud litigation against the two energy investors.

(Prior results do not guarantee a similar outcome)