IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
ACON IGLOO HOLDINGS, LLC, )
)
Plaintiff/Counterclaim )
Defendant, )
)
v. ) C.A. No. 2022-1057-LWW
)
DOMETIC CORPORATION, )
)
Defendant/Counterclaim )
Plaintiff. )
MEMORANDUM OPINION
Date Submitted: June 12, 2026
Date Decided: September 30, 2026
John M. Seaman, E. Wade Houston & Ben Lucy, ABRAMS & BAYLISS LLP,
Wilmington, Delaware; David L. Balser, Lawrence A. Slovensky & Jackson Eskay, KING & SPALDING LLP, Atlanta, Georgia; Counsel for Plaintiff/Counterclaim Defendant ACON Igloo Holdings, LLC
Bruce E. Jameson & John G. Day, PRICKETT, JONES & ELLIOTT, P.A.,
Wilmington, Delaware; Alec H. Schultz, Carly A. Kligler & Sarah G. Perryman, HILGERS PLLC, Miami, Florida; Michael Burns, HILGERS PLLC, Washington, D.C.; Counsel for Defendant/Counterclaim Plaintiff Dometic Corporation
WILL, Vice Chancellor
This post-trial decision resolves an earnout dispute. It arises from Dometic
Corporation’s October 2021 acquisition of cooler manufacturer Igloo Acquisition
Holdings Corporation from an affiliate of ACON Investments LLC—a middlemarket private equity firm. The purchase price included a contingent payment that
ACON and Igloo leadership, including Igloo CEO David Allen, would receive if
Igloo generated at least $75.25 million in EBITDA by year-end 2022. The parties’
stock purchase agreement required Dometic to ensure Igloo would be operated in
the ordinary course, consistent with its past practices under ACON, and under
Allen’s leadership. It also prohibited Dometic from taking action with the intent to
avoid or reduce the earnout payment.
As 2022 progressed, it became clear that Igloo was falling short of the target.
With the historically slow fourth quarter underway, Allen—in consultation with
ACON and its lawyers—presented Dometic with a binary choice between strategies
he titled “Deliver Earnout” and “Optimize Long Term Value.” When Dometic
reminded Allen that any short-term measures to achieve the earnout had to remain
consistent with Igloo’s past practices, ACON and Allen shut down typical discounts
in a tactical effort to force a renegotiation. When that plan failed, they turned their
focus to litigation.
ACON did not meet its burden of proving that Dometic breached the ordinary
course or no-avoidance covenants in the purchase agreement. Dometic acted
1
consistently with the contract, and Allen’s “Deliver Earnout” plan was not in the
ordinary course.
Dometic also failed to prove its counterclaims for tortious interference with
confidentiality agreements and trade secret misappropriation. Although the record
reflects troubling disclosures of information to ACON by Allen (and, to a lesser
degree, by Igloo’s CFO), Dometic proved no resulting injury on its tortious
interference claim. Nor did Dometic establish that the presentations on which it
based its trade-secret claim contained protectable trade secrets.
Ultimately, both sides lose.
I. BACKGROUND
Unless otherwise noted, the following facts were stipulated to by the parties or
proven by a preponderance of the evidence at trial.1
A. ACON Acquires Igloo
ACON Investments is a middle-market private equity firm specializing in
consumer products, business services, and industrials.2 Its general practice is to
1
See Am. Joint Pre-trial Stipulation (Dkt. 244) (“PTO”). Trial occurred over three days, during which five fact witnesses and two expert witnesses testified live and one fact witness appeared by deposition. See Trial Trs. Vols. I-III (Dkts. 255-57). Trial testimony is cited as “[Name] Tr. __.” The trial record contains 737 joint exhibits and 18 deposition transcripts. Exhibits are cited by the numbers provided on the parties’ joint exhibit list as “JX __,” unless otherwise defined. See Joint Ex. List (Dkt. 254). Deposition transcripts are cited as “[Name] Dep. __.”
2
Brotman Tr. 6-7; PTO ¶ 5.
2
purchase a controlling stake in private companies, grow the enterprise value, and
exit at a profit.3 Its investment professionals sit on portfolio company boards and
guide strategy, delegating day-to-day management to officers and employees.4
In 2014, ACON Investments acquired Igloo Acquisition Holdings
Corporation (“Igloo”), a holding company that owned the Igloo brand and cooler
business through subsidiaries.5 ACON Investments formed ACON Igloo Holdings,
LLC (“ACON”), a Delaware limited liability company, to effectuate the purchase.6
In 2018, ACON hired David Allen, an industry veteran with experience in the
consumer and outdoor products sectors, to serve as Igloo’s Chief Executive Officer.7
Allen embraced a management philosophy of “cut[ting] costs, build[ing] brands, and
develop[ing] people.”8 He recruited additional senior leadership, including Robert
Peak to serve as Chief Financial Officer.9
3
Brotman Tr. 6-8.
4
Id. at 10.
5
PTO ¶¶ 8, 17.
6
Id. ¶¶ 5, 8.
7
Id. ¶ 9; Brotman Tr. 12.
8
Peak Tr. 352.
9
Brotman Tr. 12.
3
B. Igloo Under ACON
Igloo is a “seasonal business” that sets prices based on its “gross margin
structure.”10 Its cooler business picks up at the start of spring, “peaks in the summer
months, and . . . tails off in the fall.”11 To prepare for peak season, Igloo begins
manufacturing coolers in September of the prior year.12
Igloo set its annual budget in the fourth quarter of the prior fiscal year.13 The
budget established financial targets, including gross sales and earnings before
interest, taxes, depreciation, and amortization (“EBITDA”).14 ACON was
ultimately responsible for approving the final budget.15 Throughout the year, ACON
monitored Igloo’s financial performance and maintained oversight of its executive
team.16
10
Allen Tr. 94-95, 96.
11
Id. at 94.
12
Id. at 95.
13
Id. at 93; Brotman Tr. 13-14.
14
Peak Tr. 352-53, 357.
15
Brotman Tr. 13.
16
Allen Tr. 93-94; Brotman Tr. 13-14 (“I believe . . . we had quarterly board meetings, we had monthly reviews of operations, and then lots of ad hoc interim conversations or emails when things came up.”).
4
ACON empowered Igloo to set prices consistently with its budget and adjust
them amid market fluctuations.17 When Igloo fell behind its projections, ACON
gave executive leadership wide latitude to implement “levers” to put the company
back on track, including price changes, sales campaigns, and cost reductions.18 Igloo
did not need ACON’s approval before executing these levers because ACON was
not “equipped to opine on” operational issues.19 ACON’s approval was required
only for major capital expenditures, such as “upgrading the facilities.”20
ACON’s stated goal was to maximize EBITDA.21 And Igloo aimed to meet
or exceed its budgeted EBITDA.22 In 2019, Igloo obtained a year-end EBITDA of
roughly $35 million.23 In 2020, its EBITDA was approximately $39.3 million.24
And in 2021, Igloo obtained an EBITDA of roughly $31 million.25
17
Allen Tr. 93-94, 97-99 (describing the effects of the COVID-19 pandemic and a “heavy freeze in and around the Texas area” on resin prices); Peak Tr. 357. 18
Brotman Tr. 16; id. at 29-30, 51-52; Allen Tr. 96-102, 121.
19
Brotman Tr. 8, 16 (“We are not business owners or operators. We invest.”). 20
Allen Tr. 94.
21
Brotman Tr. 23, 84-85.
22
Peak Tr. 352-53 (“When we would set a budget, the goal was to hit the budget or exceed the budget from an EBITDA perspective.”); Allen Tr. 94.
23
Ratner Tr. 706.
24
Kulkarni Tr. 621-22; JX 23.
25
Ratner Tr. 706.
