Background
FBSciences Holdings and Valent BioSciences agreed to merge on January 25, 2023, with closing in March 2023. Plaintiffs Caldwell D. Lowrance, Jr. and KCL-JLC, L.P. owned Series A preferred and common shares of FBSciences and were entitled to cash merger consideration under the Merger Agreement. Section 3.5(c) of the Merger Agreement explicitly provided that “[n]o interest shall accumulate on any cash payable in connection with the Merger.”
After closing, Wilmington Trust (the paying agent) sent plaintiffs a letter of transmittal containing release provisions that waived appraisal and dissenter’s rights and prohibited signatories from challenging the merger or alleging breach of fiduciary duty by FBSciences directors. The letter also stated that signatories would be bound by the Merger Agreement’s terms. In May 2024—over a year later—plaintiffs attempted to reject these release provisions. Valent ultimately agreed in April 2025 to pay the merger consideration without requiring execution of the letter, and paid $2,078,923.81 in June 2025.
Plaintiffs filed suit seeking a declaratory judgment that the release provisions were invalid and unenforceable, and sought an award of interest on the delayed merger consideration. Defendants moved for summary judgment; plaintiffs moved for judgment on the pleadings.
The Court’s Holding
Vice Chancellor David denied all relief to plaintiffs. On the interest claim, the court ruled that plaintiffs waived their request by failing to brief it in their opening brief—raising it only in a proposed order—despite Delaware law treating prejudgment interest as not self-executing. Even if not waived, the court held, plaintiffs could not overcome Section 3.5(c)’s explicit contractual prohibition on interest accumulation. Plaintiffs provided no legal basis for ignoring this provision, and their own year-long delay in rejecting the release provisions defeated any equitable argument for interest.
On the declaratory judgment claim challenging the validity of the release provisions, the court dismissed the case as unripe for lack of subject matter jurisdiction. The court reasoned that allowing the suit would amount to issuing an improperly advisory opinion. Citing Nask4Innovation, the court found no actual dispute requiring resolution because Valent had voluntarily agreed not to enforce the release provisions—there was no live controversy and defendants had not raised the releases as a defense to any claim. Thus, adjudicating plaintiffs’ challenge would serve no practical purpose.
The court also dismissed plaintiffs’ challenge to the Letter of Transmittal for lack of standing. Because plaintiffs never signed the letter and are not parties to it, they cannot challenge its provisions. Plaintiffs received the full merger consideration without signing and suffered no concrete harm from the letter’s terms.
Key Takeaways
- Issues not briefed in opening briefs are deemed waived; raising arguments only in proposed orders or reply briefs does not preserve them
- Explicit contractual provisions prohibiting interest on merger consideration are enforceable and override equitable arguments based on delayed payment
- Claims challenging release provisions are not ripe when defendants have voluntarily agreed not to enforce them; courts will not issue advisory opinions on moot controversies
- Shareholders lack standing to challenge provisions in documents they did not sign and are not parties to
- Unreasonable delay in asserting rights undermines equitable relief arguments
Why It Matters
This decision clarifies important Delaware procedural principles affecting post-merger disputes. Courts will decline to adjudicate release provisions that are no longer being enforced, preventing plaintiffs from obtaining advisory rulings on hypothetical disputes. The ruling reinforces that shareholders cannot obtain relief for alleged improper conditions on merger consideration if those conditions are ultimately not imposed—the voluntary payment by defendants mooted the entire controversy. The decision also establishes a strict ripeness requirement, preventing shareholders from using litigation to obtain declarations about release provisions without facing actual enforcement.
The case underscores the importance of timely assertion of rights and proper briefing at each procedural stage. Plaintiffs’ year-long delay in objecting to the release provisions—and their failure to brief the interest issue until their proposed order—proved fatal to their case. Trial courts will not rescue parties from procedural defaults or curative measures defendants voluntarily adopt without court intervention.