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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

JANCO FS 2, LLC AND JANCO FS 3, )
LLC, )
) C.A. No. N23C-03-005 MAA CCLD
Plaintiffs, )
v. )
)
ISS FACILITY SERVICES, INC.; ISS )
C&S BUILDING MAINTENANCE )
CORPORATION; ISS TMC )
SERVICES, INC.; and ISS FACILITY )
SERVICES CALIFORNIA, INC, )
)
Defendants. )
______________________________ )
)
ISS FACILITY SERVICES, INC.; ISS ) C.A. No. N23C-07-036-MAA CCLD
C&S BUILDING MAINTENANCE ) Transferred from:
CORPORATION; ISS TMC ) C.A. No. 2022-1197-SG
SERVICES, INC.; and ISS FACILITY )
SERVICES CALIFORNIA, INC., )
)
Plaintiffs, )
v. )
)
JANCO FS 2, LLC; and JANCO FS )
3, LLC )
)
Defendants. )

Submitted: July 7, 2025
Decided: August 21, 2025

POST-TRIAL OPINION
Robert L. Burns, Esquire, and Sandy Xu, Esquire of RICHARDS, LAYTON &
FINGER, P.A., Wilmington, Delaware, and Jason J. Carter, Esquire (Argued), and
Austin L. Hollimon, Esquire of BONDURANT MIXSON & ELMORE, LLP,
Atlanta, Georgia, and Fredric J. Bold, Jr., Esquire of GREENBERG TRAURIG,
LLP, Atlanta Georgia, Attorneys for JanCo FS 2, LLC and JanCo FS 3, LLC.

David J. Teklits, Esquire, Thomas P. Will, Esquire, Rachel R. Tunney, Esquire, and
Louis F. Masi, Esquire, of MORRIS, NICHOLS, ARSHT & TUNNELL LLP,
Wilmington, Delaware, and Mark T. Oakes, Esquire (Argued), Ryan E. Meltzer,
Esquire, and Emily D. Wolf, Esquire of NORTON ROSE FULBRIGHT US, LLP,
Austin, Texas, Attorneys for Defendants ISS Facility Services, Inc., ISS C&S
Building Maintenance Corporation, ISS TMC Services, Inc., and ISS Facility
Services California, Inc.

Adams, J.
INTRODUCTION

This post-trial opinion resolves disputes regarding the sale of a cleaning

business between the seller, ISS, and the buyer, JanCo.1 JanCo alleges ISS

fraudulently induced JanCo into agreeing to the Asset Purchase Agreement (the

“APA”), and that JanCo received a business worth far less than it anticipated. JanCo

further alleges ISS breached the terms of the APA and committed willful misconduct

in doing so. ISS counters that JanCo, not ISS, breached the Parties’ contract.

For the reasons discussed herein, the Court finds ISS breached a single

provision in the APA. JanCo, however, failed to prove damages for that breach by a

preponderance of the evidence. ISS proved JanCo breached the Parties’ contracts

by failing to pay certain post-closing purchase price adjustments. The Parties’

remaining claims fail. Judgment is entered accordingly.

BACKGROUND2

A. The Parties

JanCo is a group of Delaware Limited Liability Companies which are

subsidiaries of the Argenbright Group of companies (“Argenbright”).3 Argenbright

1
“JanCo” refers to the plaintiffs and counter-defendants in this action, JanCo FS 2, LLC and JanCo
FS 3, LLC. “ISS” refers to the defendants and counter-plaintiffs in this action, ISS Facility
Services, Inc.; ISS C&S Building Maintenance Corporation; ISS TMC Services, Inc.; and ISS
Facility Services California, Inc. The Court refers to ISS and JanCo together as the “Parties.”
2
Citations to the transcript of the November 18-21 Trial are in the form of “11/# Tr. at #.” Unless
otherwise noted, all D.I. references will refer to the consolidated docket: N23C-03-005 MAA
CCLD.
3
D.I. 202 at 8 [“Pretrial Stip.”].
1
provides “workforce solutions in human-capital intensive industries.”4 Argenbright

formed JanCo in connection with the transaction at issue.5

“The ISS group of companies provides workplace and facility management

services on a global scale, with locations in over forty countries and approximately

400,000 employees worldwide.”6 ISS is headquartered in Denmark.7

B. Key Witnesses

John Maynord is JanCo’s Chief Financial Officer.8 Seth Higdon is JanCo’s

Vice President of Finance.9 Billie-Ann Reader is JanCo’s Vice President of

Operation Services.10 Reader joined JanCo after the transaction, formerly working

as ISS’s Associate Vice President for the West.11

Jason Pitcock is the former Vice President of ISS’s cleaning division.12 After

ISS sold the cleaning division (the “Business”) to JanCo, Pitcock joined JanCo as

Vice President of Operations.13 JanCo later terminated Pitcock, and Pitcock returned

4
Id.
5
Id. at 11.
6
Id. at 9.
7
Id.
8
11/18 Tr. at 29:6-10.
9
JanCo FS 2, LLC v. ISS Facility Servs., Inc., 2024 WL 4002825, at *13 (Del. Super. Aug. 30,
2024) (D.I. 188) [“MSJ Opinion”].
10
11/18 Tr. at 206:5-7.
11
Id. at 207:3-7.
12
MSJ Opinion at *2.
13
Id. at *2.
2
to ISS.14 Pitcock received a bonus, pursuant to his employment agreement with ISS,

for facilitating the deal between JanCo and ISS.15

Morten Heding is one of ISS’s Vice Presidents of Finance.16 Katie Holloway

is ISS’s Senior Vice President of Finance.17 Kimberly Wray is ISS’s Vice President

of People and Culture.18

C. ISS Sought to Sell the Business.

In early 2020, ISS began exploring the sale of the Business.19 In October

2020, ISS hired Harris Williams to serve as ISS’s investment banker and financial

advisor for the sale of the Business.20 ISS also hired Ernst & Young to prepare a

quality of earnings report for the sale of the Business.21

In late 2020, Harris Williams contacted potential buyers, including

Argenbright, to solicit interest in an acquisition of the Business.22 Argenbright

submitted an Indication of Interest.23

14
Id.
15
11/19 Tr. at 151:19-153:5.
16
11/21 Tr. at 107:12-13.
17
Id. at 45:8-9.
18
11/20 Tr. at 181:10-11.
19
Pretrial Stip. at 9.
20
Id.
21
Id.
22
Id. at 9-10.
23
Id. at 10.
3
On March 12, 2021, Argenbright attended an ISS management presentation

regarding the Business.24 At that meeting, ISS explained that the Business suffered

from employee headcount decline and experienced high employee turnover.25

After a bidding process, Argenbright submitted a Letter of Intent (“LOI”) on

May 27, 2021 in which Argenbright proposed to purchase the Business for $80

Million (the “Purchase Price”).26 The proposed Purchase Price reflected a 6.15x

multiplier of the Business’ Normalized EBITDA.27 The LOI called for $75 Million

of the Purchase Price to be paid up front, with $5 Million deferred.28 ISS accepted

the LOI, and Argenbright formed JanCo to complete the deal.29

On July 12, 2021, ISS rolled out its new human resources system,

People@ISS, in the United States.30 ISS faced challenges implementing

People@ISS, including delays in onboarding.31

ISS uses E-Verify, a process for verifying the work authorization status of a

prospective employee.32 During the summer of 2021, ISS worked with the

24
Id.
25
JX 6 at 16.
26
Pretrial Stip. at 11.
27
Id.
28
Id.
29
Id.
30
Id. at 11-12.
31
11/18 Tr. at 210:23-211:15.
32
11/20 Tr. at 193:5-11.
4
Department of Homeland Security (“DHS”) to open a new E-Verify account and to

terminate ISS’s old account.33

D. The Parties Engaged in Due Diligence.

JanCo hired Virtas Partners (“Virtas”) to serve as its financial advisor and to

conduct financial due diligence.34 JanCo hired BDO, a consulting firm, to conduct

human resources, information technology, and tax due diligence.35

In July and August 2021, JanCo and ISS employees met in Atlanta, Georgia

to discuss the state of the Business.36 At these meetings, ISS operational leaders told

