IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
UNIVERSAL COMPRESSION, INC., ))
Plaintiff, ))
V. > Civil Action No. 17774
)
TIDEWATER, INC., ))
Defendant. )
MEMORANDUM OPINION
Date Submitted: August 4, 1999
Dated Decided: October 19, 2000
Gregory V. Varallo, Esquire, of RICHARDS, LAYTON & FINGER, Wilmingtonj
Delaware; and Martin L. Perschetz, Adam J. Freedman and Nikhil Singhvi, Esquires,
of SCHULTE ROTH & ZABEL LLP, New York, New York; Attorneys for Plaintiff.
Stephen E. Jenkins, Richard D. Heins and Marlaine A. White, Esquires, of ASHBY
& GEDDES, Wilmington, Delaware; and Curtis R. Heam, Esquire, of JONES,
WALKER, WAECHTER, POITEVENT, CARRERE & DENEGRE, LLP, New ,
Orleans, Louisiana; Attorneys for Defendant.
JACOBS, VICE CHANCELLOR
I. INTRODUCTION
At issue in this action is which of two parties to a stock purchase agreement
is ultimately liable to pay a post-agreement $2.76 million Texas corporate
franchise tax assessment: the purchaser -- plaintiff, Universal Compression, Inc.
("Universal"), or the seller -- defendant, Tidewater, Inc. ("Tidewater"). Tidewater
has moved to dismiss the complaint under Court of Chancery Rules 12(b)(6) and
9(b). For the reasons stated below, Tidewater's motion will be granted as to
SNIPPETS:
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
Orleans, Louisiana; Attorneys for Defendant.
At issue in this action is which of two parties to a stock purchase agreement
franchise tax assessment: the purchaser -- plaintiff, Universal Compression, Inc.
, or the seller -- defendant, Tidewater, Inc..
has moved to dismiss the complaint under Court of Chancery Rules 12and
Universal, a Texas corporation whose
located in Wilmington, Delaware would have exclusive jurisdiction over claims to
"Closing Date").
of liability for taxes imposed as a result of the transaction.
A Section 338 election is often advantageous to a buyer,
the buyer is often willing to pay a higher
Notwithstanding the preceding two sentences,
The quoted draft provision was intended as an exception or "carve out"
The pending motion to dismiss is brought under Court of Chancery Rule
Compression for taxable periods after the Closing Date.
Tidewater argues that this last sentence does not create any exception that is
Thus, Universal concludes, because this competing interpretation is equally
to indemnify Universal for taxes that are Tidewater's responsibility under Section
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