Did the Supreme Court overrule Parsons and make the LATS a binding document? More analysis and a challenge!
No. the LATS, is still not a binding document. However, SIGA and PIP were found by the Supremes to have an obligation to negotiate toward a license agreement with economic terms substantially similar to the TERMS of the LATS:
"the record supports the Vice Chancellor’s factual conclusion that “incorporation of the LATS into the Bridge Loan and Merger Agreements reflects an intent on the part of both parties to negotiate toward a license agreement with economic terms substantially similar to the terms of the LATS if the merger was not consummated.”
So what impact does that have?: It means that a fully integrated, enforceable contract governs the promise at issue and and the Vice Chancellor must look to the contract as the source of a remedy on the breach of an obligation to negotiate in good faith.
Because expectation damages are awardable and Parsons found the contract would have closed if not for SIGA's "bad faith", Parsons needs to fashion his remedy based on the actual contract, not based on a made up contract. And this is where he runs into the speculative damages problem of the lump sum expectation damages in this case he so eloquently discussed in his original opinion.
The idea behind expectation damages is to put the non-breaching party in the position he would have been in had the contract been fulfilled. However, from any angle I look at this thing I am unable to get around the requirement that those damages must be calculated with reasonable certainty. And if the Chancery court was unable to come up with a measure of damages at the time of breach, how could the parties have known what the damages were at the time of breach? Again, I see this decision as very very bad for PIP.
I challenge anyone to explain what the damages should be in this case and why they are not speculative. I am unable to do so and I've become pretty versed in this area of law over the past year.
This is just restating the same circularity everyone else has been pointing out:
It's impossible to non-speculatively assign expectation damages (and Parsons specifically said so).....yet...Parsons is now required to non-speculatively assign expectation damages.
The supremes obviously read the statement by Parsons on this issue. They know this is why Parsons resorted to that oddball promissory estoppel maneuver. So they're surely aware of this paradox. What's THEIR intention here? I have no idea.
And what is Parsons to do, simply let SIGA off the hook? DE takes bad faith seriously (this wasn't bad faith, but it is for purposes of law at this point, so let's proceed from there). There must and will be punishment.
You say "I see this decision as very very bad for PIP." But I don't see support for that in anything you're saying.
Parsons has got to find damages, and it's not going to be non-speculative (because there's no way out of the paradox). So if he must go speculative, the LATS is the only possible direction he can go without taking another chance with another randomly "creative" route. So the terms of the LATS, as non-binding as he admitted they should be at this point, is his only solid ground here. And if he goes to LATS, we're in trouble.
Unless I'm misunderstanding. In which case, please educate me. I'd love to feel as happy as many of you seem to.
Oh, and this has pretty much been Golongin2008's point and he has been spot on in his analysis. Golongin2008, I don't want to put words in your mouth, feel free to correct me if you have a different take.