Delaware’s Supreme Court has overturned a lower court’s decision to dismiss a $100 million lawsuit brought by BitGo against Galaxy Digital after a failed acquisition. The Supreme Court determined that the language in the merger agreement between BitGo and Galaxy Digital was “ambiguous,” and therefore, it would allow for the consideration of additional evidence to clarify the ambiguity. This successful appeal gives BitGo another opportunity to pursue legal action against Galaxy Digital.
In August 2022, BitGo filed a lawsuit against Galaxy Digital, accusing the company of intentionally breaching the acquisition agreement. Galaxy Digital justified its decision to terminate the deal by claiming that BitGo failed to provide audited financial statements from 2021. With the Supreme Court’s decision, BitGo’s case will now proceed in the Chancery Court.
R. Brian Timmons, a partner at Quinn Emanuel, the law firm representing BitGo, expressed satisfaction with the appellate court’s ruling, stating that they believe justice has been served. Galaxy Digital, on the other hand, has vowed to vigorously defend itself and remains confident in the strength of its case.
Galaxy Digital, led by Mike Novogratz, initially announced its intention to acquire BitGo in May 2021 as part of its public offering in the United States. However, following the collapse of cryptocurrency exchange FTX in November 2022, Galaxy Digital disclosed an exposure of approximately $77 million to the firm before FTX filed for bankruptcy.
Update (May 24 at 10:12 pm UTC): This article has been updated to include a statement from Galaxy Digital.