COURT OF CHANCERY
OF THE
STATE OF DELAWARE
STEPHEN P. LAMB
VICE CHANCELLOR
New Castle County Court House
500 N. King Street, Suite 11400
Wilmington, Delaware 19801
Submitted: May 20, 2009
Decided: June 12, 2009
Samuel A. Nolen, Esquire
Harry Tashjian, Esquire
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, DE 19899
Lewis H. Lazarus, Esquire
Katherine J. Neikirk, Esquire
Morris James LLP
500 Delaware Avenue
P.O. Box 2306
Wilmington, DE 19899
RE: Nationwide Inflection LLC v. Ocwen Financial Corp.
C.A. No. 4282-VCL
Dear Counsel:
On May 20, 2009, the court heard argument on the parties’ cross-motions for
judgment on the pleadings regarding the narrow issue of the plaintiff’s entitlement,
as a matter of contract interpretation, to recover its fees incurred in bringing this
litigation. Generally speaking, these motions call for the construction of section
8.3 (“Indemnification of the Shareholders”) and section 8.9 (“Payment of the
Escrow Fund”) of the merger agreement dated as of June 6, 2007 that governs the
transactions giving rise to the dispute in this matter. The underlying dispute relates
to an assertion of a claim for indemnification made under section 8.3
(“Indemnification of Parent”) against the escrow fund established for that purpose
in the merger agreement.
Nationwide Inflection LLC v.
Ocwen Financial Corp.
C.A. No. 4282-VCL
June 12, 2009
Page 2
At the hearing, as the result of the colloquy between Mr. Carberry and the
court, it became clear that the contract interpretation issues presented are ones that
may never need to be resolved. The plaintiff does not contend that it is entitled to
receive any payment or reimbursement with respect to its fees in this case in
advance of a final judgment. Moreover, and more important, National Inflection
LLC concedes that any right it may ultimately assert to recover fees as a part of a
judgment in its favor will depend on a finding by the court that Ocwen Financial
Corporation has acted in bad faith in asserting its claim for indemnification. This
is true of any right National Inflection might assert under either section 8.3 or
section 8.9 of the merger agreement, as well as any argument it might make based
on general equitable principles of fee shifting.
In the circumstances, it appears unwise and a waste of judicial resources to
engage in the exercise of resolving the remaining issues presented by pending
cross-motions. For that reason, those motions are dismissed without prejudice. IT
IS SO ORDERED.
/s/ Stephen P. Lamb
Vice Chancellor
