IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
WORLD ENERGY, LLC, WORLD ENERGY )
LOS ANGELES, LLC, ALTAIR )
PARAMOUNT, LLC, and PARAMOUNT )
PIPELINE, LLC, )
)
Plaintiffs, )
v. ) C.A. No. 2025-0912-MTZ
)
AIR PRODUCTS AND CHEMICALS, INC., )
and AIR PRODUCTS MANUFACTURING )
LLC, )
)
Defendants. )
MEMORANDUM OPINION
Date Submitted: January 16, 2026
Date Decided: July 6, 2026
Lauren Dunkle Fortunato, Jason W. Rigby, Alyssa T. Atkisson McKeever, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, Delaware; Matthew G.
Mrkonic, Tucker R. Hunter, HONIGMAN LLP, Detroit, Michigan, Attorneys for Plaintiffs.
John L. Reed, Michael A. Carbonara, Jr., DLA PIPER LLP (US), Wilmington, Delaware; Steven M. Rosato, DLA PIPER LLP (US), New York, New York,
Attorneys for Defendants.
ZURN, Vice Chancellor.
Two major players in the alternative fuel industry teamed up to convert a gas
refinery to make renewable jet fuel. As in many ventures, one side was to do the
work, and the other side was to help pay for it. The payor did not pay, so the worker
did not work. The payor came to this Court seeking a mandatory injunction requiring
the worker to make repairs to the refinery. I denied the requested relief from the
bench, and promised a written explanation.1 This opinion provides that explanation,
and grants the defendants’ motion to dismiss.
I. BACKGROUND2
Plaintiffs World Energy, LLC (“WE LLC”), World Energy Los Angeles, LLC
(“WELA”), AltAir Paramount, LLC (“AltAir”), and Paramount Pipeline, LLC
(“Paramount Pipeline,” and together with WE LLC, WELA, and Alt Air, “World
Energy”) operate biodiesel manufacturing plants throughout the United States.3
World Energy is a pioneer in the production of sustainable aviation fuel.4 AltAir
owns and operates the Paramount, California-based fuel refinery at the center of this
1
D.I. 36; D.I. 37.
2
I draw the following facts from the Verified Complaint, and the documents attached to or integral to it. See Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del. 2004). Citations in the form “Carbonara Aff.” refer to the affidavit of Michael A. Carbonara, Jr., available at D.I. 24. Citations in the form of “Hr’g Tr. —” refer to the transcript for the oral argument on the motions, available at D.I. 38. 3
D.I. 1 [hereinafter “Compl.”] ¶ 46.
4
Id. ¶ 62.
2
action (the “Paramount Facility”).5 In March 2018, World Energy acquired AltAir
and the Paramount Facility with the aim of converting it from a petroleum refinery
into “one of the most innovative and largest [sustainable] fuel refineries in the
world.”6
World Energy needed a hydrogen supplier for the Paramount Facility. 7 In
2019, it entered into a supply agreement with defendant Air Products and Chemicals,
Inc. (“APC,” and together with defendant Air Products Manufacturing LLC “Air
Products”), a global industrial gases supplier and leader in energy transition.8
World Energy and Air Products saw additional opportunity to develop the
Paramount Facility together.9 In March 2020, AltAir and Air Products entered into
an agreement by which Air Products would “optimize existing Paramount Facility
operations” on what would be called “Plant A,” and “design, engineer, and construct
certain expansions” on what would be called “Plant B.”10 The project got off to a
rough start, with delays and cost overruns continuing well into 2023.11 World
5
Id. ¶¶ 48–52.
6
Id.
7
Id. ¶¶ 55–57.
8
Id. ¶¶ 47, 58–61, Ex. 10.
9
Compl. ¶¶ 62–66.
10
Id. ¶¶ 69, 70, Ex. 3.
11
Compl. ¶¶ 79–92.
3
Energy alleges Air Products had overstated its expertise, and blames Air Products
for those issues.12
Yet World Energy opted to entrust Air Products with more responsibility. In
early 2023, the parties began exploring a path for World Energy to sell the Plant A
assets and “hand over daily operations” at the Paramount Facility to Air Products.13
On November 14, the parties executed a suite of agreements to that effect.14 The
Master Project Agreement and the Credit Agreement are central to this action.
A. The Master Project Agreement And Credit Agreement
The Master Project Agreement amended and restated the 2020 agreement in
its entirety.15 Air Products would perform optimization and expansion work on Plant
A and Plant B.16 Air Products was also required to “use commercially reasonable
efforts to cooperate with World Energy, as reasonably requested by World Energy,”
to “assist World Energy to secure working capital finance.”17
World Energy would help pay for Air Products’ work through two monthly
payments: (1) a monthly operating fee (the “MOF”), consisting of Air Products’
12
Id.
13
Id. ¶¶ 93–94.
14
Id. ¶¶ 94–98.
15
Compl. Ex. 1 [hereinafter “Master Project Agreement”] at 1.
16
Id. §§ 2.1–2.2.
17
Id. § 32.15.
4
“actual out-of-pocket costs and expenses”; and (2) a monthly fixed fee (the “MFF”),
representing a fixed “rate of return of 4.5% on the asset acquisition cost and other
capitalized costs.”18 Both payment obligations began accruing as soon as Air
Products began its work on Plant A.19 Both payments were due within thirty days
of receiving an invoice at the beginning of each month.20 World Energy was entitled
to dispute invoiced amounts in good faith within one year of the invoice date, but
had to pay any undisputed amount within thirty days of the invoice.21 While World
Energy could “dispute proposed adjustments and calculations,” it could not
“otherwise challenge the obligation to pay the MFF.”22 In the event of a dispute,
World Energy was required to “set forth the basis for its dispute” and provide
“supporting documentation with respect to the amount disputed.” 23
The monthly payments were material to the Master Project Agreement.
Section 8.2(B) expressly conditioned Air Products’ performance on timely payments
of all undisputed MOF and MFF invoice amounts.24 If World Energy failed to pay
18
Compl. ¶ 103; Master Project Agreement §§ 8.1, 9.2, 9.3, 9.5, Attachment B, Attachment K.
19
Master Project Agreement §§ 9.3, 9.5.
20
Id. § 8.1.
21
Id. § 8.2(A).
22
Id.
23
Id.
24
Id. § 8.2(B).
5
those undisputed amounts within fifteen days of their due date, Air Products was
entitled to suspend performance upon providing forty-five days’ written notice.25
And if World Energy failed to remedy a missed MFF payment within ninety days of
receiving that written notice, it would be deemed in “Material Breach.”26
Under Section 18.1(B), “[i]f a non-breaching Party believes that the other
Party is in Material Breach,” it must “promptly notify the other Party in writing, and
in reasonable detail, of the substance of, and basis for, its belief that a Material
Breach . . . has occurred.”27 If a Material Breach remained unremedied throughout
the applicable notice and cure period, the non-breaching party could then
“immediately terminate” the Master Project Agreement upon providing a
termination notice.28 Under Section 18.2, the parties must also provide written
notice of, and an opportunity to cure, any “Ordinary Breach.”29
Under the Credit Agreement, Air Products also agreed to loan World Energy
up to $270 million.30 The principal amount was split up into two tranches: $180
25
Id.
26
Id. §§ 18.1(A)–(i).
27
Id. § 18.1(B).
28
Id.
29
Id. § 18.2.
30
See Compl. Ex. 6 [hereinafter “Credit Agreement”].
6
million upon closing of the Credit Agreement and $90 million in January 2024.31
World Energy received the loan in full.32
The interest rate on the loan “[p]rior to the Plant B Commencement Date” was
set at 15%.33 Interest payments were due on the last day of each calendar month.34
Nonpayment, coupled with a failure to remedy the default within three business
days, constituted an “Event of Default.”35 Per Section 8, upon an Event of Default,
Air Products was entitled to terminate its commitments and “declare the Loans then
outstanding to be due and payable in whole,” with the aggregate principal, accrued
interest, and other fees “automatically [] due and payable, without presentment,
demand, protest or other notice of any kind.”36
31
Id. §§ 2.1(a)–(b).