5
C. Dometic Acquires Igloo
In 2021, Dometic Corporation identified Igloo as a potential acquisition
target.26 Dometic is a U.S. subsidiary of Dometic Group AB, a Swedish public
company.27 Its mission is to “implement strict norms and efficient processes to
ensure that all operations create long-term value for shareholders and other
stakeholders.”28
Dometic Group is led by Juan Vargues, who has served as its Chief Executive
Officer since 2018.29 Under Vargues’s leadership, Dometic has completed twelve
acquisitions, ten of which included an earnout component.30 Until now, Dometic
had never been involved in earnout litigation.31
On September 17, 2021, ACON agreed to sell its ownership interest in Igloo
to Dometic pursuant to a Stock Purchase Agreement (the “Purchase Agreement”)
for consideration of up to $900 million.32 The purchase price included a $677
million cash payment at closing, the potential for additional payments in post-closing
26
Vargues Dep. 93-94.
27
PTO ¶ 12.
28
JX 121 at 69.
29
Vargues Tr. 488; PTO ¶ 13.
30
Vargues Tr. 488-89.
31
Id. at 490.
32
PTO ¶ 24; Brotman Tr. 17; JX 64 (“Purchase Agreement”).
6
adjustments, and contingent earnout payments of up to $223 million.33 If Igloo
achieved the earnout, Allen and Peak stood to personally benefit: Allen a maximum
of $15.77 million, and Peak $2.31 million.34
D. The Purchase Agreement
The earnout was contingent on Igloo’s achievement of EBITDA targets
between December 25, 2021 and December 31, 2022.35 If Igloo’s aggregate
EBITDA during the earnout period was less than $75.25 million, no earnout payment
was owed.36 If Igloo achieved the $75.25 million threshold, ACON was entitled to
a $75.5 million payment.37 The amount owed to ACON increased incrementally for
each dollar of EBITDA over this minimum base target, capped at a maximum
payment of $223 million if EBITDA exceeded $86.20 million.38
The earnout structure created conflicting incentives. ACON and Igloo
management were incentivized to maximize short-term EBITDA to ensure payment
of the earnout.39 Dometic sought to maximize long-term stockholder value.40 To
33
Purchase Agreement § 1.8; id. at Ex. A-3; see Brotman Tr. 17; PTO ¶ 25. 34
PTO ¶¶ 27, 29; JX 76; JX 77.
35
Purchase Agreement § 1.8; PTO ¶ 1.
36
Purchase Agreement § 1.8(a)(i).
37
Id. § 1.8(a)(i); id. at Ex. A-6.
38
Purchase Agreement § 1.8(a)(ii); id. at Exs. A-1, A-6.
39
Brotman Tr. 7-8, 32.
40
Id. at 44.
7
manage this risk, the parties agreed to certain restrictions on Dometic’s authority to
run Igloo’s business during the earnout period.
Dometic’s “discretion with regard to all matters relating to the operation of”
Igloo was limited by a covenant that Allen would have “reasonable authority to run
the daily operations” of Igloo.41 Igloo would be operated “in the ordinary course of
business and consistent with past practices.”42 Dometic agreed to “provide support
as [wa]s reasonably necessary” for Allen to operate Igloo “consistent with the
manner” it had been run before closing.43 Dometic also agreed not to take any action
“with the intent of reducing the EBITDA” of Igloo “or otherwise avoiding or
reducing” the earnout payment.44
Alongside the Purchase Agreement, Allen and Peak entered into
Confidentiality and Employment Agreements with Dometic (the “Confidentiality
Agreements”).45 The Confidentiality Agreements barred Allen and Peak from
disclosing “Confidential Information” about Igloo’s businesses.46
41
Purchase Agreement § 1.8(c)(i).
42
Id.
43
Id. § 1.8(c)(ii).
44
Id. § 1.8(c)(vi).
45
JX 78; JX 79.
46
JX 78 § 6(b); JX 79 § 6(b).
8
E. Igloo’s Performance in Late 2021 to Mid-2022
In the fourth quarter of 2021, Igloo presented its 2022 budget to Dometic.
Due to “dramatic swings in [Igloo’s] input costs and the continuing impact of
COVID,” Igloo presented three budget scenarios.47 The “Most Likely” scenario
forecast gross sales of $585.6 million and EBITDA of $75 million.48 Igloo relied
upon this scenario to set its budget target at $75 million in EBITDA.49 It noted a
“medium probability” that lower sales volume and higher resin and freight costs
might cause it to miss this mark.50
In the first quarter of 2022, external market forces disrupted Igloo’s
projections. Russia invaded Ukraine, which increased oil prices.51 As a result, the
index for composite resin—a key material used to make Igloo coolers—spiked from
$0.90 to $1.05.52 These resin prices exceeded Igloo’s initial projections.53
Freight costs also skyrocketed. Igloo’s budget assumed freight costs of
$11,000 per container, but the index rose to $15,800 by March 2022.54 In response,
47
PTO ¶ 30; JX 81.
48
JX 81.
49
PTO ¶ 30.
50
Peak Tr. 426-48.
51
Allen Tr. 113.
52
Id.
53
JX 81 at 5.
54
JX 2001 at 1.
9
Igloo management elected to raise prices mid-March, but the increases would not
take effect for 60 to 90 days.55 Consequently, Igloo fell behind its targets for the
first half of the year.56 In June 2022, Igloo reported that its year-to-date gross sales
were $19 million lower than budget and EBITDA was $13 million lower than
budget.57
F. Igloo’s Performance in the Third Quarter of 2022
On July 13, 2022, Igloo’s senior leadership team met to discuss the earnout.58
Management circulated an “Earnout Update” presentation revealing that net sales
were 6% below budget and EBITDA was 28% below target.59 The presentation
directed employees to “[s]ubmit three actions that [their] team [would] take to drive
$75.25M+ EBITDA” to Allen and Peak by July 15.60
Allen and Peak consolidated the resulting proposals in a document called
“Path to $75M.”61 According to Allen, Igloo’s “biggest value driver” would require
resolving “open pricing discrepancies.”62
55
See JX 116; JX 140; Allen Tr. 113; Militello Tr. 323.
56
Peak Tr. 372.
57
JX 170 at 9.
58
JX 169 at 1-2.
59
Id. at 3.
60
Id. at 7.
61
JX 180; JX 181; JX 182.
62
JX 174.
10
On August 8, both Allen and Peak submitted official notice of their intent to
leave Igloo.63 The notice was given 150 days in advance, under the terms of their
employment agreements with Dometic.64
Meanwhile, the ACON team was exploring ways to hit the $75.25 million
EBITDA target as it grew increasingly unlikely. For example, it contemplated
purchasing—then giving away—$20 million worth of Igloo coolers in August
2022.65 It discussed whether Igloo could execute a sale-leaseback transaction
relating to its facilities in Katy, Texas.66
By October 2022, third-quarter financials confirmed that Igloo missed its
gross sales and EBITDA targets.67 Peak informed Allen that hitting the earnout
required a $22 million fourth-quarter EBITDA—far exceeding the initially budgeted
$8.5 million.68 Despite this deficit, Igloo management continued to forecast fourthquarter EBITDA between $20.1 and $21.7 million to the Dometic board.69
63
JX 189; JX 190.
64
JX 189; JX 190.
65
JX 191; Brotman Tr. 27-28.
66
JX 183; JX 187; JX 209.
67
JX 268 at 1, 10.
68
Id. at 1.
69
JX 2002 (September 20 presentation) 16; JX 288 (October 11 presentation) 20; Allen Tr. 231-32 (explaining that he did not tell Dometic’s board that Igloo was tens of millions behind the sales and EBITDA targets in its preexisting budget).
