VT Shareholder Representative, LLC v. Edwards Lifesciences Corporation

      IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

    VT SHAREHOLDER                                    )
    REPRESENTATIVE, LLC, in its capacity              )
    as the Shareholders’ Representative for the       )
    former Participating Holders of Valtech           )
    Cardio Ltd.,                                      )
                                                      ) C.A. No. 2023-0316-MAA
                Plaintiff,                            )
                                                      )
          v.                                          )
                                                      )
    EDWARDS LIFESCIENCES                              )
    CORPORATION and VALTECH                           )
    CARDIO LTD.,                                      )
                                                      )
                Defendants.                           )

                              Submitted: September 28, 2023
                               Decided: December 12, 2023

                              MEMORANDUM OPINION

     Defendants’ Motion to Dismiss Plaintiff’s Verified Complaint - GRANTED.

C. Barr Flinn, Esquire, and Lauren Dunkle Fortunato, Esquire, of YOUNG
CONAWAY STARGATT & TAYLOR, LLP, Wilmington, Delaware, and Jeffrey
B. Korn, Esquire (Argued) and Philip F. DiSanto, Esquire, of WILLKIE FARR &
GALLAGHER LLP, New York, New York, Attorneys for Plaintiff.

Jon E. Abramczyk, Esquire, Ryan D. Stottmann, Esquire, and Alec Hoeschel,
Esquire, of MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington,
Delaware, and Michele D. Johnson, Esquire, of LATHAM & WATKINS LLP,
Costa Mesa, California, and Eric F. Leon, Esquire, (Argued) and Sarah Burack,
Esquire, of LATHAM & WATKINS LLP, New York, New York, Attorneys for
Defendants.

Adams, J.1

1
  Sitting as a Vice Chancellor of the Court of Chancery of the State of Delaware by designation of
the Chief Justice of the Supreme Court of Delaware pursuant to In re Designation of Actions Filed
                              I.     INTRODUCTION

      This is a breach of contract action between Plaintiff VT Shareholder

Representative, LLC (“VT Shareholder” or “Plaintiff”) and Defendants Edwards

Lifesciences Corporation (“Edwards”) and Valtech Cardio Ltd. (“Valtech”)

(collectively “Defendants”). Plaintiff entered into an Agreement and Plan of Merger

(the “Merger Agreement”) wherein Edwards acquired Valtech from the former

Participating Holders of Valtech. The Merger Agreement provided for an Earn-Out

Period of ten years from the closing date of January 23, 2017.

      Plaintiff now seeks a declaratory judgment that Defendants have breached the

Merger Agreement. Plaintiff alleged Defendants failed to use “commercially

reasonable efforts” to achieve four delineated milestones in the Merger Agreement.

Defendants move to dismiss, arguing: (1) the claims are not yet ripe for

consideration; and (2) Plaintiff failed to state a claim for which relief can be granted.

For the reasons that follow, the Court finds that Plaintiff’s claims are not yet ripe for

adjudication. Therefore, the Court grants Defendants’ Motion to Dismiss pursuant

to Court of Chancery Rule 12(b)(1). As such, Defendants’ Motion to Dismiss

pursuant to Court of Chancery Rule 12(b)(6) is moot.




Pursuant to In re: DESIGNATION OF THE HONORABLE MEGHAN A. ADAMS under Del.
Const. art. IV § 13(2) dated March 16, 2023.
                                           2
                                      II.    FACTS2

A.     THE PARTIES

       Plaintiff VT Shareholder serves as the representative for the Former

Participating Holders of Valtech Cardio Ltd. (the “Sellers”).3 Defendant Edwards

develops and manufactures structural heart therapies4 and is “self-described” as a

“global leader” in innovative structural heart disease treatments.5 Defendant Valtech

was a private company specializing in heart valve disease treatments and is now a

subsidiary of Edwards.6 Valtech is responsible for developing the Cardioband

System (“Cardioband”), which repairs mitral and tricuspid valves through a

catheter.7

B.     THE CARDIOBAND PRODUCT

       The Cardioband product is unique for its ability to “combine direct adjustable

annuloplasty (i.e., tightening or reinforcing a leaky heart valve with a ring) with a

transcatheter approach to the heart.”8 Cardioband provides an alternative for patients

who are ineligible for open-heart surgery.9 The procedure can be a “life-saving”



2
  The facts are drawn from the Complaint and the exhibits attached thereto, which includes the
Agreement and Plan of Merger (Ex. A), and Edwards’ Letter of Intent (Ex. B).
3
  Compl. ¶ 15.
4
  Id. ¶ 1.
5
  Id. ¶ 7.
6
  Id. ¶ 1.
7
  Id.
8
  Id. ¶ 2.
9
  Id.
                                              3
treatment for patients who have particular complications.10 Cardioband has not yet

been approved for use in the United States, but it has been sold in Europe to treat

mitral regurgitation since 2015.11 Cardioband presents a “several-billion dollar

market opportunity” considering the number of patients affected by these heart

issues in the United States.12

        Cardioband has products that treat two common heart diseases: mitral

regurgitation and tricuspid valve regurgitation.13 Mitral regurgitation (“MR”) “is a

heart condition in which the mitral valve leaflets (small flaps of tissue) fail to close

properly, allowing blood to backflow from the left ventricle (the lower chamber of

the heart) into the left atrium (the upper chamber).”14 In 2015, approximately 4.2

million Americans were affected by MR.15 Cardioband developed an MR product

(“Cardioband MR”) that can treat patients who are ineligible for open-heart

surgery.16 Tricuspid regurgitation (“TR”) “is a heart condition in which blood leaks

from the right ventricle into the right atrium due to the tricuspid valve leaflets’ failure

to close properly.”17 In 2018, there were approximately 1.6 million Americans with




10
   Id. ¶ 3.
11
   Id.
12
   Id. ¶ 23.
13
   Id. ¶ 22.
14
   Id. ¶ 23.
15
   Id.
16
   Id. ¶ 26.
17
   Id. ¶ 30.
                                            4
moderate-to-severe TR.18 Cardioband has a similar product to Cardioband MR,

(“Cardioband TR”) that treats TR using a transcatheter delivery system.19

C.     THE MERGER

       On August 1, 2016, Edwards signed a Letter of Intent “outlining the principal

terms and conditions on which it would acquire Valtech and the Cardioband product

line from the Sellers.”20 On November 26, 2016, the parties entered into the

Agreement and Plan of Merger (the “Merger Agreement”)21 wherein Edwards

acquired Valtech from the Sellers.22 Edwards paid the Sellers $340 million up-front,

and the parties agreed to an additional $350 million in potential earn-out payments