32
See Carbonara Aff. Ex. B [hereinafter “Forbearance Agreement”] § 1.02(b) (“As of July 2, 2024, (i) the aggregate principal amount of Loans outstanding under the Credit Agreement was not less than $270,000,000 (which amount does not include fees, expenses, interest, or other amounts chargeable or otherwise reimbursable under the Loan Documents) . . . .”).
33
Credit Agreement §§ 1.1, 2.10(a).
34
Id. §§ 1.1, 2.10(c).
35
Id. § 8(b).
36
Id. § 8.
7
B. World Energy Defaults; The Parties Execute a Forbearance
Agreement.
World Energy defaulted immediately and repeatedly. The parties
memorialized that reality in a Forbearance Agreement dated July 10, 2024.37 World
Energy “acknowledge[d] and agree[d]” that it had breached its payment obligations
under both the Master Project Agreement and the Credit Agreement since November
2023, and that it would likely remain in default through September 2024.38 As of
July 2024, World Energy’s missed payments totaled nearly $19 million.39 World
Energy also acknowledged that Air Products had “fully and timely performed all of
[its] obligations and duties under the Agreements . . . and ha[d] acted reasonably and
in good faith under the circumstances.”40
“In reliance upon” those acknowledgements, Air Products agreed to “forbear
from exercising any rights or remedies that it may have against [World Energy] or
[its] respective assets and properties, in each case solely as a result of the occurrence
of the Specified Defaults,” until September 30, 2024.41
37
See Forbearance Agreement.
38
Id. §§ 1.01(b)–(c).
39
Id. §§ 1.02(b), (d).
40
Id. § 1.03.
41
Id. §§ 2.01, 2.03(g).
8
C. Activist Investors Target Air Products, And The Parties Execute The
Second Amendment To The Credit Agreement.
In mid-2024, Air Products became the target of activist investor campaigns.42
One campaign assailed the World Energy project as “Exhibit A” of Air Products’
mismanagement.43 Air Products focused on monetizing that project.44 It pushed for
an amendment to the Credit Agreement that would change certain provisions
governing the disposition and distribution of assets.45 According to the Complaint,
Air Products threatened to “stop working with World Energy to obtain working
capital financing,”46 and promised to provide another forbearance agreement if
World Energy executed the Second Amendment.47
The parties executed the Second Amendment to the Credit Agreement on
September 30, 2024.48 It recites that “the Borrower [i.e., AltAir] has requested that
[Air Products] amend certain provisions of the Credit Agreement.”49 The parties did
not enter into another forbearance agreement.50
42
Compl. ¶ 144; see also id. Ex. 9.
43
Compl. ¶ 165.
44
Id. ¶ 146.
45
Id. ¶¶ 147–50; Carbonara Aff. Ex. C.
46
Compl. ¶¶ 151–53.
47
Id. ¶ 156.
48
Id. ¶ 154; Carbonara Aff. Ex. C.
49
Carbonara Aff. Ex. C at 1.
50
Compl. ¶ 156.
9
D. World Energy Continues To Default; Air Products Exercises Its
Remedies.
World Energy remained in default after the forbearance period. Between
October 2024 and February 2025, Air Products sent World Energy nine default
notices pursuant to the Master Project Agreement, and six default notices pursuant
to the Credit Agreement.51 The Master Project Agreement notices explained that
World Energy had not provided any grounds to dispute the invoiced amounts, that
Air Products was entitled to suspend performance after forty-five days, and that Air
Products was entitled to terminate the Master Project Agreement after ninety.52 The
Credit Agreement notices explained that Air Products “expressly reserve[d] the
right” to exercise any and all remedies available under the Credit Agreement “at any
time.”53
In late January 2025, a new slate of directors was elected to Air Products’
board.54 The new leadership commanded a shift away from energy transition
projects.55 In early February, Air Products told World Energy it was not going
forward with the Plant A optimization work.56 On February 24, Air Products
51
See Carbonara Aff. Exs. G–U.
52
Carbonara Aff. Exs. G–O.
53
Carbonara Aff. Exs. P–U.
54
Compl. ¶ 163.
55
Id. ¶¶ 163–69.
56
Id. ¶¶ 170–72.
10
publicly announced the termination of three energy transition projects, including the
World Energy project.57 The same day, Air Products sent World Energy written
notice that it was terminating the Master Project Agreement, effective
immediately.58 The termination notice explained that World Energy’s MFF defaults
constituted “a Material Breach under Section 18.1(A)(i),” and entitled Air Products
to terminate the Master Project Agreement under Section 18.1(B)(i).59
Later that week, the parties elected to move forward with a planned “February
2025 turnaround” so that Air Products could “hand back the keys” to World
Energy.60 World Energy claims Air Products promised as part of that turnaround
work to repair the “12-D Rack,” a “support rack that holds up utility lines” necessary
for Plant A’s operations.61 Air Products and its subcontractor “completed the
necessary pre-work for the 12-D Rack repair,” including the removal of external
bracing and scaffolding.62 But Air Products did not complete the repair.63 The 12-57
Id. ¶ 167.
58
Id. ¶ 173; see Carbonara Aff. Ex. V.
59
Carbonara Aff. Ex. V at 1.
60
Compl. ¶ 176–77.
61
Id. ¶¶ 178, 179.
62
Id. ¶ 186.
63
Id. ¶ 187.
11
D Rack sits unusable, rendering the Paramount Facility’s only “continuously-active”
environmental remediation system inoperable.64
On March 26, over a month after Air Products’ termination notice, World
Energy sent two letters challenging the termination.65 The first claimed the “sole
purported ground” for termination—the MFF payments—was invalid because the
payments were “the subject of a good faith dispute by World Energy and therefore
[we]re not due.”66 It also claimed Air Products, not World Energy, “Materially
Breached the [Master Project Agreement] and, through its own wrongful conduct,
prevented World Energy from being able to pay the [MFF].”67 The letter demanded
that “Air Products immediately withdraw its repudiation and improper termination
of the [Master Project Agreement] and confirm in writing that it will comply with
all of its contractual obligations.”68
World Energy also sent Air Products a formal notice of breach of the Master
Project Agreement.69 The notice advised of: (1) a material breach of Section 2.1(D)
by failing to complete and fund, and then by repudiating, the Paramount Facility
64
Id. ¶¶ 190–91.
65
Compl. ¶ 193, Ex. 12; Carbonara Aff. Ex. X.
66
Carbonara Aff. Ex. X at 2.
67
Id.
68
Id. at 3–4.
69
See Compl. Ex. 12.
12
expansion project; (2) an ordinary breach of Sections 2.2, 2.3, 4.1, and 16.1 by failing
to comply with “specific obligations related to the [w]ork”; and (3) an ordinary
breach of Section 32.15 by failing to assist World Energy in securing working
capital, as reasonably requested.70 The notice repeated World Energy’s demand that
Air Products immediately withdraw termination and perform.71
Air Products responded on March 31.72 It raised World Energy’s failure to
meet its financial commitments, properly dispute the MFF invoiced amounts, or
provide notice of any breach prior to termination.73 It maintained the termination
was valid because “[f]or some time, Air Products has been the only party performing
under the [Master Project] Agreement.”74 That same day, Air Products also sent
written notice that it was accelerating all amounts due under the Credit Agreement.75
Air Products demanded immediate payment of $313,568,095.01.76 World Energy
refused to pay.77
70
Id.
71
Id. at 4.
72
See Carbonara Aff. Ex. Y.
73
Id.
74
Id. at 4.
75
See Carbonara Aff. Ex. Z.
76
Id. at 2.
77
Compl. ¶ 175.