JanCo that the Business had 400 to 500 open positions and was using temporary

labor and overtime to cover.37 ISS further informed JanCo about the operational

issues it faced due to the People@ISS rollout.38 In August 2021, Heding and

Holloway exchanged messages via Microsoft teams in which they acknowledged

issues with the Business’ financial condition.39

JanCo’s advisors’ diligence reports noted the Business’ staffing issues. In a

July 4, 2021 draft report, Virtas emphasized problems with the Business’ staffing

and recruiting and noted there was “not a non-trivial number” of open positions.40

33
DX 71, DX 154, PX 344.
34
Pretrial Stip. at 12.
35
Id. at 12.
36
JX 18; JX 21; JX 34; 11/19 Tr. at 213:2-8.
37
11/18 Tr. at 157:6-12, 165:16-167:10, 259:14-265:1.
38
11/18 Tr. at 265:2-22, 293:9-19; 11/19 Tr. at 183:6-184:7, 214:23-216:7.
39
PX 326.
40
DX 88 at 2-3.
5
BDO warned JanCo of “overall labor shortages (consistent with the market) which

has led to an increase in overtime hours” at the Business.41

Before closing, ISS provided JanCo with an updated profit and loss statement,

trial balances, and other financial reports covering July, August, September, and

October 2021.42 The trial balances included all of ISS’s general ledger accounts,

including line items for temporary labor.43 JanCo was able to easily run its own

monthly profit and loss statements from the trial balances,44 which enabled JanCo to

identify the Business’ increased use of temporary labor in an email sent on

November 21, 2021.45 The information in those financial reports for July-October

2021 aligned with the Business’ historical performance.46

E. The Parties Signed the APA.

On September 20, 2021, the Parties signed the APA (the “Signing”).47 The

APA adopted the LOI’s Purchase Price of $80 Million.48

41
JX 17 at 10.
42
DX 472-475; DX 478; DX 485.
43
DX 475.
44
11/18 Tr. 168:15-179:16; 11/19 Tr. 90:17-91:19.
45
See DX 472 at 1 (identifying an increase in temporary labor in a November 21, 2021, email);
Pretrial Stip. at 12 (noting the Closing date of November 30, 2021).
46
11/18 Tr. at 183:11-18, 185:9-13; 11/19 Tr. at 13:7-21.
47
Pretrial Stip. at 12.
48
JX 43 § 2.4 [“APA”]. The APA does not identify a particular EBITDA multiplier used to set the
Purchase Price. JanCo contends the Purchase Price reflected a 6.4x multiplier of the Business’
estimated $12.5 million Normalized EBTIDA established by Virtas during due diligence. D.I. 235
at 6 [“JanCo Opening”]; D.I. 221 at 10 [“ISS Opening”].
6
Section 2.4(b) of the APA provides that JanCo retained $5 million of the $80

million as a holdback amount to be reduced by any indemnifiable losses (the

“Holdback Amount”).49

Section 2.5 of the APA provides a mechanism for adjusting the Purchase Price

based on the discrepancy between the Business’ targeted working capital and actual

working capital identified after closing.50 If the actual working capital exceeded the

target working capital by more than $100,000, ISS would be entitled to the difference

between the target working capital plus $100,000 and the actual working capital.51

If the actual working capital was over $100,000 less than the target, JanCo would be

entitled to the difference between the target working capital minus $100,000 and the

actual working capital.52

Article 4 of the APA contains various representations by ISS. Section 4.6

provides:

Attached hereto as Schedule 4.6 are Sellers’ (i) unaudited divisional
balance sheets and (ii) unaudited divisional statements of income for
the Target Accounts for the years ended December 31, 2019, December
31, 2020, and as of the period ending July 31, 2021 (the “Financial
Statements”). The Financial Statements are true, complete and correct
in all material respects, and present fairly in all material respects the
financial condition and the results of operation of the Target Accounts
as of the dates of such statements and for the periods then ended and

49
APA § 2.4(b).
50
Id. § 2.5.
51
Id. § 2.5(e).
52
Id.
7
have been prepared in accordance with International Financial
Reporting Standards.53

Section 4.7 of the APA provides:

The books and records of Sellers relating to the Purchased Assets and
Assumed Liabilities, are true and correct in all material respects, have
been maintained in accordance with good business practice and in
accordance with all laws and other requirements applicable to their
business and operations.54

Section 4.10 of the APA (the “Absence of Changes Representation”) provides:

Since June 30, 2021, and solely with respect to the Purchased Assets
and Assumed Liabilities, Sellers have operated only in the Ordinary
Course of Business and have not:
…
(e) suffered any damage, destruction, or Loss to any asset or suffered
any other change, development, or event (individually or in the
aggregate) that has had, or could be reasonably expected to have, a
Material Adverse Effect on the Target Accounts;
(f) increased the rate of compensation payable or to become payable by
it to any of its officers, directors, key employees, or agents, except for
general hourly rate increases and normal merit increases in each case
done in the Ordinary Course of Business;
(g) made or agreed to make any accrual or arrangement for or payment
of any bonus, special compensation, or severance pay of any kind to
any shareholder, officer, director, employee or agent;
…
(l) suffered or experienced any other event or circumstance which has
resulted in a Material Adverse Effect on it or which is reasonably
expected to result in such a Material Adverse Effect;
(o) entered into any agreement or other obligation to do any of the
foregoing.55

53
Id. § 4.6.
54
Id. § 4.7.
55
APA § 4.10.
8
Section 4.20 provides:

(a) Schedule 4.20(a) sets forth a complete and correct list of all salaried
employees who provide services to the Target Accounts, showing for
each: (i) name; (ii) hire date; (iii) current job title; (iv) actual base salary,
bonus, commission or other remuneration paid during 2020; (v) 2021
base salary level and 2021 target bonus; (vi) whether such employee is
on an active or inactive status; (vii) the location at which such employee
principally works; (viii) whether such employee is treated as exempt or
non-exempt, (ix) any agreements, arrangements or benefits provided to
such employee other than standard agreements, (x) other perquisites,
including, without limitation, vehicle allowance or the provision of a
company vehicle, and (xi) ISS employee identification number.
…
(d) Each Seller is in compliance, in all respects, with all applicable laws
relating to the employment of labor with respect to any employees
providing services to the Target Accounts employed by any Seller or
any employees employed by a third party and leased to any Seller,
including the Civil Rights Act of 1964 (Title VII), the National Labor
Relations Act, the Occupational Safety and Health Act of 1970, the
Family and Medical Leave Act of 1993, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Affordable Care
Act, and any similar state laws. There are no charges that have been
filed by the U.S. Equal Employment Opportunity Commission or any
state Department of Labor or similar state Governmental Authority
against any Seller. No Seller has received any notice or other
communication from any Governmental Authority or other Person
regarding any violation or alleged violation of any applicable law
relating to hiring, recruiting, employing (or continuing to employ)
anyone not authorized to work in the United States, solely relating to
any Seller’s provision of services to the Target Accounts.
…
(i) With respect to each employee of Sellers, to Sellers’ Knowledge each
such employee is either a United States citizen or has a current and valid
work visa or otherwise has the lawful right to work in the United States.
Each Seller is in compliance with and not in violation of the terms and
provisions of applicable laws relating to immigration, including the

9
Immigration Reform and Control Act of 1986, and all related
regulations promulgated thereunder in all material respects.56

Seller’s Knowledge is defined as “the actual knowledge of any of Jason Pitcock,

Morten Heding, Katie Holloway, John Sumner, Billie Ann Reader or Mickay Hall,

after reasonable inquiry.”57

Section 4.25 (the “Catchall Representation”) provides: “No representation or

warranty made by Sellers in this Article 4, nor any schedule attached hereto contains

any untrue statement of material fact or omits to state a material fact necessary to

make the statements contained therein not misleading.”58

The APA has an indemnification provision whereby ISS agrees to indemnify

JanCo for “Losses” arising out of any breach of ISS’s representations and

warranties.59

The APA contains no representation that ISS used E-Verify to audit every

employee of the Business. The APA also contains no representation regarding the

Business’ total number of employees.

