Sitara arranged for a creditor to foreclose on its assets and then bought them back, reopening as a new entity, Converged Access.
On appeal at the SJC, the legal issue was whether the law allowed the trial judge to provide the buyer with this favorable election of remedies.
The high court ruled that this case fit within this exception and upheld the award of damages to the buyer.
Naturally, the court seemed particularly upset about the behavior of the seller’s attorney at the closing.
With few exceptions, outside of the commercial law context, Massachusetts has not generally recognized the doctrine of anticipatory repudiation, which permits a party to a contract to bring an action for damages prior to the time performance is due if the other party repudiates.
One such exception occurs where a seller of land informs the “holder of an enforceable option” to purchase that he plans to sell the land to a third party.
KGM, with funds on hand, was ready, willing and able to close, and took the Prosky’s attorney’s antics at the closing as not engaging in good faith, and walked out. Anticipatory Repudiation, Breach of Good Faith and Fair Deal, or Both? The trial judge ruled the sellers had engaged in anticipatory repudiation but he calculated the sales price in favor of the sellers at over $1M, giving the buyer the option of going forward with the deal or taking the liquidated damages because the buyers had also breached the covenant of good faith and fair dealing with their attorney’s antics at the closing.