11
Internally, however, Allen acknowledged on October 11 that Igloo “still ha[d]
about $25M of sales to identify in Q4.”70 On October 17, management reported its
third-quarter miss and forecasted a year-end EBITDA of $64.1 million, absent $30
to $40 million of additional fourth-quarter sales.71
G. Plan D
Facing a significant deficit after the prior three quarters, Allen formed a new
strategy to boost EBITDA in the fourth quarter. Doing so was no small task. The
fourth quarter was “historically [Igloo’s] lowest EBITDA and sales quarter,” given
the seasonal nature of its business.72
On October 19, Allen sent a text message to Suma Kulkarni, a managing
partner of ACON Investments.73 He wrote: “Alright, I have a new idea (Plan D).
Let’s touch base in the morning if you’re free.”74 ACON’s founding partner, Ken
Brotman, described Plan D as “a continuing attempt” to “reach a commercial
settlement” with Dometic regarding the earnout.75 Allen executed on the plan the
following day.
70
JX 289 at 1; see also JX 156.
71
JX 294 at 15; Allen Tr. 216-17.
72
JX 2012; Peak Tr. 455 (quoting JX 2012).
73
JX 299 at 2 (text message from Allen to “Mommy bb” (Kulkarni)); see PTO ¶ 7. 74
JX 299 at 2.
75
Brotman Tr. 48; see PTO ¶ 6.
12
On October 20, Vargues met with Allen and other members of Igloo
management at Igloo’s headquarters in Texas.76 He was exploring a transition plan
given Allen’s and Peak’s upcoming departures. During a closed-door meeting,
Allen told Vargues that he intended to pursue a plan to sell off excess and obsolete
inventory and “pull forward a price decrease” during the fourth quarter to reach the
earnout target.77 If Vargues was unsupportive of the plan, Allen said that Vargues
would need to renegotiate the earnout with ACON.78 Allen’s plan amounted to two
options: boost sales for the fourth quarter to deliver the earnout, or concentrate on
long-term growth but not hit the earnout target.79 Vargues asked Allen to prepare
materials summarizing the two scenarios.80
Later that day, Peak sent Vargues a slide deck titled “2022-2023 Scenarios,”
which modeled the financial effects of the two options Allen had raised.81 The
scenarios were titled “Deliver Earnout” and “Optimize Long Term Value.”82 Under
the “Deliver Earnout” scenario, Igloo would achieve an EBITDA of $77.9 million
76
PTO ¶ 34.
77
Allen Tr. 138-39; see Vargues Tr. 503.
78
Allen Tr. 138-39 (“And told him if he didn’t want to do either of those actions, then that was between he and ACON if he wanted to go and negotiate that.”); Vargues Tr. 502-06. 79
Vargues Tr. 503-04.
80
Allen Tr. 139.
81
JX 315; Allen Tr. 139.
82
JX 315.
13
in 2022 but comparatively lower EBITDA in the first and second quarters of 2023.83
Under the “Optimize Long Term Value” scenario, Igloo would achieve an EBITDA
of $65.1 million in 2022 but maintain “sequential quarterly [EBITDA] growth”
through the end of 2023.84
Allen then forwarded the scenarios he “shared with Juan” to Kulkarni and
Brotman.85
H. Vargues Emails Allen
On October 22, Vargues emailed Allen regarding the “2022-2023
Scenarios.”86 He wrote:
We consider the development of the Igloo business and the value
creation for all the stakeholders long term as very important. The
company business shall be conducted in the ordinary course of
business consistent with the past practices and we do not see
reasons to take any short term measures deviating from that.87
83
Id. at 3. Mike Avery, Igloo’s VP of Finance, created the deck. He modeled a scenario in which Igloo increased fourth quarter sales volume by decreasing price. Avery Dep. 202-03.
84
JX 315 at 2.
85
JX 303.
86
JX 316.
87
Id.
14
Allen responded later that day, writing: “[U]nderstood. We will continue to operate
the business in the ordinary course.”88 Allen also forwarded the exchange to
Brotman, Kulkarni, and ACON’s counsel at King & Spalding LLP.89
Vargues lacked the information needed to assess the two scenarios and grew
concerned that Allen and ACON were driving to renegotiate the earnout. 90 He
contacted Josh Militello—Igloo’s then-Senior Vice President of Sales—to discuss
the scenarios.91 Vargues asked Militello whether it made sense for Igloo’s long-term
positioning to decrease prices to deliver the earnout.92 Militello told Vargues that,
if it were up to Militello, Igloo would not take the price decreases because it would
be an anomaly that would impair long-term value creation.93 In prior years, Igloo
had not offered the sort of incentives and pricing reductions to drive revenue and hit
its budget during the fourth quarter that Allen was contemplating.94
88
JX 320.
89
JX 321.
90
Vargues Tr. 505-06.
91
Id. at 506-07; Militello Tr. 332.
92
Militello Tr. 332.
93
Id. at 332-33 (“I told him if I was in his seat, then his best bet for the long-term value of Dometic was to not take a price decrease.”); Vargues Tr. 507.
94
Militello Tr. 327-28.
15
The next day, Vargues emailed Allen and Peak to express his preference for
maintaining the company’s past practices.95 He expressed that he interpreted the
2022-2023 Scenarios deck as an intention to “implement extraordinary measures . . .
in contradiction with the principles of the operating model for Igloo agreed [to] in
the [Purchase Agreement].”96 Vargues “reiterate[d]” what Peak and Allen “already
kn[e]w and what should be [their] guiding principle for running the company during
the earn out period, namely that [they] and the Igloo management team shall conduct
the company business in the ordinary course of business consistent with past
practices.”97 He closed by stating: “Any short term measures contradicting this
principle must be approved by [Dometic], and we want by this email [to] make it
very clear: we do not approve any short term[] actions, such as customer campaigns
with discounted prices.”98
Once again, Allen forwarded Vargues’s email to ACON.99 Kulkarni
responded that it was “[n]ot good,” and that they needed to “come up with a plan
that gets to negotiate and get to a win win.”100 Allen suggested that they be “more
95
JX 326; Vargues Tr. 509-510; Allen Tr. 150-51.
96
JX 326.
97
Id. (emphasis removed).
98
Id. (emphasis added).
99
Id.; JX 325 (“Just sent you the latest response from Dometic.”).
100
JX 325.
16
aggressive” in responding that Dometic was “trying to limit [their] ability to deliver
the earnout.”101
On October 23, Allen asked Brotman and Kulkarni to “get aligned before”
speaking with King & Spalding.102 Throughout the day, they had calls and
exchanged emails with King & Spalding about how to respond to Vargues.103
Brotman proposed that Allen write: “Past practice has always included the
fundamental objective of maximizing revenues and EBITDA for current periods and
that is what we continue to do . . . .”104 Brotman knew that Igloo had not, however,
previously maximized revenue for an earlier quarter to the detriment of a later
quarter.105
That afternoon, Allen wrote to Vargues that he would “continue to operate the
business in the ordinary course of business.”106 He disavowed any “plan to
implement ‘extraordinary measures’” and confirmed that his plans were “completely
consistent with past practices.”107 Allen also expressed that he had “the authority to
101
Id.
102
JX 333 at 2.
103
JXs 330-44.
104
JX 330.
105
Brotman Tr. 85-86; Brotman Dep. 180. Brotman was impeached on this issue at trial. 106
JX 346.
107
Id.
17
operate the business in the ordinary course” without being “micromanage[d]” by
Dometic.108
I. The Airport Phone Call
Allen was scheduled to fly to Bentonville, Arkansas on October 24 to present
a sales pitch to Walmart—Igloo’s largest customer.109 To prepare for the pitch, Igloo
management had drafted a proposal offering Walmart a 10% cost concession in
exchange for accepting a minimum of $14 million in incremental shipments.110
Igloo had not previously offered these types of incentives in the fourth quarter.111
While at the airport, Allen joined a Microsoft Teams call with Peak, Vargues,
and Stefan Fristedt (Dometic’s Chief Financial Officer).112 Fristedt recorded the
call.113 Allen explained that he was “jumping on the plane to go meet with [Igloo’s]
largest customer” to “get rid of what is over 110 percent increase in inventory.”114
Fristedt asked Allen about the 2022-2023 scenarios deck—specifically, why
Allen had presented Dometic with the choice to either allow Igloo to satisfy the
108
Id.
