Arthur J. Gallagher Ordered to Pay $50 Million Post-Deal Earnout

Arthur J. Gallagher & Co. lost a round in its court fight with the founder of two acquisitions Thursday, when a judge directed the insurer to make a $50 million post-deal payment.

Vice Chancellor Lori W. Will shot down several defenses asserted by Gallagher, saying the company effectively caved by acknowledging it had hit the revenue thresholds triggering the payment. The sale agreement imposed no other conditions, and Delaware’s courts “cannot rewrite contracts,” the judge said in a 32-page ruling for the state’s elite business tribunal.

The dispute echoes a recurring theme in Delaware’s Chancery Court, the leading US forum ...