Explore the legal battle in Perrigo Company v. International Vitamin Corporation, highlighting the importance of clear contract language in M&A transactions. Learn how a complex asset purchase agreement led to a $1.2 million reimbursement dispute and the lessons for avoiding costly legal conflicts.
M&A Stories
September 15, 2018
In a recent legal battle, a leading over-the-counter pharmaceutical products manufacturer in Allegan, Michigan, faced off with a subsidiary of a Dutch multinational company in Freehold, New Jersey, specializing in vitamins and dietary supplements. The conflict arose from an asset purchase agreement involving the sale of the pharmaceutical company’s business.
Post the August 5, 2016, sale, the buyer terminated several employees from the acquired business, leading the seller to make severance payments per the agreement. The seller sought reimbursement from the buyer, amounting to approximately $1.2 million. However, the buyer, citing the dense and unclear 1,484-word language in the agreement, contested any obligation to reimburse.
The U.S. District Court in Delaware ultimately sided with the seller, emphasizing the complexity and opacity of the agreement’s language.
In essence, the case of Perrigo Company v. International Vitamin Corporation underscores the significance of clear contract language, particularly in intricate matters. Simplifying language in agreements can potentially prevent disputes from escalating to costly legal battles.
Case Reference:
Perrigo Company v. International Vitamin Corporation, No. 1:17-CV-1778.[1], United States District Court, D. Delaware (September 7, 2018)
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