Hollywood payroll company Media Services has dropped its Delaware lawsuit against rival Cast & Crew after an apparent settlement of claims that Cast & Crew’s parent, Swedish conglomerate EQT AB, tried to back out of their merger over coronavirus concerns.
The family trusts that own Media Services voluntarily dismissed the suit with prejudice Monday, a week and a half after the sealed complaint was made public April 9. They had previously notified the Chancery Court of an agreement in principle and withdrawn their motion to expedite the case.
No settlement terms were immediately available.
The suit also targeted Cast & Crew parent Camera Holdings LP, a Delaware limited partnership formed the same day EQT announced its acquisition of Cast & Crew in December 2018. It accused Cast & Crew of seeking to avoid closing the deal because “the Covid-19 pandemic has led to a material adverse effect.” But it hasn’t and won’t, the suit said.
The apparent settlement came the same day as an unsealed suit claiming a private equity consortium led by Kohlberg & Co. is trying to renege on a deal to acquire DecoPac Inc., the world’s largest wholesaler of cake decorations.
Three suits filed earlier in April involve
The Decopac, Bed Bath & Beyond, and CorePower cases are also being heard in the Chancery Court. The CMX suit is in Houston federal court.
And a suit by Texas utility Energy Earth LLC against Just Energy (US) Corp.—which is allegedly trying to use the pandemic to unilaterally end a joint venture—is proceeding in Texas state court.
The complaint against Cast & Crew accused it of making a “wide-ranging and apparently insatiable request for information” about how the coronavirus would affect Media Services’ business as a last-minute condition of closing the deal.
But the merger agreement’s “material adverse effect” provision was allegedly limited to changes that have a disproportionate impact on Media Services. It explicitly excluded “changes in general economic, business or regulatory conditions” and “changes due to natural disasters,” the suit said.
That claim echoed arguments being made in the other cases.
Media Services was represented by Morris, Nichols, Arsht & Tunnell LLP and Sheppard, Mullin, Richter & Hampton LLP. Cast & Crew was represented by Richards, Layton & Finger PA and Latham & Watkins LLP.
The case is Oberman Tivoli & Pickert Inc. v. Cast & Crew Indie Servs. LLC, Del. Ch., No. 2020-0257, voluntary dismissal filed 4/20/20.