13
E. Air Products Files Suit In New York.
On April 29, Air Products filed a motion for summary judgment in lieu of
complaint against World Energy in New York state court.78 The motion sought a
$312 million judgment under a guaranty agreement (the “Guaranty”), in which WE
LLC irrevocably and unconditionally guaranteed all payments owed by AltAir under
the Credit Agreement.79 Both the Credit Agreement and the Guaranty contain New
York forum selection and choice of law provisions.80
On September 19, 2025, the New York court granted the motion in its
entirety.81 Relevant here, the court rejected World Energy’s argument that “the
applicable interest rate was 4.5%, not 15%” under the Credit Agreement.82
Specifically, it concluded “the Credit Agreement unambiguously sets the
‘Applicable Rate’ at 15% and permits modifications only through a signed
writing.”83
78
Id. ¶ 203.
79
Id. ¶ 204; see Carbonara Aff. Ex. A [hereinafter “Guaranty”] § 1.
80
Credit Agreement § 10.9; Guaranty § 13.9.
81
See Air Prods. & Chems., Inc. v. World Energy, LLC, 2025 WL 2682969, at *4 (N.Y. Sup. Ct. Sept. 19, 2025).
82
Id. at *3.
83
Id.
14
World Energy appealed. On April 9, 2026, the Appellate Division affirmed
the judgment below.84 On May 11, World Energy moved for leave to further appeal
the judgment to the Court of Appeals of the State of New York.85
F. This Litigation
On August 8, 2025, World Energy filed a Verified Complaint (the
“Complaint”), along with a motion for preliminary injunction.86 Counts I and II are
breach of contract claims seeking specific performance of the Master Project
Agreement. Both counts also seek preliminary and permanent injunctive relief
requiring Air Products to “restore and maintain the status quo operations of the
Paramount facility,” with a focus on restoring the 12-D Rack to operation.87
Count III alleges a breach of the implied covenant of good faith and fair
dealing. Count IV alleges mutual mistake and seeks reformation of the Credit
Agreement, particularly its 15% interest rate before the Plant B Commencement
Date. Count V alleges Air Products fraudulently induced World Energy into
executing the Second Amendment. Count VI seeks a declaration that World Energy
has not breached any of its agreements with Air Products, that Air Products’ default
84
D.I. 40; D.I. 41; see Air Prods. & Chems., Inc. v. World Energy, LLC, 256 N.Y.S.3d 17 (N.Y. App. Div. 2026).
85
D.I. 41.
86
D.I. 1.
87
Compl. ¶¶ 226, 235.
15
and termination notices are invalid, and that Air Products is not entitled to relief for
World Energy’s breaches. Count VII asserts a claim for promissory and equitable
estoppel.
Air Products moved to dismiss the Complaint on September 2, 2025. 88 The
parties briefed the motion for preliminary injunction and motion to dismiss by
November 18.89 I heard oral argument on January 16, 2026.90 I denied the motion
for preliminary injunction from the bench, with a promise to provide a subsequent
explanation, and took the motion to dismiss under advisement the same day.91
II. ANALYSIS
World Energy seeks relief for breach of contract, including a mandatory
injunction requiring Air Products to fix the 12-D Rack and perform other work at
the Paramount Facility.92 To obtain that extraordinary and final relief, World Energy
must state a claim for breach of contract, then prevail on its merits as a matter of law
on undisputed facts.93 World Energy has done neither. Air Products properly
88
D.I. 16.
89
D.I. 17; D.I. 19; D.I. 24; D.I. 27; D.I. 29.
90
D.I. 37; see Hr’g Tr.
91
D.I. 36; D.I. 37.
92
See Compl. at Prayer for Relief.
93
See Alpha Nat. Res., Inc. v. Cliff’s Nat. Res., Inc., 2008 WL 4951060, at *2 (Del. Ch. Nov. 6, 2008) (“[Granting a mandatory injunction] requires, in addition, a showing that the petitioner is entitled as a matter of law to the relief it seeks based on undisputed facts.”); C & J Energy Servs., Inc. v. City of Miami Gen. Empls., 107 A.3d 1049, 1053–54 (Del. Ch.
16
terminated the Master Project Agreement after World Energy repeatedly breached
it. World Energy’s breaches were unjustified and unexcused. World Energy has not
pled a claim for breach of contract that can support mandatory injunctive relief.
A. Merits
The pleading standards under Delaware law are “minimal.”94 On a motion to
dismiss under Rule 12(b)(6), the Court must “accept all well-pleaded factual
allegations in the complaint as true, accept even vague allegations in the complaint
as well-pleaded if they provide the defendant notice of the claim, [and] draw all
reasonable inferences in favor of the plaintiff.”95 The Court will grant a Rule
12(b)(6) motion if the “plaintiff could not recover under any reasonably conceivable
set of circumstances susceptible of proof.”96 The Court need not “accept as true
conclusory allegations without specific supporting factual allegations.”97 The Court
2014) (“To issue a mandatory injunction requiring a party to take affirmative action . . . the Court of Chancery must either hold a trial and make findings of fact, or base an injunction solely on undisputed facts.”).
94
Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531, 536 (Del. 2011).
95
Id.
96
Id.
97
In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006) (internal quotation marks and citations omitted).
17
is not “required to accept every strained interpretation of the allegations proposed
by the plaintiff.”98
1. Breach of Contract
The elements of a claim for breach of contract are familiar: “(i) a contractual
obligation, (ii) a breach of that obligation by the defendant, and (iii) a causally
related injury that warrants a remedy, such as damages or in an appropriate case,
specific performance.”99 No path to recovery is available unless the plaintiff
“demonstrate[s] that it substantially complied with all of the provisions of the
contract.”100
World Energy did not substantially comply with its obligations under the
Master Project Agreement. World Energy’s primary obligation was to pay the MOF
98
Malpiede v. Townson, 780 A.2d 1075, 1083 (Del. 2001).
99
AB Stable VIII LLC v. MAPS Hotels & Resorts One LLC, 2020 WL 7024929, at *47 (Del. Ch. Nov. 30, 2020), aff’d, 268 A.3d 198 (Del. 2021).
100
Preferred Inv. Servs., Inc. v. T & H Bail Bonds, Inc., 2013 WL 3934992, at *10 (Del. Ch. July 24, 2013) (citing Commonwealth Constr. Co. v. Cornerstone Fellowship Baptist Church, Inc., 2006 WL 2567916, at *19 (Del. Super. Aug. 31, 2006)), aff’d sub nom. Preferred Inv. Servs., Inc. v. T & H Bail Bond, Inc., 108 A.3d 1225 (Del. 2015); see AQSR India Private, Ltd. v. Bureau Veritas Hldgs., Inc., 2009 WL 1707910, at *7 (Del. Ch. June 16, 2009) (“It is a basic principle of contract law, however, that to be entitled to specific performance, which is an equitable remedy that rests in the discretion of the court, the party seeking specific performance must have substantially performed under the contract herself.” (citations omitted)); CLP Toxicology, Inc. v. Casla Bio Hldgs. LLC, 2021 WL 2588905, at *12 (Del. Ch. June 14, 2021) (“To recover for damages, the plaintiff must demonstrate that he substantially complied with all provisions of the contract.” (citing Shah v. Am. Sols., Inc., 2012 WL 1413593, at *2 (Del. Super. Mar. 8, 2012)).
18
and MFF.101 World Energy repeatedly failed to do so. By its own “free[] and
voluntar[y]” acknowledgement in the Forbearance Agreement, World Energy
breached the Master Project Agreement by “fail[ing] to pay in full the MFF
payments due April 10, 2024, May 1, 2024, May 31, 2024, and July 1, 2024.”102
And in that same agreement, World Energy warned of anticipated future breaches.103
That warning came true; the record shows World Energy continued to breach its
payment obligations every month between October 2024 and February 2025.104
World Energy does not plead, and the record does not suggest, that it cured those
breaches at any point.
World Energy responds by invoking the prevention doctrine, arguing its
nonperformance is excused because Air Products engaged in conduct that prevented
it from making timely payments: specifically, that Air Products did not do the work
necessary to make the Paramount Facility profitable.105 It is well settled that “the
failure of a plaintiff to have performed his own obligation will be excused if he was
101
Master Project Agreement §§ 8.1, 9.2, 9.3, 9.5.
102
Forbearance Agreement §§ 1.01(b)(ii), 3.01.
103
Id. § 1.01(c)(i).
