NAF Holdings, LLC v. Li & Fung (Trading) Ltd.

NAF filed suit against Trading for breach of contract and sought damages, alleging that Trading wrongfully repudiated the contract and that, as a consequence of the breach, NAF lost financing commitments provided by third parties and was unable to complete the acquisition of Hampton. On appeal, NAF challenged the district court's judgment in favor of Trading. The court certified the following question to the Supreme Court of the State of Delaware: Where the plaintiff has secured a contractual commitment of its contracting counterparty, the defendant, to render a benefit to a third party, and the counterparty breaches that commitment, may the promisee-plaintiff bring a direct suit against the promisor for damages suffered by the plaintiff resulting from the promisor’s breach, notwithstanding that (1) the third-party beneficiary of the contract is a corporation in which the plaintiff-promisee owns stock; and (ii) the plaintiff-promisee’s loss derives indirectly from the loss suffered by the third-party beneficiary corporation; or must the court grant the motion of the promisor-defendant to dismiss the suit on the theory that the plaintiff may enforce the contract only through a derivative action brought in the name of the third-party beneficiary corporation? View "NAF Holdings, LLC v. Li & Fung (Trading) Ltd." on Justia Law