Section 6.1 of the APA provides that ISS was to acquire consent agreements

from the Business’ top customers authorizing the assignment of the customer

contracts to JanCo.60 If ISS had not obtained consent agreements from customers

56
Id. § 4.20.
57
Id. § 9.1.
58
Id. § 4.25.
59
Id. § 7.2(a).
60
Id. § 6.1(d).
10
by closing, ISS would still be entitled to a Purchase Price adjustment for obtaining

these consents after closing, provided they obtained consent within 120 days of

closing.61 For obtaining the consent of Ingram Micro, a customer of the Business,

within 120 days of closing, ISS would be entitled to a $1,494,747 adjustment to the

Purchase Price.62

Section 7.4 of the APA outlines the limits of indemnification: Section 7.4(a)

states JanCo is not entitled to any indemnification unless it can demonstrate its losses

exceed $500,000;63 Section 7.4(b) states JanCo may not collect more than 12.5% of

the Purchase Price from indemnification.64

Section 7.5(a) of the APA contains a materiality scrape (the “Materiality

Scrape”):

For purposes of the indemnities . . . all qualifications and limitations set
forth in the Parties’ representations and warranties as to “materiality,”
“Material Adverse Effect”, “Material Adverse Change” and words of
similar import shall be disregarded in determining whether there shall
have been any inaccuracy in or breach of any representations and
warranties in this [APA].65

“Material Adverse Effect” is defined in Section 9.1 of the APA:

“Material Adverse Effect”…means any effect, condition, circumstance
or change that individually or when taken together with other
conditions, effects or circumstances in the aggregate has had a material
adverse effect on the Target Accounts, Purchased Assets (including
61
APA § 6.1(d).
62
APA Schedule 2.2(f).
63
APA § 7.4(a).
64
Id. § 7.4(b).
65
Id. § 7.5(f).
11
intangible assets), liabilities, condition (financial or otherwise),
properties or results of operations of the Sellers relating to the Target
Accounts in the aggregate, or to the ability of any Party to consummate
timely the transactions contemplated hereby; provided that none of the
following shall be deemed to constitute, and none of the following shall
be taken into account in determining whether there has been, a Material
Adverse Effect or Material Adverse Change: (a) any adverse change,
event, development, or effect arising from or relating to: (1) financial,
banking, or securities markets (including any disruption thereof and any
decline in the price of any security or any market index), (2) the
industry in which Sellers operate and the United States economy as a
whole, to the extent such change, event, development or effect
described in this clause does not directly impair or render Sellers
substantially inoperative or have a disproportionate effect on Sellers
(relative to other participants in the industry), (3) the taking of any
action contemplated by this Agreement and the other agreements
contemplated hereby or (4) any business disruption or material Losses
as a result of COVID-19, or expenses and costs incurred in complying
with COVID-19 Control Measures; provided, further, that, the
expiration or termination of any contract with any customer listed on
Schedule 4.22 shall be deemed to be a Material Adverse Effect and
Material Adverse Change.66

The definition of Material Adverse Effect is circular, containing “material adverse

effect” within the definition.67

7.4(e) limits indemnification, barring damages based on “lost profits” and

“diminution in value.”68 Under Section 7.7 of the APA, limitations on damages

provided in the APA do not apply in cases of “fraud or willful misconduct.”69

66
Id. § 9.1.
67
To employ a term used by the Court of Chancery, albeit in a different context, “such is the verbal
jiu-jitsu of transaction agreements.” AB Stable VIII LLC v. Maps Hotels & Resorts One LLC, 2020
WL 7024929, at *53 (Del. Ch. Nov. 30, 2020) (citation modified), judgment entered, (Del. Ch.
2021), and aff’d, 268 A.3d 198 (Del. 2021).
68
APA § 7.4(e).
69
Id. § 7.7
12
F. The Parties Closed the Deal.

The Parties closed the transaction on November 30, 2021 (the “Closing”).70

JanCo paid $63,800,693.65 to ISS; placed $11,250,057 into escrow for the

unobtained consents from the Business’ customers, including that of Ingram Micro,

and retained the $5,000,000 Holdback Amount.71

At Closing, the Parties also executed the Transition Services Agreement,

pursuant to which ISS continued to provide back-office functions for the Business

for several months as JanCo took over operations.72 Also at Closing, the Parties

executed an amendment to the APA (the “Amendment”).73

G. Events After Closing

After Closing, JanCo became concerned about the decline in revenue

generated by the Business.74 Evidence at trial indicated JanCo’s EBITDA for the

year after Closing was about $10 million, which would be a decline from the $12.5

million pre-transaction Normalized EBITDA alleged by JanCo.75

70
Pretrial Stip. at 12.
71
Id.
72
Id.; JX 50.
73
Id. While the Pretrial Stipulation references the Amendment, the Amendment itself was not
admitted into evidence. See Id. at 27 (“Only exhibits that are properly admitted into evidence
during trial may be attached to, referenced in, or cited in post-trial briefs.”). As discussed herein,
ISS is therefore unable to assert a claim regarding the “LaSalle Equipment taxes.” Infra at
Discussion § I.
74
PX 481.
75
11/20 Tr. at 13:2-17:4.
13
After closing, ISS worked to obtain outstanding consent agreements from

their former customers. ISS obtained a consent agreement from Ingram Micro on

January 30, 2022.76 The following day, ISS received a reciprocal consent request

from Ingram Micro in connection with their partial divestiture to CEVA Logistics.77

Jason Pitcock forwarded it to JanCo.78 After consenting to ISS’s assignment to

JanCo, Ingram Micro divested part of their business to CEVA, who ultimately

discontinued purchasing services from JanCo.79

ISS calculated the difference between the Business’ actual working capital and

target working capital, as of Closing, at $3,490,000, and sent the same figure and

calculations to JanCo in October 2022.80 A JanCo employee sent the working capital

figure and calculation to its auditors, stating “The attached is the ISS calculation of

Net Working Capital Adjustment. We agreed to the highlighted amount for the

adjustment (payment to ISS of $3,490K). Per the attached email you can see that

there were some additional items outside of working capital that were still in

dispute.”81 In 2022, JanCo took a $3,554,694 non-cash write-off.82

76
DX 258.
77
DX 261.
78
DX 267; 11/19 Tr. 228:6-230:18.
79
11/19 Tr. 230:19-231:1.
80
DX 404.
81
Id.
82
PX 650 at 17.
14
On November 23, 2022, and February 28, 2023, JanCo issued Claims Notices

to ISS, asserting indemnification claims for various alleged breaches of the APA.83

H. Procedural History

ISS filed a Complaint against JanCo in the Court of Chancery on December

27, 2022, asserting JanCo failed to pay Purchase Price adjustments owed to ISS and

seeking a declaration that JanCo is not entitled to indemnification.84 JanCo moved

to dismiss for lack of equitable jurisdiction pursuant to Court of Chancery Rule

12(b)(1).85 Concurrent to briefing the motion, on March 3, 2023, JanCo filed a

Complaint in the Superior Court of Delaware.86 On June 20, 2023, the Court of

Chancery granted JanCo’s motion to dismiss the Complaint in Chancery, with leave

to transfer to Superior Court subject to 10 Del. C. § 1902.87 The Court of Chancery

granted the transfer to the Complex Commercial Litigation Division on July 6,

2023.88 On July 7, 2023, ISS filed its transferred Complaint in Superior Court.89 On

September 26, 2023, this Court granted an Order of Consolidation, consolidating

both actions.90

83
Pretrial Stip. at 13.
84
ISS Facility Servs. Inc. v. JanCo FS 2, LLC, 2022-1197-SG.
85
2022-1197-SG, D.Is. 7, 12.
86
JanCo FS 2, LLC v. ISS Facility Servs., Inc., C.A. N23C-03-005 AML CCLD. On May 11,
2023, the case was reassigned to Judge Adams after then-Judge LeGrow became a Justice of the
Supreme Court of Delaware. D.I. 65.
87
2022-1197-SG, D.I. 48.
88
2022-1197-SG, D.I. 51.
89
ISS Facility Servs., Inc. v. JanCo FS 2, LLC, C.A. N23C-07-036 MAA CCLD.
90
N23C-03-005 MAA CCLD, D.I. 104; N23C-07-036 MAA CCLD, D.I. 3.
15
On November 7, 2023, ISS filed an Amended Complaint asserting five

counts:91 (I) Breach of Contract (Failure to Provide Escrow Instructions);92 (II)