109
Allen Tr. 179; Peak Tr. 484; JX 313.
110
JX 313.
111
Militello Dep. 167; see also id. at 262-64; JX 375.
112
JX 348 (native).
113
JX 2009; Fristedt Tr. 611-12.
114
JX 2009 at 4.
18
earnout or generate long-term value.115 Allen responded that short-term discounting
was necessary to monetize inventory because they were “sitting on 110 percent more
inventory” and “have to continue to pre-build coolers” for the summer months.116
Vargues was wary of Allen’s shift in plan, and mentioned that two weeks
earlier, Allen had told him “minor concessions” only were planned, which were
“pretty different” from Allen’s new proposal.117 Allen was unwavering, and said that
he did not need Dometic’s “permission” for price concessions.118 Vargues was also
suspicious that Allen had even raised a pricing issue with Dometic, since he had
never done so before.119
After more back-and-forth, Allen stated that he and Vargues would “agree to
disagree.”120 The call ended. Although Vargues never told Allen to stand down or
cancel his meeting, Allen abruptly left the airport and cancelled his trip to
Bentonville.121
115
Id. at 4.
116
Id. at 6.
117
Id. at 7.
118
Id. at 7-8.
119
Id. at 9-10.
120
Id. at 11.
121
Allen Tr. 180-81.
19
That afternoon, Allen wrote to Vargues to “follow up” on their Teams call.122
He stated that Vargues had “reiterated [his] direction from [his] prior email” that
Dometic “d[id] not approve any short term[] actions, such as customer campaigns
with discounted prices.”123 “As a result,” Allen said, Igloo would “not offer Walmart
or any [other] customers excess inventory at reduced prices or give any price
concessions for the balance of the year.”124 He noted that this move would
“adversely affect [Igloo’s] revenue, EBITDA and working capital for Q4.”125
Vargues was puzzled by this email, since he had not given any such direction
during the Teams call.126 He asked Allen why, in the course of one month, he had
“adjusted the outlook for Q4 2022 three times.”127 Vargues pointed out specific
figures and observed that, “[w]hen looking back on the quarterly patterns[,] it [wa]s
hard to understand that the latest outlook for Q4 2022 [Allen was] suggesting would
have anything to do with past practices.”128 He emphasized that Dometic had not,
122
JX 381.
123
Id.
124
Id.
125
Id.
126
Vargues Tr. 515-16; see JX 2009.
127
JX 381.
128
Id.
20
at any point, given the Igloo team instructions adversely affecting Igloo’s financial
results but had required Igloo to operate “in the ordinary course.”129
Allen then directed Militello to suspend discount programs for numerous
clients.130
J. ACON’s Litigation Preparations
With Plan D having failed, ACON turned its focus to litigation.
On October 25, Brotman asked Allen to call him before Allen spoke “to
lawyers.”131 Brotman asked Allen to move correspondence to his “personal
email.”132 Allen forwarded emails to Brotman and Kulkarni about a request Dometic
had not yet approved and Igloo’s inventory, prior sales programs, and financial
information.133 He did so to “support the earnout conversation discussions [they]
were having.”134
The next day, on October 26, Allen and Kulkarni exchanged text messages
about a draft notice that Dometic had breached the Purchase Agreement.135 Allen
129
Id.
130
JX 379.
131
JX 357.
132
Id.
133
JX 356; JX 358; JX 359; JX 366; see Allen Tr. 291-94.
134
Allen Tr. 293.
135
See JX 375; Allen Tr. 296.
21
provided input on King & Spalding’s draft.136 Allen commented: “[W]e can’t say
that we ran a similar program last year in Q4 because we didn’t have future price
increases to leverage.”137 He also suggested that he could “shut down all
promotions/discounts” at Igloo, acknowledging that it would “hurt [Igloo] even
further” but “[t]hat may be the point.”138
King & Spalding transmitted a Notice of Breach to Dometic’s counsel on
October 27, stating that Dometic was in violation of the Purchase Agreement.139 The
letter stated that Dometic had “overruled Mr. Allen’s decisions on issues that fall
within the purview of the management team,” causing “material harm to [Igloo’s]
business” and “a significant detrimental effect on [Igloo’s] 2022 EBITDA.”140 On
October 31, counsel for Dometic sent a response letter denying the accusations.141
On November 6, Allen participated in a call with ACON, King & Spalding,
and the Aegis Law Group (which ACON had retained to represent Allen).142 The
purpose of the call was to gather more factual information in preparation for filing
136
JX 375 (Allen: “Overall, a massive improvement from the original draft.”). 137
Id.; Allen Tr. 297.
138
JX 375.
139
JX 2004.
140
Id.
141
JX 384; see also JX 408.
142
JX 392.
22
the present action.143 In the coming weeks, Allen provided additional information
to assist in drafting the complaint.144
The specter of litigation was designed to encourage Dometic to recut the deal.
As ACON’s counsel noted: “[Allen] will drop the bomb, we then send the letter”
attempting to renegotiate the earnout, “and the field is set for a discussion.”145
Dometic declined to renegotiate the earnout.
K. Disclosures to ACON and BBI
During the fourth quarter, Peak and Allen transmitted Igloo proprietary
documents to ACON.
On November 18, Peak sent a slide deck titled “SKU and Customer EBITDA”
to Kulkarni.146 The slide deck contained charts and graphs pertaining to Igloo’s
sales, customer- and product-specific EBITDA, and SKU proliferation.147 The next
morning, Kulkarni forwarded Peak’s email and the presentation to Beauty By
143
Id.; JX 395.
144
See JX 398; JX 400; JX 401; JX 403; JX 417; JX 418.
145
JX 404 at 5; Kulkarni Tr. 671.
146
JX 1001.
147
Id.; Peak Tr. 354.
23
Imagination (“BBI”), an ACON portfolio company.148 She then forwarded a second,
similar Igloo presentation to BBI.149
On November 28, Kulkarni asked Allen for a copy of Igloo’s “current org
chart.”150 Allen sent back several charts documenting Igloo’s organizational
structure.151 They were marked “CONFIDENTIAL,” indicating that “[t]he[]
documents contain information which is confidential and proprietary to Igloo
Products Corp.”152
On November 30, Peak forwarded a Dometic presentation to another ACON
employee.153 “Exactly what we need at BBI,” the ACON employee responded.154
One week later, Peak emailed a BBI employee a presentation called “Igloo Strategic
Plan,” which was labeled “Confidential and Proprietary.”155 Both emails were sent
from Peak’s personal email address.156
148
Peak Tr. 354; JX 1001 at 1.
149
JX 1002.
150
JX 433.
151
Id.
152
JX 433. Allen sent additional spreadsheets with detailed financial information on January 19, 2023. JX 480. He also transmitted proprietary business decisions, such as why Igloo had not executed certain “cost savings rebates,” to Kulkarni. JX 487; JX 488. 153
JX 438; JX 439.
154
JX 438; JX 439.
155
JX 447.
156
JX 438; JX 439; JX 447.
24
L. This Litigation
ACON filed this lawsuit on November 18, 2022, advancing claims for breach
of the Purchase Agreement and of the implied covenant of good faith and fair dealing
against Dometic.157 Dometic brought several counterclaims, some of which I
dismissed under Rule 12(b)(6).158 The remaining counterclaims are for tortious
interference with contract and misappropriation of trade secrets under the District of
Columbia Uniform Trade Secrets Act.