104
Carbonara Aff. Exs. G–O.
105
See D.I. 27 at 11–12 (“[I]f Air Products had fulfilled its obligations to optimize and operate the facility’s production operations, it is undisputed that those operations would have generated millions of dollars of free cash flow . . . .”).
19
prevented by the other party from performing his obligation.”106 “[T]he doctrine is
based on the long-established principle of law that a party should not be able to take
advantage of its own wrongful act.”107 For the doctrine to apply, World Energy must
show that Air Products’ conduct “contributed materially” to World Energy’s
defaults.108 But if the defaults would have occurred “regardless of the lack of
cooperation, the failure of performance did not contribute materially . . . and the rule
does not apply.”109
For defaults before September 30, 2024, the Forbearance Agreement is fatal
to World Energy’s argument.110 There, World Energy acknowledged that Air
106
Wells v. Lee Builders, Inc., 99 A.2d 620, 621 (Del. 1953) (citations omitted); see also WaveDivision Hldgs., LLC v. Millennium Digital Media Sys., L.L.C., 2010 WL 3706624, at *14 (Del. Ch. Sept. 17, 2010) (“It is an established principle of contract law that ‘[w]here a party’s breach by nonperformance contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused.’” (quoting Restatement (Second) of Contracts § 245 (1981))); Mobile Commc’ns Corp. of Am. v. MCI Commc’ns Corp., 1985 WL 11574, at *4 (Del. Ch. Aug. 27, 1985) (“[A] party may not escape contractual liability by reliance upon the failure of a condition precedent where the party wrongfully prevented performance of that condition precedent.”).
107
13 Richard A. Lord, Williston on Contracts § 39:6 (4th ed. 2024).
108
See Snow Phipps Gp., LLC v. KCAKE Acq., Inc., 2021 WL 1714202, at *52 (Del. Ch. Apr. 30, 2021).
109
In re Anthem-Cigna Merger Litig., 2020 WL 5106556, at *90 (Del. Ch. Aug. 31, 2020) (internal quotation marks omitted) (quoting Restatement (Second) of Contracts § 245 cmt. b (1981)).
110
The Forbearance Agreement is governed by New York law. See Forbearance Agreement § 6.03. World Energy asserts that under New York law, the Forbearance Agreement’s “admission of liability” does not bar its claims or defenses. D.I. 34; see Berkshire Bank v. Fawer, 130 N.Y.S.3d 666, 666 (N.Y. App. Div. 2020). That does not mean the fact of the Forbearance Agreement and its contractual acknowledgements are
20
Products “fully and timely performed all of [its] obligations and duties under the
Agreements . . . and ha[d] acted reasonably and in good faith under the
circumstances.”111 That unambiguous language forecloses the conclusion that Air
Products interfered wrongfully or in bad faith with World Energy’s ability to pay.
Wells v. Lee Builders, Inc. is instructive.112 There, a buyer sought specific
performance of a land sale contract, even though he was required to move a house
off the parcel before closing and had not done so.113 The buyer argued his
nonperformance should be excused because the sellers had prevented the buyer from
moving the house.114 The Delaware Supreme Court concluded any prevention of the
buyer’s performance by the seller “was made immaterial by” an intervening
agreement.115 The agreement contained a “recital of fact” that “certain unforeseen
difficulties have caused unavoidable delays in the fulfillment by both the sellers and
the buyer of their respective obligations.”116 Its effect “was to wipe out . . . any
action on [the sellers’] part which tended to prevent performance by the plaintiff of
irrelevant to this Court’s analysis of a claim for breach of a contract governed by Delaware law.
111
Forbearance Agreement § 1.03.
112
99 A.2d 620, 621–25 (Del. 1953).
113
Id. at 621.
114
Id.
115
Id. at 622.
116
Id.
21
its obligation.”117 Here, as in Wells, the Forbearance Agreement “wipe[s] out” any
alleged breach or bad faith conduct by Air Products that would excuse World
Energy’s nonperformance.118 And World Energy is “precluded” by its own factual
recitals “from contending to the contrary.”119
That leaves Air Products’ conduct after September 30, 2024, until Air
Products terminated the Master Project Agreement.120 World Energy’s primary
argument is that Air Products “starve[d] World Energy of revenue that [it] needed”
to make its monthly payments, and then, having breached the contract itself,
improperly repudiated its obligations.121
First, it contends Air Products breached by failing to complete the “2024 Plant
A Expansion Shutdown”—which is how the Master Project Agreement labels the
overall Plant A expansion work—by the end of 2024.122 But nothing in the contract
mandates that deadline. World Energy relies entirely on the “2024” in the defined
term to infer a December 31, 2024 deadline. But the Master Project Agreement
explicitly states “that Air Products is not providing any schedule guarantee for the
117
Id.
118
Id.
119
Id.
120
See D.I. 34 at 3 (arguing “World Energy’s requested relief is entirely supported by Air Products’ post-[forbearance] conduct”).
121
D.I. 27 at 11.
122
Id. at 8–9.
22
completion of the Work or any component thereof in th[e] Agreement or
otherwise.”123 That specific language controls.124
More fundamentally, World Energy’s payment obligations were not tied to
the fruits of Air Products’ work.125 The obligations arose as soon as World Energy
began working on Plant A, without regard to any operational milestones.126 If the
123
Master Project Agreement § 2.2(B). The 2024 Plant A Expansion Shutdown is a component of Air Products’ “Work.” The Master Project Agreement defines “Work” to include the “Construction . . . of the Plant A Expansion Assets.” Id. § 1.1. The term “Construction” is defined to “includ[e] the completion of the 2024 Plant A Expansion Shutdown.” Id.; see also Compl. ¶ 101.
124
See DCV Hldgs., Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005)
(“Specific language in a contract controls over general language, and where specific and general provisions conflict, the specific provision ordinarily qualifies the meaning of the general one.” (citations omitted)).
125
See, e.g., Desktop Metal, Inc. v. Nano Dimension Ltd., 2025 WL 904521, at *37 (Del. Ch. Mar. 24, 2025) (finding the prevention doctrine applicable where a party to a merger agreement “delay[ed] CFIUS approval in breach of the Merger Agreement”); Murphy Marine Servs. of Del., Inc. v. GT USA Wilm., LLC, 2022 WL 4296495, at *12 (Del. Ch. Sept. 19, 2022) (“If GT’s performance was conditioned upon KPMG issuing a formal valuation, GT was obliged not to interfere with the exercise of KPMG’s discretion in reaching that valuation[.]”).
126
See Master Project Agreement §§ 9.2 (“The MFF shall be determined as follows, irrespective of the amount of Products produced by the Expansion Assets . . . .”); see id. §§ 9.3(A), 9.5 (providing that the MOF and MFF payments shall commence “on the Plant A Commencement Date”).
The Master Project Agreement excused MFF payments in two scenarios: (1) upon the occurrence of a “MFF Deferral Event” which, by definition, must “occur[] after the completion of the 2024 Plant A Expansion Shutdown”; and (2) upon a “Material Breach” by Air Products, followed by its failure to cure the breach within sixty days of receiving a default notice. Master Project Agreement §§ 1.1, 18.1(A)(iii). Neither scenario applied to World Energy. The first did not apply because the 2024 Plant A Expansion Shutdown had not yet been completed. The second did not apply because World Energy did not provide Air Products notice or an opportunity to cure any purported breaches, as required by Section 18.1(A)(iii).
23
parties intended for World Energy to owe payments only after Plant A’s expansion
work was complete or only after the work yielded a certain level of cash flow, they
could have said so in the contract.127 They did not. They agreed to monthly
payments untethered to performance or profit. And World Energy defaulted the very
first month any such payment was owed.128
From there, World Energy argues Air Products breached its obligation to
assist with working capital financing.129 That contention is not supported by the
Complaint or the record. World Energy does not plead or identify a single instance
after the forbearance period where it “requested,” but failed to receive, Air Products’
assistance in securing capital.130
127
World Energy alleges the parties had discussed and understood “that World Energy’s payment obligations would only kick in after Air Products completed the Plant A optimization work, thereby creating the value and additional cash flow necessary for World Energy to make interest payments.” Compl. ¶ 130; see also id. ¶¶ 9, 95. That is not what the contract says. See Master Project Agreement §§ 9.2, 9.3, 9.5. “It is well-established that ‘[if] a contract is unambiguous, extrinsic evidence may not be used to interpret the intent of the parties, to vary the terms of the contract or to create an ambiguity.’” ITG Brands, LLC v. Reynolds Am., Inc., 2019 WL 4593495, at *12 (Del. Ch. Sept. 23, 2019) (quoting Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997)).