Unjust Enrichment (in the Alternative to Count I);93 (III) Breach of the Implied

Covenant (in the Alternative to Count I);94 (IV) Breach of Contract (Failure to Pay

Working Capital Adjustment and Purchase Price Adjustments);95 and (V)

Declaratory Judgment.96 On November 21, 2023, JanCo filed an Answer and

Affirmative Defenses to ISS’s Amended Complaint.97

On November 22, 2023, JanCo filed an Amended Complaint alleging eight

counts:98 (I) Fraud/Intentional Misrepresentation;99 (II) Indemnification for

Breaches of Representations and Warranties;100 (III) Breach of Transition Services

Agreement;101 (IV) Declaratory Judgment (Declaring Escrow Funds Relating to

FAA and Pima County to be Released to Purchasers);102 (V) Breach of Duty of Good

Faith and Fair Dealing (Escrow Funds Relating to Ingram Micro);103 (VI)

Indemnification for Excluded Liability and Breach of Representation and Warranty

91
D.I. 128.
92
Id. ¶¶ 75-80.
93
Id. ¶¶ 81-87.
94
Id. ¶¶ 88-94.
95
Id. ¶¶ 95-101.
96
Id. ¶¶ 102-06.
97
D.I. 133.
98
D.I. 134.
99
Id. ¶¶ 207-26.
100
Id. ¶¶ 227-42.
101
Id. ¶¶ 243-45.
102
Id. ¶¶ 246-50.
103
Id. ¶¶ 251-59.
16
(Avnet);104 (VII) Breach of Asset Purchase Agreement (Covenant Not to Solicit);105

and (VIII) Intentional Interference with Contractual Relations.106 On December 8,

2023, ISS filed an Answer and Affirmative Defenses to JanCo’s Amended

Complaint.107

On March 29, 2024, both ISS and JanCo filed motions for summary

judgment.108 The Court resolved the Parties’ motions for summary judgment on

August 30, 2024.109 The Memorandum Opinion on the Motions for Summary

Judgment resolved JanCo’s Counts IV-V and ISS’s Counts I-III.110

The Court held a four-day bench trial from November 18-21, 2024.111 The

Parties filed opening post-trial briefs on January 24, 2025.112 The Parties filed

answering briefs on February 14, 2025.113 The Court heard post-trial oral argument

on February 25, 2025.114 At the Court’s direction, the Parties filed cross-

supplemental briefs regarding the function of the Materiality Scrape on March 14,

104
D.I. 134 at ¶¶ 260-64.
105
Id. ¶¶ 265-68.
106
Id. ¶¶ 269-76.
107
D.I. 140.
108
D.Is. 156; 159.
109
MSJ Opinion.
110
Id. at *33.
111
D.I. 211.
112
D.Is. 219-221.
113
D.Is. 230-231.
114
D.I. 233.
17
2025, and JanCo filed corrected post-trial briefs that same day.115 On July 7, 2025,

JanCo filed a letter enclosing supplemental authority.116

STANDARD OF REVIEW

In a bench trial, the judge, as fact-finder,117 “must assess the credibility of each

witness and determine the weight given to the testimony.”118 To reach a verdict on

the issues, the court considers admitted exhibits, the testimony of witnesses, the

Parties’ arguments, and Delaware law.119 The court can consider “each witness’s

means of knowledge; strength of memory; opportunity to observe; how reasonable

or unreasonable the testimony is; whether it is consistent or inconsistent; whether it

has been contradicted; the witnesses’ biases, prejudices, or interests; the witnesses’

manner or demeanor on the witness stand; and all circumstances that according to

the evidence, could affect the credibility of the testimony.”120 After reviewing the

evidence presented, the court is “free to accept or reject any and or all sworn

testimony.”121

115
D.Is. 234-237. When referencing JanCo’s post-trial briefs, the Court will only reference the
corrected briefs (D.Is. 235-236). The post-trial argument transcript, which is integral to this
Court’s decision, was made available on June 6, 2025. D.I. 241.
116
D.I. 242.
117
See, e.g., Shallcross Mortg. Co. v. Ewing, 2024 WL 3738713, at *1 (Del. Super. Aug. 9,
2024) (citation omitted).
118
Williams v. Bay City, Inc., 2009 WL 5852851, at *1 (Del. Super. Dec. 23, 2009) (internal
citations omitted).
119
Outbox Sys., Inc. v. Trimble, Inc., 2024 WL 1886089, at *7 (Del. Super. Apr. 30, 2024).
120
Zenith Energy Terminals Joliet Hldgs. LLC v. CenterPoint Props. Tr., 2024 WL
3570165, at *3 (Del. Super. July 29, 2024) (citation omitted).
121
Pardo v. State, 160 A.3d 1136, 1150 (Del. 2017).
18
A party bears the burden of proving its claims by a preponderance of the

evidence.122 Proof by a preponderance of the evidence means “proof that something

is more likely than not.”123 If the evidence presented by the Parties “is inconsistent,

and the opposing weight of the evidence is evenly balanced, then ‘the party seeking

to present a preponderance of the evidence has failed to meet its burden.’”124 “All

elements of a claim must be proven by a preponderance of the evidence, including

the plaintiff’s damages.”125

DISCUSSION

A. ISS Breached Sections 4.10(e) and 4.10(l) of the APA.

JanCo contends ISS breached Sections 4.10(e) and 4.10(l) of the APA.126

Section 4.10(e) provides:

122
See, e.g., Navient Sols., LLC v. BPG Off. P’rs XIII Iron Hill LLC, 2023 WL 3120644, at
*10 (Del. Super. Apr. 27, 2023) (citation omitted).
123
Feenix Payment Sys., LLC v. Blum, 2024 WL 2768386, at *10 (Del. Super. May 29,
2024).
124
Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513, 545 (Del. Super. 2005)
(quoting Eskridge v. Voshell, 593 A.2d 589 (Del. 1991) (TABLE)), aff ’d, 886 A.2d 1278
(Del. 2005).
125
Buck v. Viking Hldg. Mgmt. Co. LLC, 2024 WL 4352368, at *21 (Del. Super. Sept. 30,
2024) (citation omitted).
126
JanCo Opening at 23.
127
APA § 4.10(e) (citation modified).
19
Section 4.10(l) provides:

Since June 30, 2021, Sellers have operated only in the Ordinary Course
of Business and have not suffered or experienced any other event or
circumstance which has resulted in a Material Adverse Effect on it or
which is reasonably expected to result in such a Material Adverse
Effect;128

JanCo contends “massive” changes occurred between June 30, 2021, and Closing,

as ISS saw increases in labor costs and struggled with the implementation of

People@ISS.129

1. The Materiality Scrape expands the breadth of the Absence of Changes
Representation.

“Material Adverse Effect,” as used in Section 4.10, is capitalized, indicating

a defined term. The APA defines Material Adverse Effect:

128
Id. § 4.10(l) (citation modified).
129
JanCo Opening at 23-24.
130
APA § 9.1.
20
The definition of Material Adverse Effect is circular, containing “material adverse

effect” within the definition, but the latter is in lowercase, indicating an intent for

the Court to apply the term as it is defined under Delaware law.131

To understand how these provisions work together, the Court will first insert

the definition of Material Adverse Effect wherever the term “Material Adverse

Effect” is found in the APA.132 When the definition of Material Adverse Effect is

inserted into Section 4.10(e), the result is as follows:

Since June 30, 2021, Sellers have operated only in the Ordinary Course
of Business and have not suffered any damage, destruction, or Loss to
any asset or suffered any other change, development, or event
(individually or in the aggregate) that has had, or could be reasonably
expected to have, any effect, condition, circumstance or change that
individually or when taken together with other conditions, effects or
circumstances in the aggregate has had a material adverse effect on the
Target Accounts;133

When the definition is inserted into Section 4.10(l), the result is as follows:

Since June 30, 2021, Sellers have operated only in the Ordinary Course
of Business and have not suffered or experienced any other event or
circumstance which has resulted in any effect, condition, circumstance
or change that individually or when taken together with other
conditions, effects or circumstances in the aggregate has had a material
adverse effect on the Target Accounts, Purchased Assets (including
intangible assets), liabilities, condition (financial or otherwise),
properties or results of operations of the Sellers relating to the Target
Accounts in the aggregate, or to the ability of any Party to consummate
timely the transactions contemplated hereby on it or which is
131
Norton v. K-Sea Transp. P’rs L.P., 67 A.3d 354, 360 (Del. 2013) (“We give words their plain
meaning unless it appears that the parties intended a special meaning.”) (citation omitted).
132
See AB Stable, 2020 WL 7024929, at *54 n.200 (“In a contract, a defined term simply serves
as a convenient substitute for the definition.” (citation modified)).
133
APA §§ 4.10(e), 9.1 (emphasis added) (citation modified).
21
reasonably expected to result in any effect, condition, circumstance or
change that individually or when taken together with other conditions,
effects or circumstances in the aggregate has had a material adverse
effect on the Target Accounts, Purchased Assets (including intangible
assets), liabilities, condition (financial or otherwise), properties or
results of operations of the Sellers relating to the Target Accounts in the
aggregate, or to the ability of any Party to consummate timely the
transactions contemplated hereby;134

Complicating matters, the APA contains the Materiality Scrape, which is

presented in Section 7.5(f):

Under JanCo’s interpretation, the Materiality Scrape’s effect is to reduce JanCo’s

burden in asserting a claim under Section 4.10 such that JanCo need only prove that

it suffered some adverse effect, but not necessarily a material one.136

If “materiality” or “words of similar import” are scraped from Section 4.10(e)

after the definition of “Material Adverse Effect” is inserted, the result is as follows:

134
Id. §§ 4.10(l), 9.1 (emphasis added) (citation modified).
135
APA § 7.5(f).
136
JanCo Opening at 24.
22
circumstances in the aggregate has had an adverse effect on the Target
Accounts;137

When the same treatment is applied to Section 4.10(l), the result is as follows:

Since June 30, 2021, Sellers have operated only in the Ordinary Course
of Business and have not suffered or experienced any other event or
circumstance which has resulted in any effect, condition, circumstance
or change that individually or when taken together with other
conditions, effects or circumstances in the aggregate has had an
adverse effect on the Target Accounts, Purchased Assets (including
intangible assets), liabilities, condition (financial or otherwise),
properties or results of operations of the Sellers relating to the Target
Accounts in the aggregate, or to the ability of any Party to consummate
timely the transactions contemplated hereby on it or which is
reasonably expected to result in any effect, condition, circumstance or
change that individually or when taken together with other conditions,
effects or circumstances in the aggregate has had an adverse effect on
the Target Accounts, Purchased Assets (including intangible assets),
liabilities, condition (financial or otherwise), properties or results of
operations of the Sellers relating to the Target Accounts in the
aggregate, or to the ability of any Party to consummate timely the
transactions contemplated hereby;138

In both cases, the result is that advocated by JanCo—the materiality qualifier is

removed from the Absence of Changes Representation—though JanCo skips the key

step of implementing the full definition of Material Adverse Effect before scraping

“material.”139

ISS argues this broad reading of the Section 4.10 representations is incorrect.

ISS first contends the implementation of Section 7.5(f)’s Materiality Scrape to

137
APA §§ 4.10(e), 9.1, 7.5(f) (emphasis added) (citation modified).
138
Id. §§ 4.10(l), 9.1, 7.5(f) (emphasis added) (citation modified).
139
D.I. 234 at 4 [“JanCo Supp.”].
23
Sections 4.10(e) and 4.10(l) reveals an ambiguity, as Sections 4.10(e) and 4.10(l)

become nonsensical.140 As ISS presents Sections 4.10(e) and 4.10(l) after having

removed “Material Adverse Effect”:

[Section 4.10(e):] Since June 30, 2021, Sellers have operated only in
the Ordinary Course of Business and have not suffered any damage,
destruction, or Loss to any asset or suffered any other change,
development, or event (individually or in the aggregate) that has had,
or could be reasonably expected to have, a [] on the Target Accounts;141
…

[Section 4.10(l):] Since June 30, 2021, Sellers have operated only in the
Ordinary Course of Business and have not suffered or experienced any
other event or circumstance which has resulted in a [] on it or which is
reasonably expected to result in such a [];142

Such a nonsensical result only occurs when one skips past the insertion of the

definition of Material Adverse Effect and instead strikes the capitalized term before

defining it.

The use of a defined term, “Material Adverse Effect,” indicates a shorthand

implementation of the entire definition for “Material Adverse Effect.”143 Inserting

the definition before employing the Materiality Scrape is the proper order of

operations, as it prevents Sections 4.10(e) and 4.10(l) from becoming illegible.

140
D.I. 237 at 1 [“ISS Supp.”].
141
APA §§ 4.10(e), 7.5(f) (citation modified).
142
Id. §§ 4.10(l), 7.5(f) (citation modified).
143
See AB Stable, 2020 WL 7024929, at *54 n.200 (“In a contract, a defined term simply serves
as a convenient substitute for the definition.” (citation modified)).
24
ISS asserts JanCo’s proposed reading of Sections 4.10(e) and 4.10(l)—a

reading with which the Court functionally agrees—is unreasonable, as it renders the

representations overbroad.144 This argument, however, ignores the existence of

boundaries on indemnification, which evidences the Parties’ risk calculation in

negotiating the APA.145

The vast potential for indemnification enabled by the broad Absence of

Changes Representation is curtailed by the presence of a “basket” (a minimum

indemnification threshold) and a “cap” (a maximum indemnification threshold).

Under Section 7.4(a), JanCo is not entitled to any indemnification unless it can

demonstrate its losses exceed $500,000—the “basket.”146 Under Section 7.4(b),

JanCo may not collect more than 12.5% of the Purchase Price from

indemnification—the “cap.”147 The indemnification limits presented in Section 7.4

do not apply to cases of fraud or willful misconduct.148

144
ISS Supp. at 1.
145
ISS also contends a broad reading of the representations in Section 4.10 would render the due
diligence process superfluous. ISS Supp. at 6. The Court disagrees. JanCo’s strategic approach
in negotiating broad representations would have been informed by the information it obtained in
due diligence, which occurred before Signing. The Court will not punish JanCo for succeeding at
the bargaining table. JanCo obtained broad representations from ISS but accepted some risk—that
any damages it sustained above the Section 7.4(b) cap would be limited by the cap, and that certain
damage classes were not indemnifiable. APA § 7.4. Such a bargain was presumably informed by
the information obtained during due diligence.
146
APA § 7.4(a).
147
Id. § 7.4(b).
148
Id. § 7.7.
25
The existence of the basket and cap clauses indicates the Parties did not intend

for a material adverse effect to be proven before indemnification is available; the

lower “basket” threshold would likely be irrelevant if JanCo needed to show a

material adverse effect, as JanCo would need to prove damages exceeding the cap

imposed by the APA, let alone exceeding the basket.149

The APA also provides that certain classes of damages, such as lost profits and

diminution of value, are not indemnifiable, further evidencing the Parties’ risk

calculation.150 Damages for breach of the Absence of Changes Representation are

therefore limited by another provision in the APA, even if the breach condition is a

low threshold.

For all of these reasons, the APA does not require JanCo to show a material

adverse effect in order to prove a breach of the Absence of Changes Representation.

