Earnout Dispute Dismissed in Part in Delaware’s CCLD

Long after a business is sold, the parties may find themselves litigating any number of aspects of the deal. In recent years, post-closing disputes involving “earnout” provisions have become increasingly common in Delaware. Under a typical earnout arrangement, the seller of the business receives a portion of the purchase price up front, and it receives the remaining portion (the earnout payment) only if the business meets some financial or performance metric by a specified time after the sale.