A three-day trial took place on March 11-13, 2026.159 Post-trial briefing was
complete as of June 8, 2026.160 A post-trial argument was held on June 12, 2026,
after which the matter was submitted for decision.161
II. ANALYSIS
ACON claims that Dometic breached its contractual obligations and the
implied covenant of good faith and fair dealing by interfering with Igloo’s ability to
operate in the ordinary course during the earnout period. It seeks money damages
157
Dkt. 1. ACON filed an amended and supplemented complaint on February 12, 2025. Dkt. 211. The claims remained fundamentally the same. Id.
158
Dkts. 74, 144, 147.
159
Dkt. 251.
160
See Pl.’s Opening Post-trial Br. (Dkt. 259); Def.’s Post-trial Answering Br. (Dkt. 262); Pl.’s Post-trial Reply Br. (Dkt. 263); Def.’s Post-trial Reply Br. (Dkt. 264). 161
Dkt. 267.
25
plus pre- and post-judgment interest.162 Dometic claims that ACON tortiously
interfered with Allen’s and Peak’s Confidentiality Agreements in seeking
confidential information, and that ACON misappropriated Igloo’s trade secrets by
obtaining certain presentations containing purportedly proprietary information. It
likewise seeks money damages and pre- and post-judgment interest.163
The proponents bear the burden of proving their claims by a preponderance
of the evidence. “Proof by a preponderance of the evidence means proof that
something is more likely than not.”164 Under this standard, “certain evidence, when
compared to the evidence opposed to it, has the more convincing force and makes
[the court] believe that something is more likely true than not.”165
Neither party met its burden of proof at trial on any claims.
A. Whether Dometic Breached the Purchase Agreement
ACON claims that Dometic breached earnout-related covenants in Section
1.8(c) of the Purchase Agreement.166 To prevail on its breach of contract claim,
ACON must prove the existence of a contract, a breach of an obligation imposed by
162
PTO § IV.A ¶ 54.
163
Id. § IV.B ¶ 55.
164
Agilent Techs., Inc. v. Kirkland, 2010 WL 610725, at *13 (Del. Ch. Feb. 18, 2010) (quoting Del. Express Shuttle, Inc. v. Older, 2002 WL 31458243, at *17 (Del. Ch. Oct. 23, 2002)).
165
Id.
166
Pl.’s Opening Post-trial Br. 41-47.
26
that contract, and resulting damages.167 The parties agree that the Purchase
Agreement is valid and binding.168 My analysis therefore hinges on the second
element: whether Dometic breached it.
This inquiry is guided by settled principles of contract interpretation.169
“Delaware law adheres to the objective theory of contracts,” meaning that “a
contract’s construction should be that which would be understood by an objective,
reasonable third party.”170 Where a contract is unambiguous, the court gives effect
to the “plain meaning of the contract’s terms and provisions.”171 It must assess the
contract “as a whole and . . . give each provision and term effect, so as not to render
any part of the contract mere surplusage.”172
ACON claims that Dometic breached two sets of earnout-related covenants in
the Purchase Agreement. The first set defined Allen’s authority to operate Igloo in
the ordinary course of business and required Dometic to provide him support to do
167
See VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003). 168
PTO ¶ 24.
169
See Purchase Agreement § 10.9 (selecting Delaware law to govern “matters of validity, construction, effect, performance and remedies”).
170
Salamone v. Gorman, 106 A.3d 354, 367-68 (Del. 2014) (quoting Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010)).
171
Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159-60 (Del. 2010); see also RhonePoulenc Basic Chems. Co. v. Am. Motorists Ins., 616 A.2d 1192, 1195 (Del. 1992) (“Clear and unambiguous language . . . should be given its ordinary and usual meaning.”). 172
Osborn, 991 A.2d at 1159 (quoting Kuhn Constr., Inc. v. Diamond State Port Corp., 990 A.2d 393, 396-97 (Del. 2010)).
27
so (the “Ordinary Course Covenant”).173 The second prohibited Dometic from
acting with the intent to avoid or reduce the earnout payment (the “No-Avoidance
Covenant”).174 In ACON’s view, these covenants were intended to “freeze time,”
preserving Allen’s reasonable authority and Igloo’s ability to operate in the ordinary
course while prohibiting Dometic from working to deprive it of the earnout.175
ACON asserts that Dometic breached these covenants by “overruling” Igloo’s Q4
2022 plan and by “direct[ing] Allen not to implement the short-term actions Igloo
management had identified to achieve Igloo’s financial targets.”176 ACON failed to
prove a breach of either covenant.
1. The Ordinary Course Covenant
Section 1.8(c) of the Purchase Agreement provides, in relevant part:
During the Earn-Out Period, [Dometic] shall have discretion
with regard to all matters relating to the operation of [Igloo],
provided that:
(i) [Dometic] shall procure that David Allen will have
reasonable authority to run the daily operations of [Igloo] and
shall conduct the business of [Igloo] in the ordinary course of
business and consistent with past practices of [ACON] (subject
to [Dometic’s] code of conduct and other policies). David Allen
173
Purchase Agreement § 1.8(c)(i)-(ii).
174
Id. § 1.8(c)(vi). ACON raised other allegedly breached covenants before trial but opted not to press them in post-trial briefing. Those arguments are waived. See Emerald P’rs v. Berlin, 726 A.2d 1215, 1224 (Del. 1999) (“Issues not briefed are deemed waived.”). 175
Pl.’s Opening Post-trial Br. 41.
176
Id.
28
will have reasonable authority to adjust [Igloo’s] expenses in
good faith after reasonable consultation with [Dometic].
(ii) [Dometic] shall, in reasonable consultation with David
Allen, provide support as is reasonably necessary to [Igloo]
consistent with the manner in which the business of [Igloo] has
been conducted prior to the Closing.177
“Ordinary course” conduct means conduct undertaken “in the regular course
of events.”178 The Purchase Agreement ties this standard to ACON’s “past practices”
in “conduct[ing]” Igloo’s business.179 Delaware courts have observed that a
covenant to operate “in the ordinary course of business and consistent with” past
practices “imposes an unconditional obligation.”180 Here, those operations were also
made subject to Dometic’s code of conduct and policies.181
ACON asserts that, under its past practices, Igloo set an annual budget with
EBITDA targets, monitored performance, and, when needed, implemented plans to
bring performance back in line with those targets.182 ACON describes this practice
as “empower[ing]” Igloo management to operate the business and pursue budget
177
Purchase Agreement § 1.8(c)(i)-(ii) (emphasis added).
178
AB Stable VIII LLC v. Maps Hotels & Resorts One LLC, 268 A.3d 198, 210 (Del. 2021). 179
Purchase Agreement § 1.8(c)(i).
180
Cooper Tire & Rubber Co. v. Apollo (Mauritius) Hldgs. Pvt. Ltd., 2014 WL 5654305, at *15 (Del. Ch. Oct. 31, 2014).
181
Purchase Agreement § 1.8(c)(i).
182
Pl.’s Opening Post-trial Br. 42.
29
results, including through pricing and other financial levers.183 In ACON’s view,
Allen and his team did just that: “planning, forecasting, identifying levers, and
preparing to execute year-end actions to deliver budget” in mid- to late 2022.184
“Had ACON owned Igloo,” it maintains, it would have supported those efforts and
sought to maximize EBITDA.185
ACON claims that Dometic breached the Ordinary Course Covenant by
prohibiting Allen and his team from following through on their plans. It argues that
“Vargues requested the details of Allen’s financial plan, considered the impact of
the plan on Dometic’s interest in long-term value creation for its public company
investors, and then shut down the plan and any short-term actions to manage Igloo’s
financial results in Q4” 2022.186 Vargues purportedly did so through a “directive”
that “forbade the short-term actions that Igloo would have taken in the ordinary
course to hit its budget.”187 ACON failed to prove that Dometic did anything of the
sort.