128
Forbearance Agreement §§ 1.01(b)(i)–(ii).
129
D.I. 27 at 11.
130
Master Project Agreement § 32.15 (Air Products shall use commercially reasonable efforts to cooperate with World Energy, as reasonably requested by World Energy, in order to assist World Energy to secure working capital finance, subject to the limitations and restrictions set forth in the New Credit Facility and this Agreement.”).
24
World Energy’s next argument to avoid the consequences of its breaches
relates to the contractual mechanics of termination. Section 8.2(B) of the Master
Project Agreement provides that “except with respect to payments that are the
subject of good faith disputes[,]” Air Products was entitled to suspend performance
if a default remained unremedied for fifteen days after the payment due date, subject
to forty-five days’ written notice.131 Air Products sent five written “Notice[s] of
Potential Air Products Suspension” for every missed MFF payment between October
2024 and February 2025.132 Each of those missed payments, and failure to cure
within ninety days, put World Energy in “Material Breach.”133 Under Section
18.1(B)(i), Air Products was then entitled to “immediately terminate” the Master
Project Agreement upon providing a termination notice.134 It did so on February 24,
2025.135
World Energy presses that none of the missed MFF payments triggered a
termination right because they were never “due” in the first place: World Energy
contends they were “the subject of a good faith dispute.”136 Not so. The contract
131
Id. § 8.2(B).
132
See Carbonara Aff. Exs. G, H, J, L, N.
133
Master Project Agreement § 18.1(A)(i).
134
Id. § 18.1(B)(i).
135
Carbonara Aff. Ex. V.
136
See Carbonara Aff. Ex. X at 3.
25
permits World Energy to challenge only “proposed adjustments and calculations,”
and not “the obligation to pay the MFF” itself.137 To raise that challenge, it must
offer “supporting documentation with respect to the amount disputed.”138 And it
must pay any “non-disputed” amounts on time, pending resolution of the purported
dispute.139 World Energy did not follow those procedures before termination. World
Energy did not make any cognizable challenge as to “proposed adjustments and
calculations,” backed up by supporting documentation, and certainly did not identify
and pay any undisputed amount.140 A bare assertion at this point that the payments
“[we]re not ‘due’” because of “a good faith dispute” does no work for World
Energy.141 Air Products was entitled to suspend performance and terminate the
Master Project Agreement.142
Air Products’ performance under the Master Project Agreement was
unambiguously conditioned on receiving monthly payments from World Energy.143
137
Master Project Agreement § 8.2(A).
138
Id.
Id. (“World Energy will pay the non-disputed invoice by the original due date . . . and 139
may withhold payment of the disputed invoice amount pending resolution.”). 140
Id.
141
Carbonara Aff. Ex. X at 3. World Energy is correct that under Section 8.2(A), it was entitled to dispute an invoice “within the period of one year of the date of the invoice.” Master Project Agreement § 8.2(A).
142
See Master Project Agreement §§ 8.2(B), 18.1(B)(i).
143
Id. § 8.2(B).
26
World Energy failed to make those payments. And it failed to plead any
circumstances excusing its defaults. Counts I and II are dismissed.
It follows that Count VI, which seeks a declaration that World Energy has not
breached any of the relevant agreements and is entitled to have Air Products’
termination withdrawn, fails as well. Count VI is dismissed.
2. Breach Of The Implied Covenant
Count III asserts a claim for breach of the implied covenant of good faith and
fair dealing. The implied covenant “inheres in every contract and requires a party
in a contractual relationship to refrain from arbitrary or unreasonable conduct which
has the effect of preventing the other party . . . from receiving the fruits of the
bargain.144 “To state a claim for breach of the implied covenant, [a plaintiff] ‘must
allege a specific implied contractual obligation, a breach of that obligation by the
defendant, and resulting damage to the plaintiff.’”145 “General allegations of bad
faith conduct are not sufficient.”146
144
Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 888 (Del. Ch. 2009) (internal quotation marks omitted) (quoting Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 442 (Del. 2005)); see also Nemec v. Shrader, 991 A.2d 1120, 1126 (Del. 2010) (“We will only imply contract terms when the party asserting the implied covenant proves that the other party has acted arbitrarily or unreasonably, thereby frustrating the fruits of the bargain that the asserting party reasonably expected.” (citation omitted)).
145
Wiggs v. Summit Midstream P’rs, LLC, 2013 WL 1286180, at *9 (Del. Ch. Mar. 28, 2013) (quoting Cantor Fitzgerald, L.P. v. Cantor, 1998 WL 842316, at *1 (Del. Ch. Nov. 10, 1998)).
146
Kuroda, 971 A.2d at 888.
27
The implied covenant’s “gap-filling power is a limited and extraordinary
remedy,” and wielding it is a “cautious enterprise.”147 It “cannot be invoked to
override express provisions of a contract”148 or “contradict[] a clear exercise of an
express contractual right.”149 It cannot be used to “create a free-floating duty
unattached to the underlying legal documents.”150 As such, a party invoking the
implied covenant must plead a “gap” in the relevant agreement.151 That gap must
reflect “developments that could not be anticipated, not developments that the parties
simply failed to consider” at the time of contracting.152 There is no gap to fill “when
the contract addresses the conduct at issue.”153
147
Johnson & Johnson v. Fortis Advisors LLC, 352 A.3d 229, 254 (Del. 2026) (internal quotation marks omitted) (citing Nemec, 991 A.2d at 1125, 1128, and then Oxbow Carbon & Mins. Hldgs., Inc. v. Crestview-Oxbow Acq., LLC, 202 A.3d 482, 507 (Del. 2019)). 148
Kuroda, 971 A.2d at 888.
149
Nemec, 991 A.2d at 1127.
150
Dunlap, 878 A.2d 434, 441 (Del. 2005) (alterations, footnote, and internal quotation marks omitted) (compiling sources and quoting Glenfed Fin. Corp., Com. Fin. Div. v. Penick Corp., 647 A.2d 852, 858 (N.J. Super. Ct. App. Div. 1994)).
151
See Johnson & Johnson, 352 A.3d at 256 (“The covenant applies only where there is a genuine contractual gap about a truly unanticipated development . . . .” (citations omitted)); Allen v. El Paso Pipeline GP Co., L.L.C., 113 A.3d 167, 183 (Del. Ch. 2014) (“When presented with an implied covenant claim, a court first must engage in the process of contract construction to determine whether there is a gap that needs to be filled.” (citation omitted)).
152
Nemec, 991 A.2d at 1126 (citing Dunlap, 878 A.2d at 441).
153
Nationwide Emerging Managers, LLC v. Northpointe Hldgs., LLC, 112 A.3d 878, 896 (Del. 2015) (citing Dunlap, 878 A.2d at 441).
28
World Energy claims Air Products frustrated the parties’ bargain by exiting
the Paramount Facility expansion project “for commercial reasons unrelated to
World Energy’s performance” and manufacturing “pretextual grounds to
terminate.”154 But the Master Project Agreement tells the parties exactly when and
how they could terminate: upon a material breach by the other party, with no
limitations.155 World Energy’s uncured defaults triggered Air Products’ right to
walk away from the relationship, no matter its true motive. “The time to demand
restrictions on an express contractual right was during negotiations—not years later
through the implied covenant,” after that right was validly triggered.156 Draping the
contractual consequences of World Energy’s nonpayment in “general allegations of
bad faith” does not invoke the implied covenant.157 World Energy fails to state a
claim for its breach. Count III is dismissed.