(the “Earn-Out Payments”).23             Upon completion of development targets for

Cardioband, Edwards and Valtech agreed to pay the Earn-Out Payments.24 The

Merger Agreement delineates four Earn-Out Payments:

       (i)     a one-time payment of $50 million to the Sellers in the event
               Edwards or any of its subsidiaries ‘receives written CE Mark for
               a Cardioband Product25 for reconstruction or repair of the


18
   Id.
19
   Id. ¶ 32.
20
   Id. ¶ 34 (citing Ex. B at 1).
21
   Id. (citing Ex. A).
22
   Id. ¶ 4.
23
   Id.
24
   Id.
25
   The Merger Agreement defines “Cardioband Product” as, “collectively, (a) any transcatheter
system, device or technology for reconstruction or repair of the mitral valve or tricuspid valve by
direct adjustable annuloplasty, which is or is derived from the Cardioband product that received
CE Marking in 2015 (the ‘CE Marked Product or Derivative Product’) and (b) any transcatheter
system, device or technology for reconstruction or repair of the mitral valve or the tricuspid valve
by direct adjustable annuloplasty, covered by, derived from, using or that infringes or would
                                                 5
               tricuspid valve by direct adjustable annuloplasty on or prior to
               the last day of the Earn-Out Period’ (the ‘CE Mark Milestone’);26
       (ii)    a one-time payment of $150 million to the Sellers in the event
               Edwards or any of its subsidiaries ‘received written FDA
               approval for a Cardioband Product for reconstruction or repair of
               the mitral valve by direct adjustable annuloplasty on or prior to
               the last day of the Earn-Out Period’ (the ‘FDA Mitral
               Milestone’);
       (iii)   a one-time payment of $50 million to the Sellers in the event
               Edwards or any of its subsidiaries ‘receives written FDA
               approval for a Cardioband Product for reconstruction or repair of
               the tricuspid valve by direct adjustable annuloplasty on or prior
               to the last day of the Earn-Out Period’ (the ‘FDA Tricuspid
               Milestone’); and
       (iv)    a one-time payment of $100 million to the Sellers in the event
               Edwards and its subsidiaries ‘generate Net Sales during any four
               (4) consecutive fiscal quarters during the period beginning on the
               first day of the first calendar month following the calendar month
               including the Effective Time and ending on the last day of the
               Earn-Out Period, of the Cardioband Product in excess of six
               hundred fifty million dollars ($650,000,000) in the aggregate
               over such four (4) consecutive fiscal quarters’ (the ‘Net Sales
               Milestone,’ collectively the ‘Milestones’ and each a
               ‘Milestone’).27
       The Merger Agreement requires Edwards and Valtech to use “commercially

reasonable efforts (including with respect to manner and timeframe) to . . . satisfy

the conditions of and achieve each of the FDA Mitral Milestone, the FDA Tricuspid

Milestone and the Net Sales Milestone (including by using commercially reasonably

efforts to Commercialize the Cardioband Product in order to achieve the Net Sales



infringe upon, any Company Intellectual Property used in or related to the CE Marked Product or
Derivative Product.” Merger Agreement at A-2.
26
   This milestone is not at issue because it was already met in 2018. Compl. ¶ 4 n.2.
27
   Id. ¶ 38 (citing Merger Agreement § 1.11(k) & Ex. A to Merger Agreement).
                                              6
Milestone) . . . .”28 The Merger Agreement outlines factors to determine if actions

are “commercially reasonable” including:

         (A) developments in the market of such Cardioband Product, (B) the
         expected size of the market for such Cardioband Product, (C) profit
         margins, (D) the level of regulatory approval that may be available for
         such Cardioband Product (including the extent of the indications for
         which such Cardioband Product may be approved), (E) the level of
         reimbursement that may be available for the Cardioband Product, (F)
         the cost and outcome of any clinical trials, (G) the safety and efficacy
         of the Cardioband Product, (H) the Intellectual Property protection of,
         and known third party infringement by, such Cardioband Product, (I)
         the known presence of third-party Intellectual Property that may impact
         the marketability of such Cardioband Product, (J) the presence or
         absence of particularly difficult manufacturing issues, (K) the expected
         competitive position of such Cardioband Product vis-à-vis other
         therapies that have been or are developed, marketed and sold (or that
         have been or are developed and that have received all required
         regulatory approvals necessary for the marketing and sale of such other
         therapies) for the same or similar indications, including with respect to
         the expected or actual efficacy and cost of such Cardioband Products
         when compared to such other products, (L) the cost of development,
         and (M) Parent’s and its Affiliates overall portfolio of products
         (provided that, in no event, will any products competitive to any of the
         Cardioband Products that are or become part of Parent’s or its
         Affiliates’ portfolio of products be a determinative factor in such
         assessment) . . . .29

         The Merger Agreement also requires Edwards and Valtech to use

“commercially reasonable efforts (including with respect to manner and timeframe)

to receive approval for and conduct the FDA trial (or such other FDA trial as Parent

determines is reasonably practicable following further discussion and investigation


28
     Merger Agreement § 1.11(k)(i).
29
     Id.
                                            7
with the FDA) during the Earn-Out Period.”30                 Prior to signing the Merger

Agreement, the Sellers rejected a provision that would have given Edwards “‘sole

and complete discretion in its determination as to when or whether to seek or

achieve’ the FDA mitral and tricuspid milestones.”31 If the § 1.11(k) provisions are

breached by Edwards or its subsidiaries, “the unearned Contingent Payments that

are affected by such breach will become immediately due and payable regardless of

whether the related Milestones have been achieved.”32

       The Merger Agreement provides a ten-year window called the “Earn-Out

Period” as the “date all Contingent Payments have been paid to the Participating

Holders.”33 The Earn-Out Period concludes on the tenth anniversary of the closing

date: January 23, 2027.34

D.     CARDIOBAND DEVELOPMENT EFFORTS

       1)     Cardioband MR

       In September of 2015, Valtech obtained CE Mark approval35 for Cardioband

MR which allowed for the medical device to be sold in European Union countries.36


