Richards Layton & Finger
 

Chancery Appoints Liquidating Trustee to Assist With Windup

August 27, 2014

In Comerica Bank v. Global Payments Direct, C.A. No. 9707-CB (Del. Ch. Aug. 1, 2014), the Delaware Court of Chancery appointed a liquidating trustee to assist with and oversee the winding up of Global Payments Comerica Alliance LLC pursuant to Section 18-803(a) of the Delaware Limited Liability Company Act. Alliance was the entity through which Global Payments Direct Inc. processed credit and debit card transactions for Comerica Bank. The parties and sole members of Alliance, Comerica Bank and Global Direct disagreed on how to wind up Alliance. Comerica Bank claimed that Global Direct was intentionally delaying and inhibiting Alliance's winding up for its sole gain and as retribution for Comerica Bank's termination of its service agreement with Global Direct. Following a twoday trial, the court determined that Alliance had been properly dissolved and that the parties' exclusivity and noncompetition obligations regarding Alliance had ended. The court also agreed with Comerica Bank that Alliance could not be wound up without appointment of a liquidating trustee.