Exit Strategy, LLC v. Festival Retail Fund BH, L.P.

Summary

The Supreme Court of Delaware affirmed the Court of Chancery’s judgment for Festival, holding that the partnership agreement unambiguously permitted deduction of the property-loan defeasance costs from the gross sale price. The Court held that the agreement’s formula applied the proration language only to the specified threshold amount, not to the defeasance costs or rental payments, and that the resulting net resale price was below the distribution threshold. The Court did not reach the alternative issue whether the General Partner’s good faith independently barred Exit’s breach-of-contract claims.