Edge Group Waiccs LLC v. Sapir Group LLC

705 F.Supp.2d 304 (2010)

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Nature of the Case

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Facts

Edge Group and Credit Suisse entered into a Call Option Agreement under which Edge Group granted Credit Suisse an option to purchase Edge Group's interest in WAICCS for the price of $ 20 million plus any amounts that Edge Group had contributed to the company in the period from the execution of the Call Option Agreement until the closing of the purchase of the Edge Group's interest pursuant to the option. To exercise the option. Credit Suisse was required to deliver to Edge Group a timely 'Call Exercise Notice.' The Agreement also gave Credit Suisse the right, subject to certain conditions, to assign the option to another party. Following the signing of the original Option Agreement, Credit Suisse undertook a search for a potential interested buyer, and found only one, D. Accordingly, on February 15, 2008 -- the then-current expiration date for the Option Agreement -- Credit Suisse assigned its option to D. At the same time, P, Credit Suisse, and D signed a Letter Amendment to Option Agreement, which extended the expiration date for exercising the option to May 1, 2008. D was to deposit one million dollars in an escrow account simultaneously with the execution of the Amendment. The parties dispute the purpose of requiring deposit of the escrowed funds. P maintains that it required the one-million-dollar deposit as compensation for extending the option exercise period until May 1, 2008. D asserts that the one-million-dollar deposit was to function as liquidated damages in the event of a default. D delivered the required escrow funds to the Escrow Agent. On May 1, 2008, the last day on which the option was in effect, D delivered a Call Exercise Notice to Edge Group and scheduled the closing for May 30, 2008. The effect of that act was to create a binding contract for the sale to D of P's interest in WAICCS. On May 29, 2008, D notified P that it had decided not to go through with the closing. D decided to abandon the transaction because of the speculative nature of the project planned for development on the site. P sued seeking specific performance. D filed an answer, including several affirmative defenses, on September 16, 2008: P's only remedy for the breach is payment of the escrow funds.