30
   Id. § 1.11(k)(ii)(B).
31
   Compl. ¶ 37.
32
   Merger Agreement § 1.11(k)(v).
33
   Id. at A-6.
34
   See Compl. ¶ 48.
35
   “The Conformite Europeenne Mark (‘CE Mark’) is a European Union prerequisite for a medical
device to be sold in member countries. CE Mark indicates that a product has been assessed by the
manufacturer and deemed to meet EU safety, health, and environmental protection requirements.”
Id. ¶ 27.
36
   Id.
                                               8
Valtech proceeded with obtaining FDA approval and “projected that the FDA Trial

would be ramping up by the first half of 2017.”37 The Cardioband TR had an

anticipated CE Mark approval date of the second half of 2017.38

       “The FDA Trial was originally projected to take place at up to seventy-five

sites beginning in April 2017, with an anticipated ‘Primary Completion’ date of

December 2019 and a final ‘Study Completion’ date of December 2023.”39 Despite

the FDA Trial’s study protocol desiring a pivotal cohort of 375 patients, up to a total

of 600, as of March 2023, Edwards enrolled only twelve patients across twenty-four

study sites.40 Edwards also has not “actively recruited for the FDA Trial since

November 2018.”41 Edwards asserted in SEC filings that patient enrollments were

stalled as a result of the COVID-19 pandemic; however, publicly available

information indicates that Edwards’ recruitment efforts stopped a year prior to the

pandemic’s inception.42 Edwards also noted in correspondence with Plaintiff that

“Cardioband had deficient and undocumented supply-chain and manufacturing

processes,” and that Edwards had to engage with interventional cardiologists to




37
   Id. ¶¶ 28–29.
38
   Id. ¶ 33.
39
   Id. ¶ 52.
40
   Id. ¶¶ 51–52.
41
   Id. ¶ 52.
42
   Id. ¶ 53.
                                          9
undergo a redesign of the Cardioband product.43 In the Complaint, Plaintiff disputed

Edwards’ assertions and instead pled that these deficiencies were merely pretext.44

      On December 8, 2016, Edwards introduced PASCAL, a product similar to

Cardioband, and indicated its intentions to initiate a PASCAL CE Mark study in

2017.45 PASCAL and Cardioband are direct competitors,46 but when announced,

PASCAL was not as developed as Cardioband.47 Prior to PASCAL’s introduction

in December 2016, Plaintiff was unaware of its existence, nor Edwards’ plans to

advance it.48 Since closing, Edwards has undergone “significant investments to

develop and commercialize” PASCAL, including taking substantial steps towards

obtaining FDA approval and by enrolling ten times as many patients in PASCAL’s

trial compared to its related Cardioband trial.49 Edwards obtained CE Mark approval

for PASCAL MR in February 2019 and FDA approval to market PASCAL for

treatment of MR on September 14, 2022.50 Plaintiff argues that the development

and success of PASCAL proves Edwards is “well aware of the efforts it must

undertake to conduct clinical trials for, obtain FDA approval of, and commercialize



43
   Id. ¶ 54.
44
   Id. ¶¶ 54–57.
45
   Id. ¶ 59.
46
    PASCAL and Cardioband are both designed to treat patients for symptomatic mitral
regurgitation who are high-risk for open-heart surgery. Id. ¶ 61.
47
   Id. ¶ 59.
48
   Id.
49
   Id. ¶¶ 62–63.
50
   Id. ¶¶ 65–66.
                                        10
a transcatheter mitral valve repair system” despite Defendants’ failures to do so for

its Cardioband products.51

       2)      Cardioband TR

       Edwards obtained CE Mark approval to sell Cardioband TR in April 2018.52

Since then, Edwards has launched a post-market study for Cardioband TR, but it has

not undertaken additional steps to obtain FDA approval.53 In the same time period,

Edwards obtained CE Mark approval for PASCAL TR and received approval to

conduct clinical trials on PASCAL TR.54 Edwards also devoted resources to other

mitral and tricuspid systems, including by conducting trials and obtaining FDA

approval for these products.55

       3)      Net Sales

       In the past three years, Cardioband’s global annual net sales ranged from

approximately $2.76 million to $4.93 million, falling significantly below the net

sales target in the Merger Agreement of $650 million.56 In comparison, Edwards’

total sales for all transcatheter mitral and tricuspid therapies have “increased

dramatically” thanks primarily to PASCAL’s developments.57 Plaintiff requested



51
   Id. ¶ 67.
52
   Id. ¶ 69.
53
   Id. ¶ 70.
54
   Id. ¶ 71.
55
   Id. ¶ 72.
56
   Id. ¶¶ 74–75.
57
   Id. ¶ 75.
                                         11
Edwards to provide information, in compliance with the Merger Agreement,

detailing its efforts to improve Cardioband, but Edwards failed to adequately do so.58

Plaintiff asserted that “Edwards acquired Cardioband to shelve it and eliminate

PASCAL’s main competitive threat”59 despite such a strategy directly violating the

Merger Agreement.60

                           III.   PROCEDURAL HISTORY

        On March 14, 2023, Plaintiff filed a complaint alleging four counts of breach

of contract:

     • Count I: Failure to Use “Commercially Reasonable Efforts” to Achieve the

        FDA Mitral Milestone pursuant to Section 1.11(k)(i) of the Merger

        Agreement;61

     • Count II: Failure to Use “Commercially Reasonable Efforts” to Conduct the

        FDA Trial pursuant to Section 1.11(k)(i) of the Merger Agreement;62




58
   Id. ¶¶ 80–83. “As an example, for the past two years, Edwards’ summary report on Cardioband’s
progress has stated that ‘[n]ext generation systems and imaging innovations are in development to
meaningfully shorten procedure time and improve ease of use,’ without providing any explanation
of what those ‘next generation systems’ or ‘imaging innovations’ are, how they will shorten the
time and ease of use or improve the commercial viability of the Cardioband product, or why they
must be implemented before achieving the Milestones.” Id. ¶ 80 (emphasis in original).
59
   Id. ¶ 8.
60
   Id. ¶ 10.
61
   Id. ¶¶ 85–94.
62
   Id. ¶¶ 95–103.
                                               12
     • Count III: Failure to Use “Commercially Reasonable Efforts” to Achieve the

        FDA Tricuspid Milestone pursuant to Section 1.11(k)(ii)(B) of the Merger

        Agreement;63

     • Count IV: Failure to Use “Commercially Reasonable Efforts” to Achieve the

        Net Sales Milestone pursuant to Section 1.11(k)(i) of the Merger Agreement.64

        On May 10, 2023, Defendants filed a Motion to Dismiss all claims arguing

that: (1) the claims are not ripe for adjudication; and (2) Plaintiff failed to state a

claim.65 Briefing concluded on August 30, 2023. The Court held oral argument on

September 27, 2023, and reserved decision.

