In Shareholder Representative Services LLC v. Sphera Solutions, Inc. (Mar. 31, 2026), a Magistrate for the Court of Chancery, in a letter decision, at the pleading stage of the litigation, declined to dismiss the plaintiff’s fraud claims that were based on oral statements that Sphera Solutions, Inc. allegedly made during the negotiations leading up to its acquisition of SupplyShift, Inc. Sphera allegedly told SupplyShift that, post-closing, it would focus on and provide resources for cross-selling SupplyShift’s products to Sphera’s customers. The plaintiff claimed that SupplyShift had relied on those statements in deciding to sell to Sphera and agreeing to a significant earnout; that, after closing, Sphera did not fulfill those “oral promises” and thus the earnout threshold was not met; and that, at the time the promises were made, Sphera had already finalized a post-closing budget (the “Budget”) that reflected that it had had no intention of fulfilling the promises. Critically, the Merger Agreement did not contain an anti-reliance provision.

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