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Saturday, March 29, 2008

Spring Creek Holding Company, Inc. v. Shinnihon U.S.A. Co., Ltd.

03-27-08 A-4606-05T2

Applying the Restatement (Second) of Contracts § 251, we
held that a seller of real estate acted within its rights in
terminating the agreement of sale because of a series of events
that led the seller to reasonably believe that a protracted
internal shareholder dispute over control of the buyer
corporation would prevent the buyer from performing, primarily
with respect to prosecuting zoning approvals. The seller
demanded adequate assurance of performance. The documentary
record supported the Chancery Division judge's finding in
granting summary judgment in the seller's favor that no rational
factfinder could find that the buyer provided adequate assurance
of performance. We further held that the apparent resolution of
the shareholder dispute through a federal lawsuit more than
three years after the seller terminated the agreement did not
affect the outcome of this litigation.