Cooper Tire & Rubber Co. was requesting $112.5 million as part of its "divorce settlement" with Apollo Tyres Ltd. A Delaware court ruled against Cooper.
The judgement of the Delaware Chancery Court said Cooper failed to meet the terms of the original "merger agreement" between the companies. (In a contract signed by both parties on June 12, 2013, Apollo agreed to purchase Cooper's stock.)
Cooper pulled out of the deal last December, alleging Apollo had breeched it. Cooper then sued Apollo for $112.5 million, claiming it was owed that amount under the contract's buyout agreement.
In a prepared statement, Apollo had this to say about the court's ruling:
"We are pleased by the decision of Delaware Vice Chancellor (Sam) Glasscock. This ruling vindicates our consistent stand that even as Apollo Tyres made exhaustive efforts to complete the deal, Cooper failed to comply with its contractual obligations because it was unable to control its largest subsidiary.
"This led it to hastily litigate and ultimately led to the failure of a transaction that would have benefitted Apollo and Cooper’s shareholders.”
According to Bloomberg reporter Phil Milford, "Cooper 'failed to comply' with wording to ensure its subsidiaries operate 'in the ordinary course of business,' and that failure 'is sufficient' to justify rejection of the breakup fee, Glasscock wrote."