                           IV.    STANDARD OF REVIEW

        On a motion to dismiss pursuant to Court of Chancery Rule 12(b)(1), the

burden is on the non-moving party to establish the Court’s jurisdiction.66 Subject

matter jurisdiction requires a ripe issue which is reviewed on a case-by-case basis.67

To determine ripeness, the Court should “view the material factual allegations of the

complaint as true,”68 and “all inferences therefrom should be construed in the non-




63
   Id. ¶¶ 104–13.
64
   Id. ¶¶ 114–23.
65
   Defs.’ Br. in Supp. of Mot. to Dismiss at 11.
66
   de Adler v. Upper New York Inv. Co. LLC, 

, at *7 (Del. Ch. Oct. 31, 2013).
67
   B/E Aerospace, Inc. v. J.A. Reinhardt Hldgs., LLC, 

, at *1 (Del. Super. July
21, 2020).
68
   Diebold Comput. Leasing, Inc. v. Com. Credit Corp., 

 (Del. 1970) (citing
DuPont v. DuPont, 

 (Del. 1951)).
                                             13
moving party’s favor.”69 The Court should dismiss the claim if “future events may

‘obviate the need for judicial intervention.’”70

                                     V.     ANALYSIS

A.     RIPENESS

       The Declaratory Judgment Act authorizes Delaware courts to “declare rights,

status and other legal relations whether or not further relief is or could be claimed.”71

The Court has discretion as to whether to grant a declaratory judgment so long as

there is an “actual controversy.”72         Despite this discretion, courts “should be

especially cautious when the request for relief in a declaratory judgment raises

‘novel and important [issues] to Delaware Corporate Law.’”73 The Supreme Court

of Delaware established a four-part test for determining an “actual controversy:”

       (1) It must be a controversy involving the rights or other legal relations
       of the party seeking declaratory relief; (2) it must be a controversy in
       which the claim of right or other legal interest is asserted against one
       who has an interest in contesting the claim; (3) the controversy must be
       between parties whose interests are real and adverse; (4) the issue
       involved in the controversy must be ripe for judicial determination.74




69
   de Adler, 

, at *7 (internal citations omitted).
70
   B/E Aerospace, Inc., 

, at *2 (quoting XL Specialty Ins. Co. v. WMI Liquidating
Tr., 

 (Del. 2014)) (emphasis in original).
71
   10 Del. C. § 6501.
72
   XL Specialty, 

 (citing Gannett Co., v. Bd. of Managers of the Del. Crim. Just.
Info. Sys., 

 (Del. 2003)).
73
   Energy P’rs, Ltd. v. Stone Energy Corp., 

, at *11 (Del. Ch. Oct. 11, 2006)
(quoting Bebchuck v. C.A., Inc., 

 (Del. Ch. 2006)).
74
   Rollins Int’l Inc. v. Int’l Hydronics Corp., 

, 662–63 (Del. 1973).
                                              14
If there is no “actual controversy” between the parties, then the Court must decline

to issue a declaratory judgment.75

       The Declaratory Judgment Act authorizes the court to “adjudicate a

controversy prior to the time when a remedy is traditionally available and, thus, to

advance the stage at which a matter is traditionally justiciable.”76 The Act is

“remedial in character and [] the term ‘actual controversy’ should be liberally

interpreted.”77 Declaratory judgments allow for “preventive justice”78 because

“legitimate legal interests are sometimes cast into doubt by the assertion of adverse

claims and that, when this occurs, a party who suffers practical consequences ought

not to be required to wait upon his adversary for a judicial resolution that will settle

the matter.”79 Declaratory judgments allow parties to solve questions about a

contract’s construction or validity, clarify legal rights, and other legal matters.80

       “[R]ipeness is a critical element of a declaratory judgment action.”81 For an

issue to be “ripe for judicial determination” the court must find that the “material

facts are static and that the rights of the parties are presently defined rather than


75
   Stone Energy Corp., 

, at *6.
76
   Rollins Int’l Inc., 

 (citing Diebold Comput. Leasing, Inc., 267 A.2d at 591–92).
77
   

78
   Schick Inc. v. Amalgamated Clothing & Textile Workers Union, 

, 1237–38 (Del.
Ch. 1987) (quoting Stabler v. Ramsay, 

 (Del. 1952)).
79
   

 (citing Diebold Comput. Leasing, Inc., 

).
80
   See Tygon Peak Cap. Mgmt., LLC v. Mobile Invs. Investco, LLC, 

, at *9 (Del.
Ch. Jan. 4, 2022). See also Town of Cheswold v. Cent. Del. Bus. Park, 

 (Del.
2018) (determining the effect of a town ordinance).
81
   Shevock v. Orchard Homeowners Ass’n, 

 (Del. 1993).
                                               15
future or contingent.”82        “A ripeness determination requires a common sense

assessment of whether the interests of the party seeking immediate relief outweigh

the concerns of the court in postponing review until the question arises in some more

concrete and final form.”83 “Plaintiffs must allege that present harms will flow from

the threat of future action.”84 The burden of establishing the court’s subject matter

jurisdiction is with the party seeking the court’s intervention.85                  The ripeness

requirement for judicial opinions prevents courts from rendering advisory opinions

or adjudication of hypotheticals.86 “[A] dispute will be deemed not ripe where the

claim is based on uncertain and contingent events that may not occur, or where future

events may obviate the need for judicial intervention.”87

       If a declaratory judgment is issued when a case is not ripe, there are “two

principal dangers—squandering scarce judicial resources, and intervening in a

controversy where the specific facts do not necessitate judicial intervention.”88 To

determine whether a case is ripe, courts make a practical determination of “whether

the parties’ conflicting contentions present a genuine and substantial controversy



82
   Stroud v. Milliken Enters., Inc., 

 (Del. 1989) (citing Stabler, 

).
83
   S’holder Representative Servs. LLC v. Alexion Pharms., Inc., 

, at *5 (Del.
Ch. Sept. 1, 2021) (quoting XL Specialty, 93 A.3d at 1217–18).
84
   Stone Energy Corp., 

