TransDigm Inc. v. Alcoa Global Fasteners, Inc.
Delaware Court of Chancery
2013 Del. Ch. LEXIS 137 (2013)
- Written by Sharon Feldman, JD
Facts
TransDigm Inc. was the parent company of McKechnie Aerospace Investments Inc. (McKechnie) and McKechnie Aerospace (Europe) Ltd. (McKechnie UK) (defendants). McKechnie was the sole shareholder of Valley-Todeco Inc. McKechnie UK was the sole shareholder of Linread Ltd. Linread and Valley-Todeco designed, manufactured, and distributed fasteners. Alcoa Global Fasteners Inc. (plaintiff) purchased the stock of Linread and Valley-Todeco. Airbus was one of Linread’s most important customers. Prior to the execution of the stock-purchase agreement, Linread had agreed to give Airbus a future price discount, and Airbus had told McKechnie UK and Linread that Airbus was considering moving half of its lockbolt business to a competitor. During the due-diligence process, TransDigm represented to Alcoa that it had no disputes with any customers, including Airbus, and, when asked whether any agreements with customers included price negotiations, did not reveal that Linread had agreed to give Airbus a price discount. The stock-purchase agreement included a provision in which Alcoa agreed to accept the shares without reliance on any express or implied representations or warranties of any nature, whether in writing, orally or otherwise, made by TransDigm or its affiliates, except as expressly set forth in the agreement. Alcoa brought a claim against TransDigm, McKechnie, and McKechnie UK for fraudulent and active concealment of material information. TransDigm moved to dismiss, arguing that Alcoa’s claim was barred by its express disclaimer of reliance on any representations outside the agreement.
Rule of Law
Issue
Holding and Reasoning (Parsons, J.)
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