Overview- Earnout provisions give sellers of a company rights to additional consideration if the acquired business achieves certain financial goals or specified milestones.
The Delaware Supreme Court affirmed a decision by the Delaware Court of Chancery awarding $45 million for a milestone payment even though the buyer had stopped efforts to develop and commercialize the drug.
Delaware's chief justice challenged an attorney for Shire U.S. Holdings Inc. on Wednesday on the company's claims that a Chancery Court decision to enforce a $45 million "milestone" payment against it after it halted a merger partner's cancer drug prospect would create an unfair "windfall."