, at *7 (internal citations omitted).
85
   B/E Aerospace, Inc., 

, at *1.
86
   See Stone Energy Corp., 

, at *6 (citing Stroud, 

); Rollins Int’l
Inc., 

 (citing Stabler, 

).
87
   Alexion, 

, at *5 (quoting XL Specialty, 93 A.3d at 1217–18).
88
   B/E Aerospace, Inc., 

, at *5 (citing Schick Inc., 

).
                                                16
between parties having adverse legal interests.”89 This determination weighs various

interests including the plaintiff’s interest in a prompt response, the plaintiff’s

hardship upon further delay, conservation of judicial resources, and the likelihood

that new facts will impact the determination.90 Courts have found cases ripe for

review when the “eventual litigation appears to be unavoidable;”91 however, a “court

cannot accelerate an embryonic matter to a stage traditionally justiciable if doing so

would produce an advisory opinion along the way.”92 Facts are required to be static

and concrete because if not, “it runs the risk not only of granting an incorrect

judgment, but also of taking an inappropriate or premature step in the development

of the law.”93

       Defendants argue that Plaintiff’s allegations are not ripe for judicial review

for three reasons:94 (1) “the claims here are not ‘unavoidable’ or based on a ‘static’

set of ‘material facts[;]’”95 (2) “they are expressly ‘based on uncertain and contingent

events that may not occur[;]’”96 and (3) “‘future events may obviate the need’ for


89
   Stone Energy Corp., 

, at *6 (citing Anonymous v. State, 

, at
*4 (Del. Ch. June 1, 2000)).
90
   Schick Inc., 

. See also B/E Aerospace, Inc., 

, at *5; Shevock,

.
91
   Rollins Int’l Inc., 

 (citing Stabler, 

).
92
   Humanigen, Inc. v. Savant Neglected Diseases, LLC, 

, at *8 (Del. Super. Sept.
23, 2021).
93
   Stroud, 

.
94
   All four Counts rely on related facts and therefore this Court considers them collectively. While
the Milestones are distinct from each other, the underlying assessment of the facts leading up to
this suit, and potentially throughout the remainder of the Earn-Out Period are related.
95
   Defs.’ Br. in Supp. of Defs.’ Mot. to Dismiss at 12–14 (citing XL Specialty, 

).
96
   

 at 14 (citing XL Specialty, 93 A.3d at 1217–18) (internal citations omitted).
                                                17
the very ‘judicial intervention’ Plaintiff seeks.”97 Plaintiff did not dispute the

existence of the ten-year Earn-Out period, but instead argued its claims are ripe

because Defendants have already breached their obligations, regardless of the

ongoing performance period.98

       1)   It is Not Immediately Clear that Litigation is Probable or Imminent
            to Justify a Declaratory Judgment.
       Goldenberg v. Immunomedics, Inc.,99 a recent decision from this Court

regarding ripeness, is instructive on the issue of probable or imminent litigation. In

Goldenberg, an employee sought declaratory judgment based on his employment

agreement.100 The employee argued that the company “has a history of failing to

comply with its obligations[,]” thereby making the dispute ripe.101 The court

disagreed.102 The employment provision was tied to a royalties provision that the




97
   

 at 14–15 (citing XL Specialty, 

).
98
   Pl.’s Opp’n to Defs.’ Mot. to Dismiss at 36.
99
   Goldenberg v. Immunomedics, Inc., 

 (Del. Ch. Apr. 19, 2021).
100
    Id. at *1. The Court notes Plaintiff’s criticism that Defendants “d[id] not cite a single earnout
case in which a court concluded that claims were not ripe because the earnout period had not yet
expired.” Pl.’s Opp’n to Defs.’ Mot. to Dismiss at 40 n.7. Defendants did not dispute this at oral
argument but noted that it is inconsequential because “the ripeness legal standard is one that applies
regardless of the factual context.” VT S’holder Representative, LLC v. Edwards Lifesciences
Corp., C.A. No. 2023-0316, at 35 (Del. Ch. Sept. 27, 2023) (TRANSCRIPT). This Court agrees.
Ripeness is “far more demanding of the non-movant than Rule 12(b)(6) motions to dismiss.” B/E
Aerospace, Inc., WL 4195762, at *1 (internal quotations omitted). While similar earn-out cases
may be instructive to this Court, such cases are not the only applicable cases that address the
ripeness standard and how it must be applied.
101
    Goldenberg, 

, at *20.
102
    

                                                 18
court noted may never generate royalties and consequently may never result in a

dispute or litigation.103 Therefore, the issue was not ripe for judicial review.104

       Here, Plaintiff provides examples of Defendants’ past failure to proceed to

required trials, and their success with PASCAL, to suggest that Defendants failed to

use “commercially reasonable efforts.” As in Goldenberg, this past behavior is not

sufficient to establish a future breach. Even if the Court accepts as true Plaintiff’s

contentions that Defendants have failed to use “commercially reasonable efforts” so

far, this, like Goldenberg, may never result in a claim if Defendants can achieve the

Milestones by the end of the Earn-Out Period.

       The Supreme Court of Delaware’s decision in XL Specialty Insurance Co. v.

WMI Liquidating Trust105 also made clear that in order for a claim to be ripe, it must

“assume[] a concrete or final form.”106 In XL Specialty, the Supreme Court held that

the “[t]rust seeks a judicial determination that, if made, would necessarily be

premised on uncertain and hypothetical facts and that ultimately may never become

necessary.”107 Thus, the plaintiff failed to “establish a ‘reasonable likelihood’ that

coverage under the disputed policies will be triggered.”108 Plaintiff did not plead



103
    

104
    

105
    XL Specialty Ins. Co. v WMI Liquidating Tr., 

 (Del. 2014).
106
    

.
107
    

.
108
    

 (citing Hoechst Celanese Corp., v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 

 (Del. Super. 1992)).
                                               19
that there was a reasonable likelihood the policies would be implicated, and thus any

judgment would have been too speculative and based on “what-ifs.”109 “The Trust’s

only interest in having its dispute litigated [at the time was] apparently to receive

judicial guidance about how much coverage would be available . . . if the Trust were

to initiate litigation against them.”110 Without additionally pled interests, this was

insufficient to support a finding of ripeness.111

       Like in XL Specialty, the facts here are not yet concrete. Plaintiff asserted,

among other things, that the failure to enroll more patients and the focus on PASCAL

sufficiently shows that Defendants breached their ongoing duty to use

“commercially reasonable efforts.” Such activities, however, while potentially

supportive of “unreasonable” efforts, are not completed activities, i.e., the

insufficient enrollment, while presently detrimental to Cardioband, is not static

because the study itself has not yet been cancelled or stopped. Defendants may still

complete the study in time to achieve the Milestone by the end of the Earn-Out

Period in such a way that is “commercially reasonable.”112 Like in XL Specialty,


109
    

.
110
    

.
111
    

112
    As Defendants pointed out during oral argument, “Your Honor, there is a world in which we
litigate this case before Your Honor, we prevail on summary judgment, and in three or three and a
half years from now, we are back before this court litigating the same issues of commercial
reasonableness. That’s inefficient. That’s why this case is not ripe. That’s why Edwards should
get the ten-year earn-out period that it bargained for.” VT S’holder Representative, LLC v.
Edwards Lifesciences Corp., C.A. No. 2023-0316, at 81 (Del. Ch. Sept. 27, 2023)
(TRANSCRIPT).
                                               20
Plaintiff here has not shown that there is a reasonable likelihood the Milestones will

not be met.

