The BitGo case against Galaxy Digital may now proceed after the Delaware Supreme Court overturned a previous verdict.
In regards to their canceled $1.2 billion merger deal, BitGo reportedly gets a fresh chance to sue Galaxy Digital, according CoinDesk.
Earlier, a lower court had rejected BitGo’s $100 million case against Galaxy Digital, but the Delaware Supreme Court reversed that judgment.
The need for extrinsic evidence to settle the disagreement and the vagueness of the merger agreement’s wording were both highlighted by the Supreme Court’s May 22 ruling. The Delaware Court of Chancery had previously approved Galaxy Digital’s “clean termination right” in June 2023 because BitGo was late in delivering audited financial accounts for 2021, but this new verdict overturns that decision.
“We think justice triumphs on appeal, and we are thrilled to continue ahead with this matter in the Chancery Court,” said R. Brian Timmons of Quinn Emanuel, the legal firm that represented BitGo.
The BitGo lawsuit first surfaced in August 2022, with the accusation that Galaxy Digital had committed an “intentional violation” against the purchase agreement. In its lawsuit, BitGo demanded $100 million in damages, claiming that Galaxy’s decision to pull out of the transaction was not due to BitGo’s negligence but rather to financial problems caused by the crypto bear market. On the other hand, Galaxy insists that BitGo’s tardiness in delivering the required audited financial accounts was the only justification for its choice to terminate the merger.
As of August 2022, the merger that Galaxy CEO Mike Novogratz had announced in May 2021 was no longer going forward. Financial statement interpretation is at the heart of the disagreement.
At first, Vice Chancellor J. Travis Laster of the Delaware Chancery Court sided with Galaxy, pointing out that BitGo had submitted financial papers that did not comply. But the current decision by the Supreme Court found that financial statements are defined too vaguely, calling for more research and bringing the BitGo case back into the spotlight.