Finger Lakes Capital Partners, LLC, Plaintiff and Counterclaim Defendant Below, Appellant v. Honeoye Lake…

Summary

The Supreme Court of Delaware largely affirmed the Court of Chancery’s allocation of proceeds from a successful portfolio investment under the parties’ interrelated agreements. It held that the portfolio company’s operating agreement did not supersede the overarching term sheet or clawback agreement, and that the Chancery Court correctly applied those agreements and limited indemnification. The court reversed the allowance of time-barred management-fee claims as a setoff or recoupment because setoff was barred by statute and the fees lacked the required transactional relationship to the distribution claim.