       Finally, the facts here are evolving, as evidenced by the number of changes to

both Cardioband and PASCAL products that have occurred so far. Plaintiff asks the

Court to make a premature decision and “inappropriately draw the [C]ourt into a

granting of an advisory opinion” while the facts continue to change. 113 Of note,

while the Milestones are targets, there is no guarantee that these Milestones will be

met, even if Defendants consistently used “commercially reasonable efforts.”114

Defendants assert that they still may achieve the Milestones in the time remaining

and thus this issue would never need to be litigated.115 If Defendants fail to do so,

then it would be appropriate for the Court to review all of Defendants’ efforts to

determine if they were “commercially reasonable”—to do so now would be

premature.116




113
    Stroud, 

.
114
     Merger Agreement § 1.11(a) (“Each Contingent Payment made hereunder will, in each
instance, be paid only once (if at all).”).
115
    Defs.’ Br. in Supp. of Defs.’ Mot. to Dismiss at 15.
116
    See Stroud, 

. In Stroud, the court found a challenge to proposed charter and
bylaw amendments were not ripe because the facts were not concrete, nor in any final form. 

The court determined that the parties had “inappropriately drawn the trial court into the granting
of an advisory opinion upon a significant question of corporation law.” 

. Given the
changing facts, and the facts’ impact on any legal determination, the court held that the issue was
not yet ripe. 

                                               21
         2)    Plaintiff has Not Presented a Current or Immediate Future Harm
               that Would Merit the Court Issuing a Declaratory Judgment.

         In the context of assessing a complaint for ripeness, the court will also

consider the immediate or future harm suffered by plaintiff, and whether that harm

outweighs the possibility of waiting until new facts arise, or changed circumstances

occur.

         Two cases from this Court, albeit in different contexts, provide guidance. In

MPT of Hoboken TRS, LLC v. HUMNC Holdco, LLC,117 plaintiff sought a

declaratory judgment to declare a breach of an LLC’s operating agreement.118

Defendant argued that the claim was not ripe because plaintiff did not allege any

current or imminent harm as a result of challenged operating procedures.119 The

court found that there was a sufficient risk of future harm, given that the dispute

“places a cloud over the management” of the LLC.120 Because of this risk, the court

held that the claim was ripe.121

         In Solak v. Sarowitz,122 the stockholders sought a declaratory judgment to

deem invalid certain fee-shifting bylaws.123 Defendant argued that declaratory



117
    MPT of Hoboken TRS, LLC v. HUMNC Holdco, LCC, 

 (Del. Ch. July 22,
2014).
118
    Id. at *8.
119
    Id.
120
    Id. at *8–9.
121
    Id.
122
    Solak v. Sarowitz, 

 (Del. Ch. 2016).
123
    

.
                                           22
judgment was not ripe because there was no action filed to trigger the challenged

bylaws, and there was no indication of plaintiff’s intention to file such a suit.124

Despite no pending litigation, the court determined that the stockholders did face an

immediate harm as a result of the fee-shifting bylaws.125 The bylaws created a

personal liability that would render it “highly unlikely that any rational stockholder”

would challenge the bylaw.126 When challenged procedures have a substantial

deterrent effect, like the fee-shifting bylaws did, they are ripe for review.127 The

court further noted that declining review could also “encourage other corporate

boards to adopt similar bylaws to take advantage of their potent deterrent effect on

stockholders without regard to whether such provisions are legally permissible.”128

      This case is distinguishable from HUMNC Holdco and Solak, where the

existence of present or future harm created an issue ripe for judicial determination.

Unlike in Solak, where the court found the present harm of the problematic bylaws

was to create a deterrent effect on the shareholders asserting their rights, here, there

is no present harm facing plaintiff. In HUMNC Holdco, the court found that the lack

of clarity surrounding the LLC’s operating agreement created a sufficient “risk of

future harm” because the dispute impacted management capacity.129 Here, there is


124
    

.
125
    

 at 738–39.
126
    

 at 737–38.
127
    

.
128
    

129
    HUMNC Holdco, 

, at *8–9.
                                          23
no present or immediate future harm other than the Plaintiff will not receive its Earn-

Out Consideration immediately.           This “harm” is insufficient because even if

Defendants are using “commercially reasonable efforts,” the Merger Agreement

created the risk that Plaintiff would wait ten years before receiving the Milestone

payouts, if ever. Without additional harm alleged, Plaintiff fails to show why they

are entitled to declaratory relief.

       Here, Plaintiff requests damages in the amount it would be owed if the

Milestones had been completed.130 If the Court does not find the issue ripe, there

are two potential outcomes. One, Defendants could achieve all the Milestones and

pay the consideration, rendering any challenge for damages moot.131                      Two,

Defendants could fail to achieve some or all the Milestones and Plaintiff could then

claim Defendants failed to use “commercially reasonable efforts.” At that time, the

Court may find that, despite not meeting the Milestones, Defendants did use

“commercially reasonable efforts” and therefore Plaintiff has no grounds to recover.

Alternatively, if the Court finds Defendants failed to use “commercially reasonable

efforts” then Plaintiff would recover the exact same damages sought in the present




130
   Compl. at 48–50.
131
   See, e.g., Klein v. ECG Topco Hldg., LLC, 

, at *4 (Del. Ch. July 8, 2022)
(“Regardless of the internal inconsistency of having to pay off the principal balance of a note
before its issuance, the plaintiffs have not been harmed by any non-payment of the Triggering
Event Purchase Price—however defined—because payment is not yet due. . . Judicial intervention
may ultimately prove unnecessary.”).
                                              24
lawsuit: the amount of the Earn-Out Consideration, together with costs, prejudgment

interest, and reasonable attorneys’ fees.