2. ISS breached the Absence of Changes Representation.

JanCo needed to prove that changes in the Business between June 30, 2021,

and Closing resulted in some adverse effect. JanCo cleared this low hurdle by a

preponderance of the evidence. Through an ISS chart that took center stage at trial,

149
See Akorn, Inc. v. Fresenius Kabi AG, 2018 WL 4719347, at *53 (Del. Ch. Oct. 1, 2018), aff’d,
198 A.3d 724 (Del. 2018) (“In their influential treatise, Lou R. Kling and Eileen T. Nugent observe
that most courts which have considered decreases in profits in the 40% or higher range found a
material adverse effect to have occurred. Chancellor Allen posited that a decline in earnings of
50% over two consecutive quarters would likely be an MAE. Courts in other jurisdictions have
reached similar conclusions.” (internal citations omitted)).
150
APA § 7.4(e).
26
JanCo presented evidence indicating the Business suffered an increase in temporary

labor as a percentage of revenue, which occurred between June 30, 2021 and

Closing.151 JanCo further presented evidence indicating the People@ISS rollout

(during July of 2021) did not go smoothly for ISS’s HR department,

“compound[ing]” ISS’s operations and staffing issues.152

Ultimately, because the Absence of Changes Representation is so broad once

materiality has been scraped, JanCo has proved that ISS breached the Absence of

Changes provision. Nonetheless, as discussed below, although JanCo has shown

that the condition of the Business changed, JanCo cannot prove the change resulted

in particular damages or that its breach claim escapes the APA’s restrictions on

indemnification.

151
JanCo Opening at 9; 11/18 Tr. at 103:19-105:15; 11/21 Tr. at 198:11-199:11; PX 424 at 10.
Temporary labor as a percentage of revenue rose from less than 0.5% in January 2021 to 4.5% in
October 2021. PX 424 at 10.
152
JanCo Opening at 3; PX 303; PX 304; PX 311; PX 313.
27
B. JanCo Failed to Prove ISS Provided False or Misleading Financial
Statements.153

JanCo contends ISS breached the APA by providing false financial

statements.154 Section 4.6 of the APA provides:

Applying the Materiality Scrape, Section 4.6 of the APA provides:

Attached hereto as Schedule 4.6 are Sellers’ (i) unaudited divisional
balance sheets and (ii) unaudited divisional statements of income for
the Target Accounts for the years ended December 31, 2019, December
31, 2020, and as of the period ending July 31, 2021 (the “Financial
Statements”). The Financial Statements are true, complete and correct
in all [] respects, and present fairly in all [] respects the financial
condition and the results of operation of the Target Accounts as of the
dates of such statements and for the periods then ended and have been

153
In its opening brief, JanCo also cites the language of Section 4.7 of the APA, in which ISS
represents that ISS’s books and records were accurate. JanCo Opening at 6. JanCo alleges that
ISS’s books and records were inaccurate but does not provide further argument or evidence.
Accordingly, argument that ISS breached Section 4.7 is deemed waived. See New Start Hldgs.,
LLC v. Zhou, 2024 WL 4039440, at *29 n. 411 (Del. Ch. Sept. 4, 2024) (noting that an argument
not raised in post-trial briefing is deemed waived), judgment entered, (Del. Ch. 2025). Even if
JanCo’s Section 4.7 claim were properly raised in post-trial briefing, JanCo produced insufficient
evidence at trial that the books and records provided by ISS were inaccurate or incomplete.
154
JanCo Opening at 24.
155
APA § 4.6.
28
prepared in accordance with International Financial Reporting
Standards.156

JanCo contends the financial statements provided by ISS did not accurately reflect

the “actual labor costs needed to service clients due to ISS’s understaffing,

exacerbated by the inability to timely onboard new hires through People@ISS.”157

JanCo produced insufficient evidence that the specific financial statements

discussed in Section 4.6 were false—that the math was facially incorrect or that the

accounting methodology was flawed. JanCo’s witnesses conceded they believed the

financial statements were accurate.158

JanCo contends the financial statements are misleading but employs data

showing the purported “actual labor costs” after the “as of” date listed in Section

4.6.159 The data on which JanCo relies is not included in the Section 4.6

representation. ISS cannot be held to have breached Section 4.6 based on data to

which the Section 4.6 representation does not apply.

JanCo further contends APA Schedule 4.6 misleadingly failed to include the

salaries of several highly compensated ISS employees.160 This allegation falls under

APA Section 4.6 or APA Section 4.25, the Catchall Representation.

156
APA §§ 4.6, 7.5(f).
157
JanCo Opening at 24.
158
11/18 Tr. at 134:16-136:19, 137:12-138:5, 139:5-15; 11/20 Tr. at 36:8-17.
159
See JanCo Opening at 9-21 (describing financial conditions after July 31, 2021).
160
JanCo Opening at 34.
29
APA Section 4.25 provides: “No representation or warranty made by Sellers

in this Article 4, nor any schedule attached hereto contains any untrue statement of

material fact or omits to state a material fact necessary to make the statements

contained therein not misleading.”161 After applying the Materiality Scrape,162

Section 4.25 provides: “No representation or warranty made by Sellers in this Article

4, nor any schedule attached hereto contains any untrue statement of [] fact or omits

to state a [] fact necessary to make the statements contained therein not

misleading.”163

Higdon testified that the income statement presented in Schedule 4.6 failed to

include the salaries of certain highly-compensated employees, because those

employees’ salaries were not included as accounting inputs for the financial

statements provided.164

Janco argues, in its Post-Trial Answering Brief, that “ISS introduced no

documents proving that cell J-612 [of Defendant’s Exhibit 495, which is a quality of

earnings report used to create Schedule 4.6] contained the full salaries for Pitcock,

Reader, and Hall.”165 This statement, however, is contradicted by the unrebutted trial

testimony of Heding. Heding, discussing Defendant’s Exhibit 495 (the quality of

161
APA § 4.25.
162
Id. § 7.5(f).
163
Id. §§ 4.25, 7.5(f).
164
11/19 Tr. at 38:14-39:22.
165
D.I. 236 [“JanCo Answering”] at 28.
30
earnings report (used to create Schedule 4.6)), testified that the salaries in question

were incorporated into the quality of earnings report.166 This unrebutted testimony

demonstrates that the Consolidated P&L tab of the quality of earnings report

documented the actual costs ISS incurred for the salaries Pitcock, Reader, and Hall

in the line item “Div adm salaries.”167

Given this unrebutted testimony, the Court is unconvinced that Schedule 4.6

is “misleading.” Schedule 4.6 contains an accurate financial statement based on the

inputs included, and JanCo presented insufficient evidence that the accounting

methodology was misguided or misapplied.168 JanCo accordingly cannot prove a

breach for “excess salaries.”169

JanCo has failed to prove a breach of Section 4.6 or Section 4.25 of the APA

by a preponderance of the evidence.

166
11/21 Tr. at 123:18-126:19, 129:10-131:14.
167
DX 495; 11/21 Tr. at 123:18-126:19, 129:10-131:14. Heding testified credibly at trial that J-
612 in the PL1 tab of DX 495 included Pitcock’s salary (approximately $320,000), and Reader and
Hall’s salaries (approximately $200,000 or $210,000 each). This totaled approximately $740,000,
which was less than the costs stated in “Div adm salaries” line ($867,000 for the TTM21). See
DX 495; 11/21 Tr. at 130:4-131:14.
168
Hudson’s Bay Co. Lux., S.A.R.L. v. JZ LLC, 2013 WL 1457019, at *11 (Del. Super. Mar. 11,
2013) (explaining that, where a materiality scrape impacts a financial representation, a litigant
needs to prove the financial statement either (1) were not prepared in accordance with generally
accepted accounting principles or (2) did not “fairly, completely and accurately present in all
respects” the financial position of their subject).
169
See JanCo Opening at 34 (discussing damages based on the allegedly misleading Schedule 4.6).
31
C. JanCo Failed to Prove a Breach of Section 4.20(a) of the APA.