183
Id. at 42-43.
184
Id. at 43.
185
Id. at 44.
186
Id.
187
Id.
30
To show that Dometic breached the Ordinary Course Covenant, ACON
focuses on Vargues’s October 23 email to Allen.188 ACON contends that the email
barred Allen from taking any “short term actions” including “customer campaigns
with discounted prices.”189 “After the email,” Allen was allegedly deprived of
“reasonable authority to run the daily operations . . . consistent with the past
practices of ACON” because his “team was not permitted to move forward with its
planned sales programs and other short-term actions to achieve its EBITDA
[t]arget.”190
ACON’s reliance on this email is misplaced.
First, ACON ignores the context in which Vargues sent the email. At the time,
Allen had threatened to either pursue the earnout at the expense of long-term value
or pursue long-term value while expecting Dometic to renegotiate the earnout.191
This “Plan D,” which Allen devised with ACON as a means of pressuring Dometic
to recut the earnout when Igloo underperformed, was far from the ordinary course.
After Militello told Vargues that Allen’s plan was not in the ordinary course,
Vargues reminded Allen of his operational boundaries.192
188
Id. at 45.
189
Id. (quoting JX 328 at 1); see Vargues Tr. 547-48.
190
Pl.’s Opening Post-trial Br. 45 (citing Allen Tr. 175, 181-82; Peak Tr. 409). 191
See supra Section I.G.
192
See Militello Dep. 177; Vargues Tr. 537-38, 546-48; JX 316.
31
ACON also selectively quotes from the email. The key portion of Vargues’s
message states:
We can only reiterate here what you already know and what
should be your guiding principle for running the company
during the earn out period, namely that you and the Igloo
management team shall conduct the company business in the
ordinary course of business consistent with the past
practices.
Any short term measures contradicting this principle must be
approved by us, and we want by this email make it very clear:
we do not approve any short terms actions, such as customer
campaigns with discounted prices, as you indicated to me during
our conversation in Katy last week.193
This email was not a bar on Allen’s authority to operate Igloo consistently
with its past practices before the acquisition. Vargues merely reminded Allen and
Peak that the Purchase Agreement required Igloo’s business to be conducted during
the earnout period “in the ordinary course of business consistent with past
practices.”194 He further advised them that any short-term measures contradicting
the principle stated in the previous sentence (i.e., measures that were not in the
ordinary course of business and consistent with past practice) must be approved by
Dometic.195
193
JX 327 at 1 (bold in original; italics added for emphasis).
194
Purchase Agreement § 1.8(c)(i); see Vargues Tr. 508-11, 518-20.
195
Vargues Tr. 557 (testifying credibly that the email reminded Allen of the “guiding principles of operating in the ordinary course of business”).
32
The trial record demonstrates that Allen’s proposed measures were not
ordinary course actions consistent with past practices. They were last-ditch efforts
coordinated with ACON and its counsel to either achieve the earnout through
unusual pricing and sales strategies or force a renegotiation. The very titles of
Allen’s scenarios—“Deliver Earnout” and “Optimize Long Term Value”—make
that plain.196
In the second quarter, Igloo was well behind its targets, even though that
quarter traditionally accounted for 30% to 40% of its annual revenue.197 A
“substantial gap after Q2 mean[t] that it[] [would be] very, very difficult to recover
in Q3 and Q4.”198 Igloo did not offer price deferrals in the fourth quarter of 2021; it
first offered them at the beginning of 2022.199 ACON introduced no proof that Igloo
had previously offered incentives in the fourth quarter to drive revenue and hit its
year-end budget while under its ownership.200
196
JX 315.
197
Vargues Tr. 495-96.
198
Id.
199
Allen Tr. 104, 176; Militello Tr. 323-24 (confirming that Igloo never gave price deferrals in the fourth quarter of 2021 but gave them at the beginning of 2022). 200
Militello Dep. 167, 262-64 (Q: “Had Igloo ever offered other types of incentives in Q4 to drive revenue and hit budget?” A: “We had had conversations around offering incentives in the past but had not executed on any.”).
33
Allen’s reaction during the October 24 Teams call, as he prepared to fly to
Bentonville, does not suggest otherwise. During the call, Allen admitted that Igloo
had missed its third-quarter sales and EBITDA targets and rolled them into the fourth
quarter forecast.201 He reiterated that Igloo management would run the business as
planned unless Dometic had “a separate conversation” with ACON. 202 Although
ACON argues that Vargues “shut down Igloo’s plans” during this call,203 the
transcript belies that narrative.204 Allen chose to leave the airport, abandon his
meeting with Walmart, and cancel other incentives. As he later told ACON,
“shut[ting] down promotions/discounts” would “hurt [Igloo],” but that “may be the
point.”205
Accordingly, ACON failed to prove a breach of the Ordinary Course
Covenant.
2. The No-Avoidance Covenant
The No-Avoidance Covenant cabined Dometic’s discretion “with regard to all
matters relating to” Igloo’s operations.206 It barred Dometic from taking “any action,
201
JX 348 (native); JX 2009 at 2.
202
JX 348 (native); JX 2009 at 9.
203
Pl.’s Opening Post-trial Br. 28.
204
JX 2009.
205
JX 375 at 3.
206
Purchase Agreement § 1.8(c).
34
directly or indirectly, with the intent of reducing the EBITDA, profitability,
revenues, customer retention or employee retention of [Igloo] or otherwise avoiding
or reducing the Earn Out Payments.”207 “Intent in the legal sense is purpose to use
particular means to effect a certain result.”208 ACON asserts that the evidence shows
that after “Vargues received projections demonstrating that management’s Q4 plan
would deliver the Earn-Out EBITDA,” he “escalated immediately” to “shut down
Igloo’s business” and avoid the payment.209
To prove this breach, ACON points to Vargues’s “routing the [2022-2023
Scenarios presentation] to Dometic’s CFO and legal team, confirming the magnitude
of Dometic’s [earnout] exposure, and then issuing a categorical veto of Igloo’s plans
to hit the [earnout]” by sending the October 23 email.210 As discussed, the
October 23 email was not a “veto.”211 Nor did Vargues act to thwart the earnout by
forwarding Allen’s scenarios to his colleagues at Dometic and considering
Dometic’s potential exposure.
207
Id. § 1.8(c)(vi).
208
Lazard Tech. P’rs, LLC v. Qinetiq N. Am. Operations LLC, 114 A.3d 193, 195 n.8 (Del. 2015) (quoting Coverdale v. State, 531 A.2d 1235 (Del. 1987)); see also S’holder Rep. Servs. LLC v. Albertsons Cos., 2021 WL 2311455, at *6 (Del. Ch. June 7, 2021) (finding allegations sufficient to support an inference of intent to avoid an earnout). 209
Pl.’s Opening Post-trial Br. 46.
210
Id.
211
See supra Section II.A.1.
35
The evidence shows that Allen presented his “Deliver Earnout” plan to
pressure Dometic into renegotiating the terms of the earnout.212 The facts ACON
identifies are consistent with Dometic taking steps to evaluate whether to engage in
such negotiations. These facts also are consistent with Dometic evaluating whether
Allen’s “Deliver Earnout” plan violated the Purchase Agreement. ACON therefore
failed to prove a breach of the No-Avoidance Covenant.
B. Whether Dometic Breached the Implied Covenant
Pleading in the alternative, ACON claims that Dometic’s same conduct
breached the implied covenant of good faith and fair dealing by “depriving ACON
of the fruits of its Earn-Out bargain.”213 “The implied covenant of good faith and
fair dealing inheres in every contract and ensures that neither party acts arbitrarily
or unreasonably to frustrate the fruits of their bargain.”214 The implied covenant is
a limited and extraordinary remedy that operates in two primary ways. The first is
“when a contract allocates discretionary authority to one party over a central aspect
of the contract” and “the party exploits that discretion in a manner that defeats the
‘overarching purpose’ of the bargain.”215 The second is “to address unforeseen
212
See supra Section I.G.