       If the Court were to review this issue as it is currently presented and find that

Defendants have failed to use “commercially reasonable efforts,” it is unclear how

paying the consideration early would impact the Merger Agreement and the parties’

ongoing relationship. The Court need not predict or consider future business

decisions. If the Defendants are proceeding toward completing the Milestones and

must pay the consideration early, Defendants may be vulnerable to another challenge

in the future, should their strategy change as a result of the reduced capital available.

These hypotheticals reinforce that there are still too many contingent and changing

circumstances for the Court to deem the issue ripe.132

       3)      Despite Some Factual Similarities, Alexion is not Dispositive of All
               Ripeness Challenges in Earn-Out Cases.133
       Plaintiff relies heavily on this Court’s recent decision in Shareholder

Representative Services, LLC v. Alexion Pharmaceuticals, Inc.134                      In Alexion,




132
    The Court in Hexion Specialty Chemicals, Inc. v. Huntsman Corp. noted that when there are
many possible outcomes the issue is not ripe because of the many possibilities that could occur
without necessitating judicial intervention. Hexion Specialty Chems. Inc. v. Hunstman Corp., 

 (Del. Ch. 2008). See also B/E Aerospace, Inc., 

, at *6 (finding
unripe a claim for remediation damages wherein multiple possibilities could occur, including the
need for remediation, and the lack of need).
133
    The depth at which the Court reviews Alexion should not suggest any priority or importance of
this case over others, but instead the Court addresses the distinctions between the present case and
Alexion because of the amount Alexion was addressed in both briefings and during oral argument.
134
    

 (Del. Ch. Sept. 1, 2021).
                                                25
Alexion Pharmaceuticals (“Alexion”) and Syntimmune Inc. (“Syntimmune”)

entered into a merger agreement wherein Alexion acquired a pharmaceutical

candidate to treat rare autoimmune diseases.135 The merger agreement included

“Milestone Events” wherein Syntimmune was entitled to Earn-Out Payments when

and if Syntimmune achieved certain targets.136 Alexion agreed to use “commercially

reasonable efforts” to achieve the Milestones within the first seven years of the

closing.137 Two years after the closing date, Syntimmune’s pre-merger stockholders

(the “Shareholders”) asserted that Alexion failed to use “commercially reasonable

efforts” to achieve the milestones.138 Alexion responded that the claim was not yet

ripe because there were five years remaining.139 Alexion also raised a claim against

Shareholders for indemnification for “allegedly defective batches of drug product it

received from Syntimmune.”140

       The court found that despite the seven-year agreement, the claim for breach

of contract was ripe because “the claim depends only on Alexion’s past conduct.”141

The court found unpersuasive Alexion’s argument that they could still achieve the

Milestone Events despite their previous lapse because that “conflates [Alexion’s]


135
    Alexion, 

, at *1.
136
    

137
    Id. at *2.
138
    Id. at *3.
139
    Id. at *4.
140
    Id. at *3–4.
141
    Id. at *6 (emphasis in original) (noting that the breach of a contract accrues at the time of the
breach).
                                                26
obligation to pay upon certain results, at any time, with its obligation to pursue those

results with a certain amount of diligence for a period of time.” 142 The failure to

meet the “commercially reasonable efforts” could “be determined on a record

developed from currently available evidence.”143 Unlike a long-term result, the

“commercially reasonable efforts” clause of the merger agreement required

“persistent efforts for the entire contractual seven-year period.”144 Alexion’s past

failure to exercise “commercially reasonable efforts” could not be cured by future

efforts that met the standard. “Alexion’s substandard past efforts are static, and that

breach can be adjudicated now.”145

       Here, Plaintiff relied on Alexion to show that a claim can be ripe prior to the

end of an agreed-upon Earn-Out Period.146 While true that the court in Alexion held

that there can be a ripe claim prior to the end of the Earn-Out Period, the Court is

not required to find ripeness if the relevant facts suggest otherwise. Delaware takes




142
    Id.
143
    Id. (quoting Williams v. Ji, 

, at *4 (Del. Ch. June 28, 2017)).
144
    

145
    

 (basing this determination, in part, on the concession by Alexion that they had already failed
to use “commercially reasonable efforts”).
146
    Pl’s. Opp’n to Defs.’ Mot. to Dismiss at 40–41 (“Defendants do not cite a single case in which
a court concluded that claims were not ripe because the earnout period had not yet expired. They
also conspicuously ignore that the Court rejected the same ripeness argument in an earnout case
fewer than two years ago.”).
                                                 27
an objective approach to interpreting contracts,147 and consistently gives great

weight to the language to which the parties negotiated.148

       Similar to Alexion, the Parties here entered into a Merger Agreement with

specific milestones, with identified pay-out amounts for if, and when, those

milestones were met, and a requirement to use “commercially reasonable efforts.”

Both Defendants here and the defendants in Alexion were sued for their conduct prior

to the completion of the Earn-Out Period. The court in Alexion held that even if

there was time remaining, the court could consider the past conduct of the

Defendants to determine if they used “commercially reasonable efforts” up until that

point.149    Therefore, the fact that the earn-out period had not ended was not

determinative of ripeness.

       There are four crucial distinctions between this case and Alexion. First,

Alexion did not dispute that a breach of the “commercially reasonable efforts”

provision had occurred prior to the suit.150 The Court can assume that Alexion’s

concession regarding the breach of “commercially reasonable efforts” assisted the


147
    Neurvana Med., LLC v. Balt USA, LLC, 

, at *15 (Del. Ch. Feb. 27, 2020)
(“The objective theory of contracts requires that a court ‘give priority to the parties’ intentions as
reflected in the four corners of the agreement, construing the agreement as a whole and giving
effect to all its provisions.’”) (quoting In re Viking Pump, Inc., 

 (Del. 2016)).
See also S’holder Representative Servs. LLC v. Albertsons Co., 

, at *6 (Del. Ch.
June 7, 2021).
148
    See Lorillard Tobacco Co. v. Am. Legacy Found., 

 (Del. 2006) (“When
interpreting a contract, the role of a court is to effectuate the parties’ intent.”).
149
    Alexion, 

, at *6.
150
    Id. at *4.
                                                 28
court in Alexion in finding the issue ripe—without such a concession here, this Court

cannot take that step. Unlike in Alexion, where the court found promises of future

conduct insufficient to overcome failures in past conduct,151 here, Defendants did

not admit or concede that their past conduct fell below the required threshold.

