Trifecta Multimedia Holdings, Inc., et al. v. WCG Clinical Services LLC

In the Chancery Court of the State of Delaware, Trifecta Multimedia Holdings Inc. and Dave Young, Plaintiffs, V. WCG Clinical Services LLC, Defendants. )))))))))))) C. A. No. 2023-0699-jtl Opinion on Dimis' Motion to Dismiss Filed: February 7, 2024 Decision Date: June 10, 2024 Braden R. Arnstam, Roger S. Stronach, Holley E. Newell, Ross Aronst Am & amp; amp; amp; Moritz LLP, Wilmington, Delaware; David S. Flugman, Lauren J. Zimmerman, Korey Boehm, Selendy Gay Pullc, New York, New York; Plaintiffs Side lawyer. Susan V. Vaesko, Emily K. Friedman, Morris, Nichols, Arsht & amp; amp; amp; Tunnell LLP, Wilmington, Delaware; William K. Jackson, Ashley Moore Drake, Goodwin Procter LLP, Washington, County of Columbia; Ariel E. Rogers, Goodwin Procter LLP, Redwood City, California; Lauren E. Jackson, Goodwin Procter LLP, Boston, Massachusetts; defense counsel. A private capital portfolio company acquired a healthcare technology company. The healthcare company was The medical company offered to provide clinical trial services including its flagship product. The medical company believes that the portfolio company is its best partner for development, allowing the medical company to continue its business autonomously, and providing support to the medical company's sales and marketing. and marketing efforts and fraudulently deceived medical companies into entering into sales agreements. V. WCG Clinical Services LLC, Defendant. )))))))))))) C. A. No. 2023-0699-jtl Opinion on Dimis' Motion to Dismiss Filed: February 7, 2024 Decision Date: June 10, 2024 Braden R. Arnstam, Roger S. Stronach, Holley E. Newell, Ross Aronst Am & amp; amp; amp; Moritz LLP, Wilmington, Delaware; David S. Flugman, Lauren J. Zimmerman, Korey Boehm, Selendy Gay Pullc, New York, New York; Plaintiffs Side lawyer. Susan V. Vaesko, Emily K. Friedman, Morris, Nichols, Arsht & amp; amp; amp; Tunnell LLP, Wilmington, Delaware; William K. Jackson, Ashley Moore Drake, Goodwin Procter LLP, Washington, County of Columbia; Ariel E. Rogers, Goodwin Procter LLP, Redwood City, California; Lauren E. Jackson, Goodwin Procter LLP, Boston, Massachusetts; defense counsel. A private capital portfolio company acquired a healthcare technology company. The healthcare company was The medical company offered to provide clinical trial services including its flagship product. The medical company believes that the portfolio company is its best partner for development, allowing the medical company to continue its business autonomously, and providing support to the medical company's sales and marketing. In Delaware Chance Court, Trifecta Multimedia Holdings Inc. and Dave Young, Plaintiff, v. WCG, alleging that the company had fraudulently deceived medical companies into entering into sales contracts by facilitating their marketing efforts and by purportedly assisting them in such activities. Clinical Services LLC, Defendant. )))))))))))) C. A. No. 2023-0699-jtl Opinion on Dimis' Motion to Dismiss Filed: February 7, 2024 Decision Date: June 10, 2024 Braden R. Arnstam, Roger S. Stronach, Holley E. Newell, Ross Aronst Am & amp; amp; amp; Moritz LLP, Wilmington, Delaware; David S. Flugman, Lauren J. Zimmerman, Korey Boehm, Selendy Gay Pullc, New York, New York; Plaintiffs Side lawyer. Susan V. Vaesko, Emily K. Friedman, Morris, Nichols, Arsht & amp; amp; amp; Tunnell LLP, Wilmington, Delaware; William K. Jackson, Ashley Moore Drake, Goodwin Procter LLP, Washington, County of Columbia; Ariel E. Rogers, Goodwin Procter LLP, Redwood City, California; Lauren E. Jackson, Goodwin Procter LLP, Boston, Massachusetts; defense counsel. A private capital portfolio company acquired a healthcare technology company. The healthcare company was The medical company offered to provide clinical trial services including its flagship product. The medical company believes that the portfolio company is its best partner for development, allowing the medical company to continue its business autonomously, and providing support to the medical company's sales and marketing. and allegedly assisted in marketing efforts and fraudulently defrauded medical companies into entering into sales agreements by purporting to assist them.