213
Pl.’s Opening Post-trial Br. 48.
214
Johnson & Johnson v. Fortis Advisors LLC, 352 A.3d 229, 253 (Del. 2026). 215
Id. at 253 (quoting Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 442 (Del. 2005)).
36
developments—contingencies neither anticipated nor resolved by the contract—that
threaten the parties’ bargained-for economic expectations.”216
ACON invokes the first scenario, citing Dometic’s “discretion” over Igloo’s
operations, which was made subject to the Ordinary Course and No-Avoidance
Covenants.217 It contends that the implied covenant prohibited Dometic from
“taking affirmative steps to impede [Igloo’s] ability to generate revenue.”218
Dometic purportedly breached the implied covenant by unreasonably exercising its
discretion in a manner that prevented Igloo from achieving sufficient EBITDA.219
The express terms of the Purchase Agreement govern the parties’ conduct,
precluding ACON’s implied covenant claim. “[T]he implied covenant ‘does not
apply when the contract addresses the conduct at issue,’ but only ‘when the contract
is truly silent’ concerning the matter at hand.”220 Here, the Purchase Agreement
grants Dometic discretion to operate Igloo subject to explicit bargained-for
216
Id. at 254.
217
Pl.’s Opening Post-trial Br. 49-50 (citing Purchase Agreement § 1.8(c)). 218
Id. at 48-49 (citing Am. Cap. Acq. P’rs, LLC v. LPL Hldgs., Inc., 2014 WL 354496, at *6-7 (Del. Ch. Feb. 3, 2014)); see also id. (arguing that Dometic was required to afford Igloo “a fair opportunity to operate the company in such a fashion as to maximize the earnout consideration” (citing O’Tool v. Genmar Hldgs., Inc., 387 F.3d 1188, 1197 (10th Cir. 2004))).
219
Id. at 49-50.
220
Oxbow Carbon & Mins. Hldgs., Inc. v. Crestview-Oxbow Acq., LLC, 202 A.3d 482, 507 (Del. 2019) (citation omitted); see also Glaxo Gp. Ltd. v. DRIT LP, 248 A.3d 911, 920 (Del. 2021) (explaining that the implied covenant “cannot be invoked when the contract addresses the conduct at issue”).
37
limitations on that discretion.221 Namely, the No-Avoidance Covenant prohibited
Dometic from acting “with the intent of reducing the EBITDA, profitability,
revenues, customer retention or employee retention of the Group Companies or
otherwise avoiding or reducing the Earn-Out Payments.”222 “The implied covenant
has no room to operate where a contract grants discretion to one party and then limits
that discretion with an ‘intent’ qualifier” because “[t]hat bargained-for contractual
dynamic removes the need for the implied covenant.”223
ACON’s implied covenant claim is therefore legally deficient. Regardless,
ACON failed to prove a breach of any implied term for the reasons discussed
above.224
C. Whether ACON Tortiously Interfered with Contracts
Although little trial time was spent on its counterclaims, Dometic asserts that
ACON tortiously interfered with Allen’s and Peak’s Confidentiality Agreements.225
221
Purchase Agreement § 1.8(c).
222
Id. § 1.8(c)(vi).
223
Albertsons, 2021 WL 2311455, at *2 (Del. Ch. June 7, 2021); see also Reardon v. CANarchy Holdco Corp., 2021 WL 2287468, at *3 (Del. Super. June 4, 2021) (rejecting an implied covenant claim where the obligation was expressly stated in the purchase agreement and prohibited the buyer from “intentionally tak[ing] any action with the intent of reducing the Earnout Amount”).
224
See supra Section II.A.2.
225
Def.’s Post-trial Answering Br. 71-77. ACON argues that Dometic waived and abandoned its counterclaims by neglecting to offer live fact or expert testimony at trial. See Pl.’s Post-trial Reply Br. 49-51. Dometic responds that it pursued its counterclaims under paragraph 73 of the Joint Pre-trial Order, which permits a party to rely on deposition
38
To prevail on a claim for tortious interference with contract, Dometic must show
that “(1) there was a contract, (2) about which the particular defendant knew, (3) an
intentional act that was a significant factor in causing the breach of contract, (4) the
act was without justification, and (5) it caused injury.”226 When analyzing these
elements, Delaware courts are guided by the Restatement (Second) of Torts.227
The existence of the Confidentiality Agreements and ACON’s knowledge of
them are undisputed.228 The agreements prohibited Allen and Peak from disclosing
“Confidential Information,” defined as:
[A]ny knowledge or information about . . . the business,
activities and facilities of [Igloo and/or Dometic], including
business plans, budgets, financial information, methods,
processes, research data, marketing and sales strategies, plans
and information, the sources, costs and pricing of [Igloo’s and/or
Dometic’s] products, the identity and needs of [Igloo’s and/or
Dometic’s] customers and potential customers, [and] personnel
data . . . .229
testimony as though the witness were present and testifying at trial. See Def.’s Post-trial Reply Br. 4-6; PTO ¶ 73. Although I do not deem the counterclaims abandoned, Dometic pursued them with little zeal. They fail on the merits in any event. 226
WaveDivision Hldgs., LLC v. Highland Cap. Mgmt., L.P., 49 A.3d 1168, 1174 (Del. 2012).
227
ASDI, Inc. v. Beard Rsch., Inc., 11 A.3d 749, 751 (Del. 2010); Grunstein v. Silva, 2009 WL 4698541, at *16 (Del. Ch. Dec. 8, 2009).
228
See JX 71; JX 78; JX 79.
229
JX 78 at 4; JX 79 at 4.
39
Dometic contends that ACON acted intentionally by requesting confidential
information from Allen and Peak outside Section 1.8(d) of the Purchase
Agreement.230
Allen provided ACON with confidential information about Igloo’s finances
and business strategies during and after the earnout period. For example, at
Kulkarni’s request, Allen sent a copy of Igloo’s “current org chart”—a document
stating on its face that it “contain[ed] information which is confidential and
proprietary to Igloo Products Corp.”231 Worse, in a January 19, 2023 text thread,
Allen sent Kulkarni Igloo spreadsheets containing detailed financial information,
including weekly KPI metrics and detailed sales and budget information broken
down by customer.232 This information meets the definition of “Confidential
Information” in the Confidentiality Agreement.233 ACON attempted to hide Allen’s
230
Def.’s Answering Post-trial Br. 72; see Purchase Agreement § 1.8(d) (“Buyer shall, on a monthly basis during the Earn-Out Period, (1) deliver to Seller the financial and accounting records of the Group Companies to permit Seller to perform accurate and independent calculations of cumulative EBITDA as of the end of the then most recent calendar month, and (2) provide Seller with reasonable access to management to discuss the financial performance of the Group Companies.”).
231
JX 433.
232
See JX 480.
233
See supra note 229 and accompanying text.
40
disclosures from both Igloo and Dometic, including by asking Allen to shift
communications to his personal email address.234
The allegations regarding Peak are less troubling. Peak sent Kulkarni
materials, at her request, that she could forward to BBI—an ACON portfolio
company in the haircare industry.235 As Kulkarni credibly testified at trial, she sent
the presentations to BBI to show what “really good analysis” looked like in a
presentation.236 It was her intent “to be able to share best practices” across ACON’s
portfolio companies.237 This was far from best practice. But Dometic did not prove
that it constituted tortious interference.