       Second, Alexion discussed the practical benefits of finding ripeness, noting

that “[i]t is also sensible to determine whether Alexion breached the Merger

Agreement before faded memories, lost evidence, or other practical hurdles frustrate

that effort.”152 Such language instructs this Court that similar practical concerns

weigh in favor of a review of the facts now, but these examples are not the only

practical considerations. In Alexion, even if the court found that the Earn-Out issue

was not ripe, the case still would have proceeded on the indemnification claim which

dealt with overlapping factual issues.153 The court held that “[a]djudicating claims

with these overlapping factual issues at one time ma[de] practical sense and

further[ed] the ideals of judicial economy the ripeness doctrine advances.”154 Here,

there are no separate claims to be litigated that are not tied to the Earn-Out provision,

so the practical benefit of dealing with like issues together does not apply. The

Plaintiff has not identified why any other practical limitations, including “lost



151
    Alexion, 

, at *6. (“The facts supporting SRS’s claim are static because the
claim depends only on Alexion’s past conduct.”).
152
    Id. at *7.
153
    Id.
154
    Id.
                                             29
evidence” or “faded memories,” is of particular concern here if Plaintiff has to

relitigate these issues at the end of the Earn-Out period, nor does the Court see a

reason for such concern.

         Third, Alexion “discontinued or abandoned” its efforts to achieve the

milestones at the time of the suit.155 While Plaintiff argued Defendants here failed

to make reasonable progress, they did not plead that Defendants abandoned their

efforts entirely. The act of abandonment creates a definitive point in which a Court

can assess past actions for commercially reasonable efforts—distinct from ongoing

efforts—no matter how deficient those efforts may be.         Here, while Plaintiff

compared the minimal effort to improve Cardioband with PASCAL’s

advancements, Plaintiff did not allege that the efforts have been completely

abandoned or ceased. Without complete abandonment by the Defendants, the Court

finds the efforts are ongoing and therefore not yet ripe, especially when the Merger

Agreement provides that the Milestones can be achieved at any point “on or prior to

the last day of the Earn-Out Period.”156

         Fourth, the Merger Agreement in this action includes timeliness language

distinct from Alexion. Here, the Merger Agreement includes the provision that upon

completion of the milestones “on or prior to the last day of the Earn-Out Period”



155
      Id. at *3.
156
      Merger Agreement § 1.11(b)–(d).
                                           30
Defendant will pay the Earn-Out Consideration amount.157 Alexion did not have

comparable language that suggests to this Court that the Defendants had until the

“last day of the Earn-Out Period” to achieve the milestones. Delaware Courts

consistently give high deference to the language of the contract itself; “[w]hen a

contract is clear and unambiguous, the court will give effect to the plain meaning of

the contract’s terms and provisions.”158                   Further, “[t]he parties’ steadfast

disagreement over interpretation will not, alone, render the contract ambiguous.”159

Despite the parties’ dispute about the meaning of the provision “on or prior to the

last day of the Earn-Out Period,” the Court determines that it is not an ambiguous

phrase.160 The Court will give attention to all words in a contract, and finds that this

phrase further distinguishes Alexion. The reasoning in Alexion is based on the

concession to a breach and the fact that the breach is based on past conduct; language

specifically allowing completion “on or prior to the last day of the Earn-Out Period”


157
    Id.
158
    Manti Hldgs., LLC v. Authentix Acq. Co., 

, 1208 (Del. 2021) (internal quotations
omitted). See also Ascension Ins. Hldgs., LLC v. Underwood, 

, at *4 (Del. Ch.
Jan. 28, 2015) (“This jurisdiction respects the right of parties to freely contract and to be able to
rely on the enforceability of their agreements . . . [O]ur courts will enforce the contractual scheme
that the parties have arrived at through their own self-ordering[.]”).
159
    Manti, 261 A.3d at 1208 (internal quotations omitted).
160
    Compare VT S’holder Representative, LLC v. Edwards Lifesciences Corp., C.A. No. 2023-
0316, at 61 (Del. Ch. Sept. 27, 2023) (TRANSCRIPT) (“[T]hat just simply says you have the earn-
out period, right? It doesn’t—I don’t think the [phrase] is dispositive, because that simply says
you have the whole period to achieve the earn-out, which is always the case when you have an
earn-out.”) (Plaintiff’s interpretation), with id. at 74. (“In light of the time limits that the parties
agreed to in this merger agreement, they’re not ripe. . . . Nobody’s disputing that the parties agreed
we would have until on or prior to the last day of the earn-out period to achieve these milestones.”)
(Defendants’ interpretation).
                                                  31
is not considered because it did not exist. Here, this Court cannot ignore the

contract’s explicit language to determine if, and when, a breach can occur.

B.     FAILURE TO STATE A CLAIM161

       Defendant additionally argues that Plaintiff failed to state a claim pursuant to

Court of Chancery Rule 12(b)(6).162 The Court will not address this argument

because, without a claim ripe for judicial adjudication, the Court does not have

jurisdiction under the Declaratory Judgment Act.163 Because this action may yet

ripen into a justiciable controversy, the Court will not review the merits of any claims

at this time, pending future developments where Plaintiff may proceed under similar

claims.164




161
     The Court notes Plaintiff’s assertion in oral argument on October 27, 2023, that by
demonstrating Defendants’ failure to use commercially reasonable efforts—and consequently
stating a sufficient claim on all counts—it has proven that the claim is ripe for review. “If I can
allege a breach, then it should be ripe.” Id. at 49. This Court rejects that argument as circular and
instead finds that it is too soon to determine the case on the merits for the reasons detailed, and
therefore regardless of any well-pled allegations suggesting a potential for future claims of breach
of contract, the fact that the claims are not yet ripe precludes the Court from considering the merits.
162
    Ct. Ch. R. 12(b)(6).
163
    See, e.g., Tygon Peak Cap. Mgmt., LLC, 

, at *7 (“I address subject matter
jurisdiction first, as I can only substantively review the pleadings if I have jurisdiction to do so.”);
Stone Energy Corp., 

, at *6–7.
164
    See, e.g., Bebchuck, 

.
                                                  32
                            VI.    CONCLUSION

    In conclusion, Defendant’s Motion to Dismiss is GRANTED pursuant to Court

of Chancery Rule 12(b)(1). As such, Defendants’ Motion to Dismiss pursuant to

Court of Chancery Rule 12(b)(6) is moot.

            IT IS SO ORDERED.




                                      33