3. Estoppel
In Count VII, World Energy asserts a single claim for both promissory and
equitable estoppel.158 It alleges that after terminating the Master Project Agreement,
154
D.I. 27 at 37; see also Compl. ¶¶ 17, 24, 237–40.
155
Master Project Agreement § 18.1.
156
Glaxo Gp. Ltd. v. DRIT LP, 248 A.3d 911, 920 (Del. 2021) (citing Nemec, 991 A.2d at 1126).
157
Kuroda, 971 A.2d at 888.
158
Compl. ¶¶ 262–69.
29
Air Products promised—and began preparing—to complete “necessary repairs to
the 12-D Rack,” including by “preparing the site and removing bracing and
scaffolding.”159
“[P]romissory estoppel is fundamentally a narrow doctrine, designed to
protect the legitimate expectations of parties rendered vulnerable by the very
processing of attempting to form commercial relationships.”160 To plead a
promissory estoppel claim, the plaintiff must allege that:
(1) a promise was made; (2) it was the reasonable expectation of the
promisor to induce action or forbearance on the part of the promisee;
(3) the promisee reasonably relied on the promise and took action to his
detriment; and (4) such promise is binding because injustice can be
avoided only be enforcement of the promise.161
At oral argument, World Energy explained that the 12-D Rack repairs are
“part and parcel” of Air Products’ “obligations to fund and complete the work and
to maintain the plant under the [Master Project Agreement].”162 But as our Supreme
Court noted in SIGA Technologies, Inc. v. PharmAthene, Inc., promissory estoppel
is inapplicable “where a fully integrated, enforceable contract governs the promise
159
Id. ¶¶ 263, 264.
160
Ramone v. Lang, 2006 WL 905347, at *14 (Del. Ch. Apr. 3, 2006).
161
Grunstein v. Silva, 2009 WL 4698541, at *7 (Del. Ch. Dec. 8, 2009) (citing Pharmathene, Inc. v. SIGA Techs., Inc., 2008 WL 151855, at *17 (Del. Ch. Jan. 16, 2008), and then citing Lord v. Souder, 748 A.2d 393, 399 (Del. 2000))).
162
Hr’g Tr. 11–12.
30
at issue.”163 World Energy cannot rely on promissory estoppel to revive a promise
that was covered by, and thus died with, the Master Project Agreement.164
The question is therefore whether World Energy has pled Air Products made
a cognizable promise about the 12-D Rack after it terminated the Master Project
Agreement. Promissory estoppel requires “a real promise, not just mere expressions
of expectation, opinion, or assumption.”165 The promise must be “reasonably
definite and certain.”166 World Energy has fallen short of pleading a definite
promise.
World Energy alleges that after Air Products terminated the Master Project
Agreement, “[b]oth parties planned and agreed that Air Products would permanently
repair the 12-D Rack during [a] February 2025 turnaround.”167 It further alleges Air
completed “pre-work” for the repairs, and that “[t]hroughout [] daily
communications, Air Products consistently communicated that they were moving
forward with the 12-D Rack and other repairs.”168 Those allegations do not amount
163
67 A.3d 330, 348 (Del. 2013) (citing Chrysler Corp. (Del.) v. Chaplake Hldgs., Ltd., 822 A.2d 1024, 1033–34 (Del. 2003)).
164
See Master Project Agreement §§ 2.1, 32.6.
165
James Cable, LLC v. Millennium Digit. Media Sys., L.L.C., 2009 WL 1638634, at *5 (Del. Ch. June 11, 2009) (internal quotation marks omitted) (quoting Addy v. Piedmonte, 2009 WL 707641, at *22 (Del. Ch. Mar. 18, 2009)).
166
Id. (citing Cont’l Ins. Co. v. Rutledge & Co. Inc., 750 A.2d 1219, 1233 (Del. Ch. 2000)). 167
Compl. ¶ 181.
168
Id. ¶¶ 185, 186.
31
to a real promise. “[D]aily conversations” between onsite teams about “moving
forward” with certain repairs cannot be reasonably interpreted as a definite
promise.169 World Energy does not plead “when the promise was made, to whom it
was made, or any other specifics.”170 It does not indicate Air Products would
complete the 12-D Rack repairs on “any particular terms.”171 World Energy’s failure
to plead a real promise is fatal to its promissory estoppel claim.172
World Energy’s equitable estoppel theory fares no better. To state a claim
for equitable estoppel, a plaintiff must allege:
(1) conduct by the party to be estopped that amounts to a false
representation, concealment of material facts, or that is calculated to
convey an impression different from, and inconsistent with that which
the party subsequently attempts to assert, (2) knowledge, actual or
constructive, of the real facts and the other party's lack of knowledge
and the means of discovering the truth, (3) the intention or expectation
that the conduct shall be acted upon by, or influence, the other party
and good faith reliance by the other, and (4) action or forbearance by
the other party amounting to a change of status to his detriment.173
169
Id. ¶ 185.
170
James Cable, 2009 WL 1638634, at *5.
171
Hyetts Corner, LLC v. New Castle Cnty., 2021 WL 4166703, at *9 (Del. Ch. Sept. 14, 2021).
172
See Metro. Convoy Corp. v. Chrysler Corp., 208 A.2d 519, 521 (Del. 1965). 173
Olson v. Halvorsen, 2009 WL 1317148, at *11 (Del. Ch. May 13, 2009) (internal quotation marks omitted) (quoting Cornerstone Brands, Inc. v. O’Steen, 2006 WL 2788414, at *3 n.12 (Del. Ch. Sept. 20, 2006)), aff’d, 986 A.2d 1150 (Del. 2009).
32
A party’s “reliance must be both reasonable and justified under the circumstances.
Thus, the standards for establishing the elements of equitable estoppel are stringent;
the doctrine is applied cautiously and only to prevent manifest injustice.”174
World Energy has not pled circumstances that support justifiable reliance on
any purported representations about the 12-D Rack repairs. When the 2025 February
turnaround allegedly began, World Energy was well aware of Air Products’s exit
from the Paramount Facility project. It knew Air Products suspended performance
in early February, sent a formal termination notice later that month, and publicly
announced the termination.175 The termination notice referenced the impending
“demobilization and winding-down” of Air Products’ work, and explained Air
Products was walking away because it was not getting paid.176 Even if World Energy
questioned the termination’s validity, it could not have reasonably relied on informal
onsite communications and “pre-work” on a job Air Products had just called off.177
Count VII is dismissed.
174
Pilot Point Owners Ass’n v. Bonk, 2008 WL 401127, at *2 (Del. Ch. Feb. 13, 2008) (footnote omitted) (citing Progressive Int’l Corp. v. E.I. Du Pont de Nemours & Co., 2002 WL 1558382, at *6 (Del. Ch. July 9, 2002)).
175
Compl. ¶¶ 170–74.
176
Carbonara Aff. Ex. V at 1.
177
Compl. ¶ 186.
33
4. Mutual Mistake And Reformation
Count IV asserts a mistake claim seeking reformation of the Credit
Agreement.178 Specifically, it seeks a reformation that would swap the Credit
Agreement’s unambiguous 15% interest rate179 with a 4.5% rate used in the Master
178
See Compl. ¶¶ 241–49.
The parties dispute whether I need to address this claim at all. In the fall of 2025, a New York court found World Energy liable for breach of the Guaranty and awarded Air Products damages in the amount of $343,014,718.45, representing what World Energy owed under the Credit Agreement. Air Prods. & Chems., Inc., 2025 WL 2682969, at *1. The judgment was unanimously affirmed on appeal. Air Prods. & Chems., Inc., 256 N.Y.S.3d at 17. Air Products argues these decisions are dispositive of World Energy’s reformation claim. See D.I. 40.
But as World Energy observes, the New York action “involved only a single claim relating to a single contract: [Air Products’] claim against [WE LLC] to enforce payment obligations under the parties’ Guaranty.” D.I. 41 at 2. While the trial court concluded the applicable interest rate on those payment obligations was 15%, it did not address the narrow issue of whether World Energy is entitled to the equitable remedy of reformation on mutual mistake grounds. So I have considered that claim.
