McGraw-Hill Companies, Inc. v. School Specialty, Inc., 9269.
| Decision Date | 19 July 2007 |
| Docket Number | 9269. |
| Citation | 840 N.Y.S.2d 47,42 A.D.3d 360,2007 NY Slip Op 06164 |
| Parties | THE McGRAW-HILL COMPANIES, INC., et al., Appellants, v. SCHOOL SPECIALTY, INC., et al., Respondents. |
| Court | New York Supreme Court — Appellate Division |
Plaintiffs entered into a stock and asset purchase agreement for the sale of a juvenile education publishing business to defendants, at a price of $46.6 million, subject to postclosing adjustments. Plaintiffs were to deliver a final balance sheet at closing, showing the final net asset value of the business; defendants would thereupon have 45 days to dispute any amounts by furnishing plaintiffs with a written notice of objection. In the event the parties were unable to settle their differences, issues in dispute would be referred to ADR.
After closing, plaintiffs prepared a final balance sheet purportedly reflecting the value of the business as of that date, but defendants disputed some of the amounts and presented plaintiffs with a timely objection notice. When the parties were unable to resolve their differences, defendants invoked the ADR provision, and plaintiffs responded by commencing the action herein, seeking a declaratory judgment that would preclude the arbiter from reviewing its accounting methodology and practices.
A clear and complete agreement in writing should be enforced according to its terms (see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]). Here, the ADR clause (§ 2.6 [b] [v]) afforded the purchaser 45 days "to dispute any amounts contained" in the final net asset value. Since defendants made a timely objection to eight of those amounts set forth in the final balance sheet, they are clearly entitled to invoke the arbitration section of the agreement. Plaintiffs are misguided in asserting that an action for "indemnification" is the exclusive remedy, citing section 10.7, which refers to claims for damages under the agreement.
Contrary to plaintiffs' argument, defendants' objection notice does not propose to revisit the accounting methods used in...
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