Main Street Baseball, LLC v. Binghamton Mets Baseball Club, Inc.

Main Street Baseball, LLC (plaintiff) negotiated with Binghamton Mets Baseball Club, Inc. (defendant) for almost five months to buy a minor-league baseball team. The parties then signed a “mutual and fully binding” letter of intent (LOI) “to pursue the proposed acquisition of the [team].” The LOI: (1) set many deal terms, including the sale price, a payment schedule, and the existence of indemnification; (2) stated that it was “a legally binding commitment” “to execute and deliver the Asset Purchase Agreement” (APA) that would actually transfer ownership of the team; and (3) set a 60-day period during which Binghamton would not entertain any other offers and the parties would “use their reasonable best efforts to negotiate, execute and deliver . . . a mutually agreeable [APA].” After the LOI was executed, Main Street made a security deposit of $100,000. During the APA negotiations, Binghamton proposed defining limits for the indemnification term, and Main Street suggested adding new terms (about matters like guaranteeing no loss for the first season, arbitration, and accounts-receivable collections). The 60-day period expired without the parties executing an APA. Binghamton then accepted an offer from a different buyer. Main Street sued, claiming that the LOI was a binding contract and Binghamton had breached it. Main Street moved for a preliminary injunction to prevent Binghamton from selling the team during the lawsuit.