BitGo’s $100M suit against Galaxy can proceed — Delaware Supreme Court

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Delaware’s Supreme Court has reversed a ruling from a lower court that dismissed a $100 million lawsuit brought by BitGo against Galaxy Digital following a failed acquisition.

In a May 22 filing, the Supreme Court of the State of Delaware said language in the BitGo-Galaxy Digital $1.2 billion merger agreement — which the latter terminated in August 2022 — was “ambiguous.” The state supreme court concluded that it would reverse the Delaware Chancery Court’s decision “for the consideration of such extrinsic evidence as may be appropriate to resolve this ambiguity.”

May 22 Delaware Supreme Court decision: Source

The successful appeal, first submitted on Feb. 7, would seemingly allow BitGo another bite at the apple to file suit against Galaxy Digital. In an August 2022 lawsuit, the firm alleged Galaxy committed an “intentional breach” of the acquisition agreement. Galaxy claimed at the time that it was within its rights to drop the deal after BitGo failed to deliver audited financial statements from 2021.

“We believe justice prevailed on appeal and we are delighted to move forward with this case in the Chancery Court,” R. Brian Timmons, a partner at law firm Quinn Emanuel, which is representing BitGo, told Cointelegraph on the news of the court decision.

Related: BitGo raises $100M after losing lawsuit against Galaxy

The Delaware Court of Chancery dismissed BitGo’s case with prejudice in June 2023. Vice Chancellor J. Travis Laster said Galaxy had a “clean termination right” to the BitGo acquisition at the time. A Galaxy spokesperson told Cointelegraph in response to the May 22 decision that the firm would “continue to vigorously defend ourselves” and was “confident in the merits of our case.”

Operated by Mike Novogratz, Galaxy announced its intention to acquire BitGo in May 2021 as part of its public offering in the United States. In November 2022, amid the collapse of cryptocurrency exchange FTX, Galaxy disclosed roughly $77 million in exposure to the firm before FTX filed for bankruptcy.

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Update (May 24 at 10:12 pm UTC): This article has been updated to include a statement from Galaxy Digital.