The Credit Agreement contains a New York choice of law provision. See Credit Agreement § 10.9. “Delaware courts will generally honor a contractually-designated choice of law provision so long as the jurisdiction selected bears some material relationship to the transaction.” J.S. Alberici Constr. Co., Inc. v. Mid-W. Conveyor Co., Inc., 750 A.2d 518, 520 (Del. 2000) (citing Annan v. Wilm. Tr. Co., 559 A.2d 1289, 1293 (Del. 1989)). But in litigating this claim, the parties have relied solely on Delaware law. See D.I. 24 at 50–53; D.I. 27 at 38–41; D.I. 29 at 28–32.
It does not appear the choice of law would change the analysis or outcome. In both Delaware and New York, to state a reformation claim based on mutual mistake, the proponent must plead with particularity “exactly what was really agreed upon between the parties.” 11 King Ctr. Corp. v. City of Middletown, 982 N.Y.S.2d 504, 505–06 (N.Y. App. Div. 2014) (internal quotations omitted) (quoting George Backer Mgmt. Corp. v. Acme Quilting Co., Inc., 413 N.Y.S.2d 135, 139 (N.Y. Ct. App. 1978)); see also Hilgreen v. Pollard Excavating, Inc., 146 N.Y.S.3d 323, 325–26 (N.Y. App. Div. 2021); Cerberus Int’l, Ltd. v. Apollo Mgmt., L.P., 794 A.2d 1141, 1152–53 (Del. 2002). I take the parties’ lead and evaluate World Energy’s claim under Delaware law.
179
See Credit Agreement § 1.1 (defining “Applicable Rate” as “15.0% per annum”).
34
Project Agreement in connection with the MFF.180 It alleges the failure to reflect a
4.5% interest rate in the Credit Agreement was an “obvious error.”181
Reformation is a narrow equitable remedy. It is “not an equitable license for
the Court to write a new contract at the invitation of a party who is unsatisfied with
his or her side of the bargain; rather, it permits the Court to reform a written contract
that was intended to memorialize, but fails to comport with, the parties’ prior
agreement.”182 “The Court may reform a contract ‘only when the contract does not
represent the parties’ intent because of fraud, mutual mistake or, in exceptional
circumstances, a unilateral mistake coupled with the other parties’ knowing
silence.’”183
World Energy advances a mutual mistake theory. That theory imposes a
heavy burden. A plaintiff alleging mutual mistake “must show that both parties were
mistaken as to a material portion of the written agreement.”184 To survive a motion
to dismiss, the plaintiff must allege: (1) the parties reached a definite agreement
180
Compl. ¶¶ 245–46, 249.
181
Id. ¶ 248.
182
In re TIBCO Software Inc. S’holders Litig., 2015 WL 6155894, at *13 (Del. Ch. Oct. 20, 2015); see also Collins v. Burke, 418 A.2d 999, 1002–03 (Del. 1980); In re Est. of Justison, 2005 WL 217035, at *10 (Del. Ch. Jan. 21, 2005).
183
Great-W. Inv’rs LP v. Thomas H. Lee P’rs, L.P., 2011 WL 284992, at *11 (Del. Ch. Jan. 14, 2011) (quoting James River-Pennington Inc. v. CRSS Cap., Inc., 1995 WL 106554, at *7 (Del. Ch. Mar. 6, 1995)).
184
Cerberus Int’l, 794 A.2d at 1151–52 (citing Collins, 418 A.2d at 1002).
35
before executing the final contract; (2) the final contract failed to incorporate the
terms of the agreement; (3) the parties’ mutually mistaken belief reflected the
parties’ true agreement; and (4) the precise mistake the parties made.185 “The
requirements are cumulative, and each one must be pled with particularity.”186
The claim fails at the first step: pleading a definite prior agreement.
“Reformation requires the existence of a specific prior contractual understanding
that conflicts with the terms of the written agreement.”187 While that prior
understanding “need not constitute a complete contract in and of itself,”188 it must
be sufficiently definite to specify for the Court “exactly what terms to insert in the
contract.”189 World Energy alludes to an oral agreement between the parties about
charging a 4.5% interest rate on the Credit Agreement loan until Air Products
completed its Plant A optimization work.190 As pled, that agreement is far from
definite.
185
Great-W. Inv’rs LP, 2011 WL 284992, at *11 (citing Joyce v. RCN Corp., 2003 WL 21517864, at *4 (Del. Ch. July 1, 2003)).
186
AECOM v. SCCI Nat’l Hldgs., Inc., 2023 WL 6294985, at *6 (Del. Ch. Sept. 27, 2023) (citing Cerberus Int’l, 794 A.2d at 1153); see Ct. Ch. R. 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”). 187
ASB Allegiance Real Est. Fund v. Scion Breckenridge Managing Member, LLC, 2012 WL 1869416, at *13 (Del. Ch. May 16, 2012).
188
Cerberus Int’l, 794 A.2d at 1152 (citations omitted).
189
Collins, 418 A.2d at 1002 (citations omitted).
190
Compl. ¶ 121.
36
First, World Energy relies on the loan’s structuring history. It argues the
Credit Agreement’s $270 million loan arose out of a $300 million loan bifurcated
into two components for tax reasons: a $30 million sale-leaseback under the Master
Project Agreement and a $270 million loan under the Credit Agreement.191 The $30
million sale-leaseback applied a 4.5% “rate of return.”192 World Energy thus
contends the parties “obvious[ly]” intended to apply that 4.5% rate across both
agreements.193 That argument is unpersuasive. The structuring history explains why
the parties divided World Energy’s financing obligations into two instruments. It
does not “demonstrate[e] that the parties came to a ‘real agreement’” on charging
the same interest rate under both instruments.194
From there, World Energy points to statements by Air Products executives
after the parties executed the Credit Agreement.195 When World Energy allegedly
broached the interest rate issue to Air Products, one executive explained the 15%
interest rate “may be a mistake.”196 Another explained that rate “did not sound
191
Id. ¶¶ 95–96.
192
Id. ¶ 103a; Master Project Agreement at Attachment B.
193
Compl. ¶ 248.
194
MetCap Securities LLC v. Pearl Senior Care, Inc., 2007 WL 1498989, at *9 (Del. Ch. May 16, 2007).
195
See Davis v. C.J. Harris, Inc., 1962 WL 69607, at *3 (Del. Ch. Oct. 10, 1962) (“Subsequent events or representations are of no consequence in determining whether or not a mutual mistake existed when the contract was executed.” (citation omitted)). 196
Compl. ¶ 123a.
37
right.”197 Still another suggested “World Energy should hold off on making interest
payments” at all until the Paramount Facility achieved sufficient production
levels.198 These statements are not only vague, but also inconsistent. They offer no
“definitive, clear and particular agreement” about a 4.5% interest rate for the Court
to reference in reforming the Credit Agreement.199
And World Energy itself agreed the 15% interest rate was not a mistake. In
the Forbearance Agreement, executed eight months after the Credit Agreement,
World Energy unconditionally acknowledged the Credit Agreement “is legal, valid,
binding, and enforceable . . . in accordance with its terms.”200 And it acknowledged
that under those terms, it owed no less than $18,460,000 in overdue interest
payments.201 Those acknowledgements undermine any theory of mistake here.
Count IV is dismissed.
5. Fraud
Count V asserts a claim for fraud, alleging Air Products promised “a
reasonable cure or forbearance agreement” if World Energy executed the Second
197
Id. ¶ 123b.
198
Id. ¶ 126; see also id. ¶ 127 (alleging that “[f]ollowing the February 2024 meeting, both parties understood and agreed that World Energy would not pay interest until the Plant A expansion work was completed and until a third-party working capital provider was installed”).
199
AECOM, 2023 WL 6294985, at *8.
200
Forbearance Agreement § 1.02(a).
201
Id. § 1.02(b)(ii).