Even if Dometic could prove these actions were unjustified and outside
ACON’s information rights under Section 1.8(d) of the Purchase Agreement, it has
not proven an injury.238 “Resulting injury is a necessary element of a tortious
interference with contract claim.”239 To satisfy this element, a plaintiff must
demonstrate an injury to its “economic interest in the performance of a contract”
234
See, e.g., JX 357 at 2 (Brotman writing to Allen in a text “Let’s move to your personal email for our emailing.”); JX 431 at 2 (Brotman writing to Allen “Sorry, meant to send to your personal email,” to which Allen responds, “All good. I just responded from my personal email. Let me know if you need any additional info.”); see Allen Tr. 291. 235
Kulkarni Tr. 623.
236
Id.
237
Id. at 624.
238
See Pl.’s Post-trial Reply Br. 51-52.
239
Sorrento Therapeutics, Inc. v. Mack, 2023 WL 5670689, at *23 (Del. Ch. Sept. 1, 2023).
41
such that the interference deprived the plaintiff of its “rightful expectations of
performance.”240 Speculative harm is insufficient; “actual damage and loss must
have been occasioned by the wrong.”241
Vargues, testifying as Dometic’s Rule 30(b)(6) witness, admitted that he was
unaware of any losses suffered by Dometic other than attorneys’ fees, and Dometic
offered no trial testimony or admissible expert evidence to contradict that
concession.242 Delaware courts will not, however, permit “impermissible feeshifting under the guise of a tort claim for damages.”243 Under the American Rule,
each party bears its own legal fees in the absence of a recognized exception, such as
a fee-shifting provision.244 Dometic identifies none.
Dometic does not contend that BBI was a competitor of Igloo or that BBI
relied on the documents to obtain any competitive advantage.245 Instead, Dometic
240
NACCO Indus., Inc. v. Applica Inc., 997 A.2d 1, 33-35 (Del. Ch. 2009) (quoting Shearin v. E.F. Hutton Gp., Inc., 652 A.2d 578, 589 (Del. Ch. 1994)); see also WaveDivision, 49 A.3d at 1174 (requiring proof that the unjustified act “caused injury”). 241
Cooper’s Home Furnishing v. Rittenhouse Inv. Assocs., Inc., 1977 WL 9542, at *5 (Del. Ch. Nov. 1, 1977).
242
Vargues Dep. 74.
243
Ross Sys. Corp. v. Ross, 1994 WL 89015, at *4 n.5 (Del. Ch. Feb. 15, 1994). 244
See, e.g., Mahani v. Edix Media Gp., Inc., 935 A.2d 242, 245 (Del. 2007). 245
Vargues Dep. 55-56; Kulkarni Tr. 623 (explaining that BBI is a “hair care platform,” which makes “brushes, hair accessories, wet products like shampoo, conditioners, and heat styling tools”).
42
puts forward an “avoided-cost” theory of damages.246 Dometic asserts that ACON
was enriched by $45,000 because it avoided the design and production costs of
preparing a similar presentation for BBI.247 The record shows that ACON had
received substantially similar presentations from Igloo before the transaction with
Dometic.248 In light of that prior access, Dometic failed to prove that receiving the
later presentations enabled ACON to avoid the claimed $45,000 in design and
production costs.
D. Whether ACON Misappropriated Trade Secrets
Finally, Dometic claims that ACON misappropriated purported trade
secrets—internal financial and accounting records, and related presentations—in
violation of the District of Columbia Uniform Trade Secrets Act (“DCUTSA”).249
To prevail on a claim for trade secret misappropriation under the DCUTSA, Dometic
must show: “(1) the existence of a trade secret; and (2) acquisition of the trade secret
246
See JX 709 (Expert Report of Phillip J. Innes) (identifying a February 2021 “SKU and Customer EBITDA” presentation and a March 2022 “SKU and Customer EBITDA” presentation as the sole sources of damages for tortious interference); JX 1002; JX 1001. 247
Def.’s Post-trial Answering Br. 83 (citing JX 709 at 17).
248
See, e.g., JX 15 at 1-2.
249
Def.’s Post-trial Answering Br. 84-88.
43
by improper means, or improper use or disclosure by one under a duty not to
disclose.”250
The first element is dispositive. The DCUTSA defines a “trade secret” as
“information, including a formula, pattern, compilation, program, device, method,
technique, or process,” that “[d]erives actual or potential independent economic
value, from not being generally known to, and not being readily ascertainable by,
proper means by another who can obtain economic value from its disclosure or use”
and “[i]s the subject of reasonable efforts to maintain its secrecy.”251 “Information
that is ‘generally known or readily ascertainable to the public’ . . . or ‘generally
known within an industry’ . . . cannot constitute a trade secret.”252
Dometic identified “internal financial and accounting records and related
presentations” as the purportedly misappropriated trade secrets.253 It focuses on the
two “SKU and Customer EBITDA” presentations that Peak transmitted to ACON
250
Econ. Rsch. Servs., Inc. v. Resol. Econ., LLC, 208 F. Supp. 3d 219, 232 (D.D.C. 2016) (summarizing D.C. Code § 36-401, et seq.).
251
D.C. Code § 36-401(4).
252
Trilogy Fed., LLC v. CivitasDX LLC, 2025 WL 436850, at *3 (D.D.C. Feb. 9, 2025) (citing Catalyst & Chem. Servs., Inc. v. Glob. Gp. Support, 350 F. Supp. 2d 1, 8-9 (D.D.C. 2004) (citation omitted)).
253
Def.’s Post-trial Answering Br. 86. Because Dometic failed to address the other purported “trade secrets” alleged in its pre-trial filings, such arguments are waived. See Emerald P’rs, 726 A.2d at 1224.
44
on November 18 and 30, 2022.254 Those presentations included charts and graphs
describing Igloo’s sales information, EBITDA, and SKU proliferation from 2018
through 2021.255 But Dometic did not establish that the underlying financial
information was not “generally known within [the] industry.”256 The presentations
instead reflect standard financial analysis for a consumer products company.257
Dometic’s expert identifies the key information within the presentations as
“methodology for determining EBITDA by SKU and the benefits derived from the
approach.”258 Dometic did not, however, establish that this methodology as neither
generally known nor readily ascertainable by proper means. Peak testified that he
had “developed” the same “tool[s]” in his prior role at another company decades
earlier.259
Dometic also relies on the “CONFIDENTIAL” marking on the
presentations.260 The fact that a document is marked confidential does not, however,
254
Def.’s Post-trial Answering Br. 85 n.276 (identifying JX 1001 and JX 1002 as the presentations at issue).
255
JX 1001; JX 1002.
256
Econ. Rsch., 208 F. Supp. 3d at 232.
257
JX 1001; JX 1002; JX 709 at 14.
258
JX 709 at 14.
259
Peak Dep. 178-80; see Sarkissian Mason, Inc. v. Enter. Hldgs., Inc., 955 F. Supp. 2d 247, 256 (S.D.N.Y. 2013) (explaining that certain information did not constitute a “trade secret because it was easily duplicated”).
260
Def.’s Post-trial Answering Br. 87.
45
make it a trade secret.261 Dometic therefore failed to carry its burden of proving that
either the underlying financial information or the analytical methodology constituted
a trade secret under the DCUTSA.
III. CONCLUSION
ACON did not carry its burden of proving that Dometic breached the Purchase
Agreement or the implied covenant of good faith and fair dealing. Dometic likewise
did not carry its burden of proving that ACON tortiously interfered with Allen’s and
Peak’s Confidentiality Agreements or misappropriated a protectable trade secret.
Judgment is entered in Dometic’s favor on ACON’s claims and in ACON’s
favor on Dometic’s counterclaims. The parties must confer on and file a proposed
form of final order implementing this decision within 14 days.
261
D.C. Code § 36-401(4)(A) (requiring that the alleged trade secret “[d]erive[] actual or potential independent economic value,” irrespective of designation).
46