The Portfolio Company refused to allow its sales staff to promote the product as an integrated solution. The Medical Company alleges that the Portfolio Company still hindered its ability to acquire new buyers and refused to provide critical resources to achieve the sensation. In fact, the Medical Company alleges that these were intentional influences aimed at ensuring that the control income characteristics were not achieved. The Medical Company claimed fraud, breach of implied agreement to act honestly and in good faith, breach of contract, and damages. The Portfolio Company has decided to dismiss all claims. This Opinion grants the motion to dismiss as to Count II and portions of Count I. I. Facts Case law is drawn from this claim and documents incorporated by reference therein. 1 At a given stage of a proceeding, the allegations in the claim are admitted as true and the Plaintiff benefits from all meaningful conclusions. A. Implementation Process Trifecta Multimedia LLC ("Trifecta" or the "Company") provided video-based online training for clinical researchers. Over time, the Company developed a product line for medical professionals called "Investigator Space."

EBITDA is $ 12 million and an annual growth rate exceeds 20 %. Nine out of 10 companies were interested in further discussions. CrossStree plans to make a competitive selection based on its high interest. CrossStree requested a survey on the quality of revenue and started presenting confidential information. B. When the Pandemic CrossStree was preparing for the sales process, the COVID-19 pandemic covered the United States. The company and cross tree have stopped selling the sales process. Pandemic caused an unprecedented problem for clinical trials, but the company had a unique opportunity to solve it. From March to June 2020, the company won 13 new customers, including major pharmaceutical companies. The company has increased 11 and 4 for one year. C. The two buyers of the two companies resumed in June 2020 contacted Young and Cross Tree and resumed negotiations. One of them was Advarra, Inc., and others were WCG Clinical Services LLC (WCG). Cross Breeze and Young presented to both companies. These presentations include (i) revenue based on contracts with existing companies, (ii) additional predictive earnings from existing customers, and (III) forecasts from future customers (hereinafter, "prediction"). Was included. According to the prediction, the profit in 2020 was $ 39. 895. 000 and the $ 48. 703. 000 in 2021 was $ 12 million, exceeding 20 %, with an annual growth rate of $ 12 million. Nine out of 10 companies were interested in further discussions. CrossStree plans to make a competitive selection based on its high interest. CrossStree requested a survey on the quality of revenue and started presenting confidential information. B. When the Pandemic CrossStree was preparing for the sales process, the COVID-19 pandemic covered the United States. The company and cross tree have stopped selling the sales process. Pandemic caused an unprecedented problem for clinical trials, but the company had a unique opportunity to solve it. From March to June 2020, the company won 13 new customers, including major pharmaceutical companies. The company has increased 11 and 4 for one year. C. The two buyers of the two companies resumed in June 2020 contacted Young and Cross Tree and resumed negotiations. One of them was Advarra, Inc., and others were WCG Clinical Services LLC (WCG). Cross Breeze and Young presented to both companies. These presentations include (i) revenue based on contracts with existing companies, (ii) additional predictive earnings from existing customers, and (III) forecasts from future customers (hereinafter, "prediction"). Was included. According to the forecast, the earnings of 2020 were $ 39. 895. 000 and $ 48. 703. 000 in 2021, the EBITDA was $ 12 million, with an annual growth rate of over 20 %. Nine out of 10 companies were interested in further discussions. CrossStree plans to make a competitive selection based on its high interest. CrossStree requested a survey on the quality of revenue and started presenting confidential information. B. When the Pandemic CrossStree was preparing for the sales process, the COVID-19 pandemic covered the United States. The company and cross tree have stopped selling the sales process. Pandemic caused an unprecedented problem for clinical trials, but the company had a unique opportunity to solve it. From March to June 2020, the company won 13 new customers, including major pharmaceutical companies. The company has increased 11 and 4 for one year. C. The two buyers of the two companies resumed in June 2020 contacted Young and Cross Tree and resumed negotiations. One of them was Advarra, Inc., and others were WCG Clinical Services LLC (WCG). Cross Breeze and Young presented to both companies. These presentations include (i) revenue based on contracts with existing companies, (ii) additional predictive earnings from existing customers, and (III) forecasts from future customers (hereinafter, "prediction"). Was included. According to the prediction, the profit in 2020 was assumed to be $ 39. 895. 000 and $ 48. 703. 000 in 2021.