38
Amendment to the Credit Agreement.202 To survive a motion to dismiss on a claim
for fraud, a plaintiff must plead:
(1) a false representation, usually one of fact; (2) the defendant’s
knowledge or belief that the representation was false, or was made with
reckless indifference to the truth; (3) an intent to induce the plaintiff to
act or to refrain from acting; (4) the plaintiff’s action or inaction taken
in justifiable reliance upon the representation; and (5) damage to the
plaintiff as a result of such reliance.203
Under Court of Chancery Rule 9(b), “[i]n alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud or mistake.”204 To
satisfy Rule 9(b), a plaintiff must allege: “(1) the time, place, and contents of the
false representation; (2) the identity of the person making the representation; and (3)
what the person intended to gain by making the representations.”205
World Energy’s fraud claim is not premised on false representations of fact.
Instead, it is premised on an allegedly false promise—i.e., to “enter into a separate
cure or forbearance agreement” if World Energy agreed to execute the Second
202
Compl. ¶ 253.
203
See Hauspie v. Stonington P’rs, Inc., 945 A.2d 584, 586 (Del. 2008).
204
Ct. Ch. R. 9(b).
205
Abry P’rs V, L.P. v. F & W Acq. LLC, 891 A.2d at 1050 (citing H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 145 (Del. Ch. 2003)).
39
Amendment.206 World Energy’s fraud allegations “are thus best considered through
the lens of ‘promissory fraud.’”207
“This Court looks with particular disfavor at allegations of fraud when the
underlying utterances take the form of unfulfilled promises of future
performance.”208 That is because usually, “statements which are merely promissory
in nature and expressions as to what will happen in the future are not actionable as
fraud.”209 A claim of promissory fraud thus entails “a heightened burden to plead
‘particularized facts that allow the Court to infer that, at the time the promise was
made, the speaker had no intention of keeping it.’”210 That is, the plaintiff “must
plead specific facts that lead to a reasonable inference that the promissor had no
intention of performing at the time the promise was made.”211 “[A] party’s failure
to keep a promise does not prove the promise was false when made.”212
206
Compl. ¶ 251.
207
CPC Mikawaya Hldgs., LLC v. MyMo Intermediate, Inc., 2022 WL 2348080, at *17 (Del. Ch. June 29, 2022).
208
Winner Acceptance Corp. v. Return on Cap. Corp., 2008 WL 5352063, at *9 (Del. Ch. Dec. 23, 2008).
209
Outdoor Techs., Inc. v. Allfirst Fin., Inc., 2001 WL 541472, at *4 (Del. Super. Apr. 12, 2001) (citations omitted).
210
CPC Mikawaya Hldgs., 2022 WL 2348080, at *17 (quoting MicroStrategy Inc. v. Acacia Rsch. Corp., 2010 WL 5550455, at *15 (Del. Ch. Dec. 30, 2010)). 211
Winner Acceptance, 2008 WL 5352063, at *10.
212
Berdel, Inc. v. Berman Real Est. Mgmt., Inc., 1997 WL 793088, at *8 (Del. Ch. Dec. 15, 1997).
40
World Energy’s promissory fraud allegations lack “a proper pleading of
intent.”213 It does not plead particularized facts suggesting Air Products “intended
to renege at the time it made the promise.”214 It pleads only that Air Products
promised an updated forbearance agreement if World Energy executed the Second
Amendment, and that Air Products subsequently refused to honor that promise.215
While World Energy quibbles with the “suspicious timing” of the refusal,216 the
Complaint itself pleads Air Products did not exercise its remedies until months after
the Second Amendment.217 World Energy offers no basis to infer from that
chronology that Air Products intended to renege at the time of its promise.
With no other specific facts to rely on, World Energy falls back on its
argument that Air Products simply “had no intention of providing World Energy
relief, as evidenced by its immediate refusal to honor the promise once the Second
Amendment was signed.”218 Again, “a party’s failure to keep a promise” is not
“evidence” of an intent to break that promise at the outset.219 World Energy has
failed to state a claim for promissory fraud. Count V is dismissed.
213
Dunn v. FastMed Urgent Care, P.C., 2019 WL 4131010, at *9 (Del. Ch. Aug. 30, 2019). 214
Berdel, 1997 WL 793088, at *8 (citations omitted).
215
See Compl. ¶¶ 156, 251–54.
216
D.I. 27 at 46 (citing Grunstein, 2009 WL 4698541, at *13).
217
See Compl. ¶ 173.
218
Id. ¶ 254.
219
See Berdel, 1997 WL 793088, at *8.
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B. Irreparable Harm and Balance of the Equities
At oral argument, I told the parties there were several reasons I would not
order the mandatory injunction World Energy requested. This case must be
dismissed for failure to state a claim; further ruminations on why final relief is not
granted stray into dicta. But for the sake of explaining my reasoning for denying the
preliminary injunction when I did, I will note that World Energy also failed to
demonstrate the sine qua non of injunctive relief: irreparable harm.
“A mandatory injunction will only issue if the plaintiff demonstrates it is
necessary to prevent irreparable harm.”220 While not dispositive, the availability of
a remedy at law in the form of compensatory damages tips against a finding of
irreparable harm.221
World Energy sees irreparable harm from the 12-D Rack’s current condition
in the potential loss of customer relationships, the potential loss of its “first-mover
and industry-leader status” in the sustainable aviation fuel market, and damage to
both the Paramount Facility and the city’s economy.222 But by World Energy’s own
220
DeMarco v. Christiana Care Health Servs., Inc., 263 A.3d 423, 437 (Del. Ch. 2021) (citing Richard Paul, Inc. v. Union Improvement Co., 86 A.2d 744, 747–48 (Del. Ch. 1952)).
221
See AM Gen. Hldgs. LLC v. Renco Gp., Inc., 2012 WL 6681994, at *4 (Del. Ch. Dec. 21, 2012); Gray v. Council of Town of Newark, 79 A. 735, 737 (Del. Ch. 1911) (“A clear case of prospective injury for which the plaintiff will have no adequate remedy at law is indispensable.”).
222
Compl. ¶¶ 216–17.
42
admission, it does not need the requested mandatory relief to avoid those harms:
World Energy could “engage another entity” to make the 12-D Rack repairs and
complete the work.223 Indeed, according to World Energy, “the 12-D Rack is not a
complex piece of machinery” that only Air Products can repair.224
Oral argument injected some question as to whether World Energy can hire
somebody else to repair the 12-D Rack and seek to shift the costs to Air Products.
There, World Energy asserted that engaging another entity would be infeasible given
Air Products’ ownership of the land, structures, and equipment at issue.225 It argued
Air Products has cut off access to the Paramount Facility.226 Counsel for Air
Products represented that is not true, referencing a letter it sent World Energy on
July 8, 2025.227 That letter makes clear “the access offer remains open.”228 I cannot
conclude World Energy will suffer irreparable harm absent the requested relief.
223
Id. at Prayer for Relief.
224
D.I. 27 at 27.
225
Hr’g Tr. 55; see also D.I. 27 at 23; Compl. ¶ 192.
226
Hr’g Tr. 55.
227
Id. at 124–25 (referencing a letter dated July 8, 2025, stating that “the access offer remains open. If World Energy wishes to access the Paramount refinery to conduct remediation activities, it is welcome to do so with appropriate supervision as long as it pays for those activities and confirms that allowing access will not prejudice Air Products’ legal rights . . . .”). World Energy did not dispute receiving this letter. 228
Id.
43
In the absence of irreparable harm, the balance of the equities weighs against
World Energy. Granting the requested mandatory relief would require Air Products
to perform services under a contract that it terminated months ago, as it was entitled
to do. World Energy can solve the problem its defaults created by hiring somebody
else to fix the 12-D Rack. Under these circumstances, World Energy has not shown
that denying the mandatory injunction would cause it “greater harm than granting
the injunction will cause [Air Products].”229
III. CONCLUSION
World Energy is not entitled to the mandatory injunctive relief it seeks, and
Air Products’ motion to dismiss is GRANTED.
229
DeMarco, 263 A.3d at 437 (citing Cantor Fitzgerald, L.P. v. Cantor, 724 A.2d 571, 587 (Del. Ch. 1998)).
44