Nothing is ordinary about the COVID-19 pandemic, but according to a ruling on Friday from Vice Chancellor Kathaleen McCormick of Delaware Chancery Court, the cake decorating company DecoPac Inc didn’t divert from the ordinary course of business in responding to COVID’s extraordinary economic disruption.
The Delaware judge’s decision in Snow Phipps Group LLC v. KCake Acquisition Inc should be a relief to target companies attempting in good faith to respond to a crisis without giving remorseful buyers an excuse to walk away.
McCormick, who is slated to be sworn in as chancellor later this week, held that the private equity firm Kohlberg & Co was not entitled to abandon a $550 million deal to purchase DecoPac from another private equity firm, Snow Phipps.
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