JanCo contends ISS breached Section 4.20(a) of the APA by failing to disclose

“the deal bonuses promised to Pitcock and other operational leaders.” 170 Section

4.20(a) provides:

Schedule 4.20(a) sets forth a complete and correct list of all salaried
employees who provide services to the Target Accounts, showing for
each: (i) name; (ii) hire date; (iii) current job title; (iv) actual base salary,
bonus, commission or other remuneration paid during 2020; (v) 2021
base salary level and 2021 target bonus; (vi) whether such employee is
on an active or inactive status; (vii) the location at which such employee
principally works; (viii) whether such employee is treated as exempt or
non-exempt, (ix) any agreements, arrangements or benefits provided to
such employee other than standard agreements, (x) other perquisites,
including, without limitation, vehicle allowance or the provision of a
company vehicle, and (xi) ISS employee identification number.171

The only bonus discussed at trial was that of Jason Pitcock.172 JanCo essentially

alleges ISS’s representation was false, as it failed to include Pitcock’s bonus, but

JanCo fails to articulate how it was injured by the same. JanCo’s failure to allege

damages from ISS’s purported failure to disclose Pitcock’s bonus is fatal to JanCo’s

claim under Section 4.20(a).173

170
Id. at 24.
171
APA § 4.20(a).
172
11/19 Tr. at 152:10-153:5.
173
Arwood v. AW Site Servs., LLC, 2022 WL 705841, at *27 (Del. Ch. Mar. 9, 2022) (“To prevail
on a breach of contract claim, a party must prove the existence of a contractual obligation, the
breach of that obligation, and resulting damages.”) (citation omitted).
32
D. JanCo Failed to Prove a Breach Under Sections 4.10 (f), (g) and (o).

JanCo contends ISS breached Sections 4.10 (f), (g) and (o) of the APA by

entering into transaction bonus agreements after June 30, 2021.174 The relevant

sections of the APA are as follows:

Since June 30, 2021, and solely with respect to the Purchased Assets
and Assumed Liabilities, Sellers have operated only in the Ordinary
Course of Business and have not:
…
(f) increased the rate of compensation payable or to become payable by
it to any of its officers, directors, key employees, or agents, except for
general hourly rate increases and normal merit increases in each case
done in the Ordinary Course of Business;
(g) made or agreed to make any accrual or arrangement for or payment
of any bonus, special compensation, or severance pay of any kind to
any shareholder, officer, director, employee or agent;
…
(o) entered into any agreement or other obligation to do any of the
foregoing.175

JanCo contends ISS entered into transaction bonus agreements with personnel after

June 30, 2021, but does not provide evidentiary support for this claim.

Pitcock’s bonus was included as part of his employment contract from May

of 2021, before the start of the “Absence of Changes” period.176 Pitcock’s bonus

cannot support a breach of Section 4.10. JanCo provides no other evidentiary

citation to support its claim that ISS entered into bonus agreements with “other

174
JanCo Opening at 25.
175
APA § 4.10.
176
11/19 Tr. at 151:19-153:5.
33
personnel.”177 JanCo failed to prove a breach of Sections 4.10 (f), (g), or (o) by a

preponderance of the evidence.

E. JanCo Failed to Prove a Breach of the APA Provisions Related to Work
Authorization.

JanCo contends ISS breached the APA’s provisions related to work

authorization.178 APA Section 4.20(d) provides:

Each Seller is in compliance, in all respects, with all applicable laws
relating to the employment of labor with respect to any employees
providing services to the Target Accounts employed by any Seller or
any employees employed by a third party and leased to any Seller,
including the Civil Rights Act of 1964 (Title VII), the National Labor
Relations Act, the Occupational Safety and Health Act of 1970, the
Family and Medical Leave Act of 1993, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Affordable Care
Act, and any similar state laws. There are no charges that have been
filed by the U.S. Equal Employment Opportunity Commission or any
state Department of Labor or similar state Governmental Authority
against any Seller. No Seller has received any notice or other
communication from any Governmental Authority or other Person
regarding any violation or alleged violation of any applicable law
relating to hiring, recruiting, employing (or continuing to employ)
anyone not authorized to work in the United States, solely relating to
any Seller’s provision of services to the Target Accounts.179

Section 4.20(i) provides:

With respect to each employee of Sellers, to Sellers’ Knowledge each
such employee is either a United States citizen or has a current and valid
work visa or otherwise has the lawful right to work in the United States.
Each Seller is in compliance with and not in violation of the terms and
provisions of applicable laws relating to immigration, including the

177
JanCo Opening at 25.
178
Id. at 27-28.
179
APA § 4.20(d).
34
Immigration Reform and Control Act of 1986, and all related
regulations promulgated thereunder in all material respects.180

JanCo contends ISS hired employees who were not authorized to work in the United

States.181 Each time JanCo asserts or implies this claim in its opening post-trial

briefing, it fails to cite any evidence showing ISS hired employees who lacked

proper authorization.182 Such conclusory statements do not satisfy JanCo’s burden

of proof.

JanCo asserts ISS failed to E-Verify employees.183 As the above language

indicates, the APA does not require ISS to use E-Verify, it only contains

representations that ISS’s employees were authorized to work in the United States.

ISS’s alleged failure to use E-Verify cannot support a claim for breach.

JanCo asserts ISS’s E-Verify account was terminated by DHS.184 ISS’s

Kimberly Wray testified that one of ISS’s E-Verify accounts was terminated by DHS,

but not the active account ISS used, and only after ISS sought to close the terminated

account.185 The documents admitted into evidence support Wray’s testimony, as it

shows ISS’s efforts to open a new E-Verify account, to terminate the old account,

180
Id. § 4.20(i).
181
JanCo Opening at 20, 27-28.
182
See JanCo Opening at 19-21, 27-28. Section 4.20(i) is subject to a “Seller’s Knowledge”
qualifier, which is defined as the actual knowledge of various ISS employees. APA § 9.1. To
prove a breach of Section 4.20(i), JanCo needed to prove that said various ISS employees knew
ISS hired unauthorized workers. No testimony or evidence supports such a contention.
183
JanCo Opening at 20-21.
184
Id. at 21.
185
11/20 Tr. at 202:10-204:15.
35
and E-Verify’s confirmation of those same steps.186 The evidence does not indicate

an ISS E-Verify account was terminated for misconduct before Signing or before

Closing.187 Without sufficient evidence that ISS “received any notice or other

communication from [E-Verify and DHS] regarding any violation or alleged

violation of any applicable law relating to hiring, recruiting, employing (or

continuing to employ) anyone not authorized to work in the United States,” JanCo

has not proved a breach of APA Section 4.20(d).

JanCo contends ISS did not deliver the total number of employees JanCo

expected.188 The APA contains no representation regarding the number of

employees. As ISS notes, employee turnover was “around 100%,” so ISS instead

represented the number of salaried employees.189 JanCo does not claim the list of

salaried employees was inaccurate. Without a representation on the total number of

employees, JanCo’s claim regarding the employee count fails.

JanCo failed to prove any breach of APA Sections 4.20(d) and 4.20(i).

F. JanCo’s Fraud and Willful Misconduct Claims Fail.

JanCo contends ISS committed fraud and willful misconduct by concealing

the decline of the Business.

186
DX 71, DX 154, PX 344.
187
JanCo provides PX 761, which is a termination notice for ISS’s newer E-Verify account. E-
Verify sent that notice on August 2, 2022, months after Closing. Such a termination is not
actionable under the APA’s representations.
188
JanCo Opening at 19.
189
ISS Opening at 25 (citing JX 36; 11/18 Tr. at 119:2-5; 11/19 Tr. 49:10-12); APA § 4.20(a).
36
Under Section 7.7 of the APA, any limitations on damages provided in the

APA do not apply in the case of “fraud or willful misconduct.”190

JanCo alleges ISS made false representations in the APA knowing that they

were false, and then deliberately concealed the truth from JanCo to induce a

closing.191 JanCo further alleges ISS fraudulently represented that all of its

employees had been audited through E-Verify and were authorized to work in the

United States.192

As discussed above, many of JanCo’s breach of contract claims regarding the

APA’s representations are unsuccessful. To the extent JanCo alleges ISS made those

representations fraudulently, JanCo’s fraud claims necessarily fail. If a contractual

representation is not false, it cannot be actionable fraud.193 JanCo also cannot prevail

under a willful breach theory in the absence of a breach.194

JanCo proved a breach of the Absence of Changes Representation but failed

to prove its breach of contract claims for the APA’s representation regarding the

