Contract dispute on earnouts results in a victory for MarketAxess
(New York, NY, July 28, 2025) Carter Ledyard & Milburn LLP client MarketAxess Holdings, Inc. prevailed in a trial in Delaware Chancery Court in a dispute originating from MarketAxess’ 2021 acquisition of a business unit from Hartfield, Titus & Donnelly, LLC. The purchase price included an upfront cash payment and an earnout in which HTD could receive additional payments if HTD reached certain targets after the closing. The agreement allowed HTD to pay cash to increase the earnout if HTD reached a specified threshold of business. An amendment executed at closing shortened the first earnout period by a few days and prorated the earnout targets but not the cash top up threshold. After HTD fell short of the cash top up threshold for the first earnout period, HTD alleged that the parties had agreed to prorate the cash top up threshold and that there had been a mistake or drafting error in the amendment. HTD sued seeking reformation of the contract to prorate the cash top up threshold.
The Carter Ledyard litigation team represented MarketAxess in a four-day trial in the Delaware Chancery Court. After post-trial briefing, the court issued its decision in MarketAxess’ favor and awarding MarketAxess its reasonable fees, costs, and expenses, including reasonable attorney’s fees.
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