Delaware Chancery rejects Saama founder's $67.5M earnout claim, orders payback

The Delaware Court of Chancery denied Saama Technologies founder Suresh Katta's claim to a $67.5 million earnout tied to Carlyle Group's 2021 investment in the clinical data company, and ordered him to pay Saama about $7.3 million. After trial, the court found that Katta had not proved he was entitled to the earnout, and that he acted in bad faith by steering the company into contracts that harmed the business in order to increase the payout. Law360 reported the decision, and the opinion is available from the Delaware courts.

Why it matters. The decision illustrates how Delaware courts scrutinize post-merger earnout disputes and can impose affirmative monetary liability on a seller found to have manipulated earnout metrics, a precedent relevant to merger and earnout litigation the firm may encounter.