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• A Delaware court dismissed BitGo’s lawsuit against Galaxy Digital on June 12 for prematurely backing out of its offer to acquire the former for $1.2 billion.
• BitGo had argued that the agreement was terminated before it was intended to end and is owed damages under the termination fee clause.
• However, the court determined that Galaxy was justified in backing out of the deal because BitGo had failed to deliver audited financial statements in time as part of the due diligence process.
Court Dismisses BitGo’s Lawsuit Against Galaxy Digital
A Delaware court has dismissed a lawsuit filed by crypto-custody provider BitGo against Galaxy Digital Holdings Ltd., ruling that the crypto asset management firm was justified in backing out of an acquisition deal due to delays in providing financial statements.
Back in February 2021, Galaxy Digital had announced its intention to acquire complete control of BitGo for $1.2 billion which included a cash payment and shares of stock. However, later that month, Galaxy Digital terminated the agreement citing “delays” from both parties in completing due diligence requirements including audited financial statements from BitGo. In response, BitGo filed a lawsuit alleging that their agreement with Galaxy Digital had been terminated prematurely and demanding damages under a termination fee clause specified in their agreement.
The Delware court examined both sides‘ arguments and ruled that it was reasonable for Galaxy Digital to back out of its agreement with Bitgo due to delays caused by them in providing audited financial statements as part of their due diligence process. Therefore, according to the ruling, Galaxy is not liable to pay damages under their contract’s termination fee clause.
Galaxy Digital responded positively after hearing news about dismissal of this case by tweeting “we can now go back to focusing on upgrading global finance system“. This tweet implies company’s commitment towards creating more innovative solutions while protecting investors and consumers at large scale.
This verdict highlights how companies need certain level preparation before entering into any major corporate acquisitions deals even when they are well funded and have clear objectives set for them ahead of time . It also sets a precedent whereby legal disputes related cryptocurrency industry can be resolved quickly without causing major disruptions or losses for either side involved .