Delaware’s Supreme Court has overturned a ruling from a lower court that dismissed BitGo’s $100 million lawsuit against Galaxy Digital following a failed acquisition. The Supreme Court stated that the language in the BitGo-Galaxy Digital $1.2 billion merger agreement was “ambiguous,” leading them to reverse the lower court’s decision. The court has allowed the consideration of additional evidence to resolve this ambiguity.
This successful appeal gives BitGo the opportunity to file a lawsuit against Galaxy Digital once again. In their initial lawsuit in August 2022, BitGo accused Galaxy of intentionally breaching the acquisition agreement. Galaxy argued that it had the right to terminate the deal after BitGo failed to provide audited financial statements from 2021.
R. Brian Timmons, a partner at law firm Quinn Emanuel representing BitGo, expressed his satisfaction with the court’s decision and their readiness to proceed with the case in the Chancery Court.
Previously, the Delaware Court of Chancery dismissed BitGo’s case with prejudice in June 2023, stating that Galaxy had the right to terminate the acquisition. A spokesperson for Galaxy Digital responded to the Supreme Court’s decision, stating that they will vigorously defend themselves and have confidence in the merits of their case.
Galaxy Digital, led by Mike Novogratz, had announced its intention to acquire BitGo in May 2021 as part of its public offering in the United States. Following the collapse of cryptocurrency exchange FTX in November 2022, Galaxy disclosed exposure of approximately $77 million to the firm before FTX filed for bankruptcy.
Note: This article has been updated to include a statement from Galaxy Digital.