BAE Systems Information and Electronic Systems Integration v. Lockheed Martin Corporation
Delaware Court of Chancery
C.A. No. 3099-VCN (2009)
- Written by Rich Walter, JD
Facts
A 1996 memorandum of agreement (MOA) existed between the Lockheed Martin STS-Orlando (LMSTS) and Sanders divisions of Lockheed Martin Corporation (Lockheed) (defendant). The MOA defined in which ways the two units would cooperate, in which ways they would compete against each other for new subcontracting business with Lockheed Martin Aerospace (LM Aero), and in which ways teams from the two divisions would meet regularly to ensure the MOA’s proper execution. Over a four-year period, the MOA arrangements worked well for both LMSTS and Sanders. In 2000, Lockheed sold Sanders to a major competitor, BAE Systems Information and Electronic Systems Integration, Inc. (BAE) (plaintiff) for $1.67 billion. The parties agreed to a new MOA that substantively replicated the 1996 MOA. LMSTS and the new BAE/Sanders unit worked well under the 2000 MOA until 2005, when BAE accused LMSTS of stealing new LM Aero subcontracts that rightfully belonged to BAE/Sanders. BAE sued Lockheed in the Delaware Court of Chancery for specific enforcement of the MOA, alleging breach of contract. Lockheed moved for dismissal.
Rule of Law
Issue
Holding and Reasoning (Noble, J.)
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