190
APA § 7.7.
191
JanCo Opening at 22-28.
192
Id. at 27-28.
193
E.I. DuPont de Nemours & Co. v. Fla. Evergreen Foliage, 744 A.2d 457, 461 (Del. 1999)
(identifying the first element of fraud as a false representation).
194
XRI Inv. Hldgs. LLC v. Holifield, 2024 WL 3517630, at *23 (Del. Ch. July 24, 2024) (“This
decision therefore concludes that for XRI to prove a willful breach, XRI must prove that Holifield
took intentional action knowing that the action would breach the LLC Agreement.”), reargument
denied, (Del. Ch. 2024); PJT Hldgs., LLC v. Costanzo, 2025 WL 1417531, at *14 (Del. Ch. May
15, 2025) (defining “willful breach” as “a scenario in which the counterparty knows that its
conduct would constitute a breach and yet goes forward anyway.”).
37
financial state of the Business, the APA’s representations regarding employee

bonuses, the APA’s representations regarding work authorization, and the catchall

representation. JanCo’s fraud or willful breach claim regarding the APA’s

representations on work authorization195 fails because JanCo failed to show a breach

of the representation. The same issue blocks JanCo’s fraud claims regarding the

financial representations, catchall representation, and representations regarding

employee bonuses.196

1. JanCo fails to prevail on its claim of willful misconduct.

Willful misconduct is “intentional wrongdoing, not mere negligence or

recklessness.”197 In order to demonstrate “willful misconduct,” a Plaintiff must

prove the Defendant acted with scienter.198 For a breach of a contractual provision

to be “willful,” the party must have taken an intentional action knowing that said

action would breach the relevant contract.199

195
JanCo Opening at 27.
196
Id. at 24-25. JanCo cannot prove fraud or willful breach regarding the Pitcock bonus because
JanCo failed to identify damages suffered from that breach, as discussed above. DuPont, 744 A.2d
at 461 (identifying damages as the last element of a fraud claim).
197
Dieckman v. Regency GP LP, 2021 WL 537325, at *36 (Del. Ch. Feb. 15, 2021) (citation
omitted), judgment entered, (Del. Ch. 2021), and aff’d, 264 A.3d 641 (Del. 2021).
198
Id.
199
XRI, 2024 WL 3517630, at *23 (“This decision therefore concludes that for XRI to prove a
willful breach, XRI must prove that Holifield took intentional action knowing that the action would
breach the LLC Agreement.”); PJT, 2025 WL 1417531, at *14 (defining “willful breach” as “a
scenario in which the counterparty knows that its conduct would constitute a breach and yet goes
forward anyway.”).
38
This APA contains an absence of changes representation which, due to the

Materiality Scrape, provides that ISS’s business has not suffered any adverse impact

between June 30, 2021, and Closing.200 Such a representation is so broad because

of the interplay of multiple contractual provisions. Above, this Court already faced

contractual interpretation issues regarding the interaction between the Absence of

Changes Representation and the Materiality Scrape. The relationship between the

two clauses is presumably not obvious to the layman, especially since neither of the

Parties’ explanation for the interplay of the clauses matches the Court’s analysis.201

In order to prove that ISS committed “willful misrepresentation” in the APA,

JanCo needed to show that ISS breached the APA’s Absence of Changes

Representation with knowledge that it was doing so.202 JanCo has not proved this

knowledge by a preponderance of the evidence. None of the evidence presented by

JanCo clearly persuades the Court that ISS knew it was breaching the Absence of

Changes Representation or the APA in general.

The most meaningful evidence for JanCo’s willful breach claim regarding the

Absence of Changes Representation is the chat threads between Heding and

200
APA §§ 4.10(e), 4.10(l), 7.5(f).
201
See generally JanCo Supp.; ISS Supp.
202
XRI, 2024 WL 3517630, at *23 (“This decision therefore concludes that for XRI to prove a
willful breach, XRI must prove that Holifield took intentional action knowing that the action would
breach the LLC Agreement.”); PJT, 2025 WL 1417531, at *14 (defining “willful breach” as “a
scenario in which the counterparty knows that its conduct would constitute a breach and yet goes
forward anyway.”).
39
Holloway, which show both executives were aware the Business had challenges

during the Absence of Changes Period.203 Despite its significance, JanCo does not

invoke this evidence in its opening post-trial brief to support the willful breach

claim.204

Even accepting Heding and Holloway’s awareness that the Business was

facing challenges, the Court cannot declare ISS to have knowingly breached the

APA. As recognized above, neither party correctly interpreted the APA and the

interplay of the Materiality Scrape. Indeed, no witness testified at trial regarding the

meaning of the Materiality Scrape. As such, it is unlikely for Heding and Holloway

to have enabled ISS’s knowing breach of the Absence of Changes Representation

when even after post-trial briefs, oral argument, and supplemental briefs, neither

party explained the application of the Materiality Scrape to the Absence of Changes

Representation with complete correctness. Heding and Holloway cannot be

expected to have understood the breadth of the Absence of Changes Representation,

especially where none of the evidence indicates any ISS employees knew

nondisclosure of the Business’ decline constituted a breach of the APA. ISS

employees may have known the Business was struggling, but that does not prove

they knew they were breaching the APA.

203
PX 326.
204
JanCo Opening at 25-27.
40
Nor can the Court look to the knowledge of any other ISS employees; several

ISS employees testified that they had not reviewed the APA’s representations prior

to Closing, so those employees could not have known the parameters of the Absence

of Changes Representation.205 Where ISS and its employees lack knowledge that

the decline in the Business constitutes a breach of the APA, ISS cannot be found to

have the requisite scienter for a willful breach.206

2. JanCo’s fraud claims fail.207

Fraud consists of:

(1) a false representation, usually one of fact, made by the defendant;
(2) the defendant’s knowledge or belief that the representation was
false, or was made with reckless indifference to the truth;
(3) an intent to induce the plaintiff to act or to refrain from acting;
(4) the plaintiff’s action or inaction taken in justifiable reliance upon
the representation; and
(5) damage to the plaintiff as a result of such reliance.208

Fraud claims therefore require proof of “a certain level of scienter on the part of the

defendant.”209

205
11/18 Tr. at 256:17-257:12 (Reader); 11/19 Tr. at 189:22-190:4 (Pitcock); 11/21 Tr. at 80:10-16
(Holloway); 11/21 Tr. at 231:7-15 (Heding).
206
XRI, 2024 WL 3517630, at *23 (“This decision therefore concludes that for XRI to prove a
willful breach, XRI must prove that Holifield took intentional action knowing that the action would
breach the LLC Agreement.”); PJT, 2025 WL 1417531, at *14 (defining “willful breach” as “a
scenario in which the counterparty knows that its conduct would constitute a breach and yet goes
forward anyway.”).
207
The Court is disturbed that JanCo offered no caselaw analogy in its briefing on its fraud claims.
See generally JanCo Opening; JanCo Answering.
208
DuPont, 744 A.2d at 461-462.
209
Metro Commc’n Corp. BVI v. Advanced Mobilecomm Techs. Inc., 854 A.2d 121, 143 (Del. Ch.
2004) (quoting DRR, L.L.C. v. Sears, Roebuck & Co., 949 F. Supp. 1132, 1137 (D. Del. 1996)).
41
In its Complaint, JanCo grouped its fraud claims into three categories: “E-

Verify,” “Profitability,” and “Employee Census.”210 After trial, JanCo applied these

categories of fraud claims to particular representations of the APA. Fraud claims

concerning the list of the Business’ employees provided by ISS fail because JanCo

cannot show a breached representation, as explained above.

JanCo alleges ISS fraudulently represented that ISS had E-Verified all its

employees.211 The evidence does not show ISS represented, either inside or outside

of the APA, that it had E-Verified the Business’ entire workforce, only that it runs all

employees through E-Verify, eventually, as part of onboarding.212 JanCo contends

ISS represented it was “100% E-Verify,” but relies on notes from JanCo’s own

employee who did not testify at trial.213 Such evidence does not persuade the Court

that ISS made a representation that every employee of the Business was already E-

Verified. It seems unlikely that ISS would be able to truthfully make such a

representation given the potentially drawn-out E-Verify procedure214 and the

Business’ high turnover rate.215

210
D.I. 134 at ¶¶ 207-238.
211
JanCo Opening at 27.
212
D.I. 231 at 11 [“ISS Answering”]; JX 4 at 2; Tr. 11/20 at 193:19-23.
213
JanCo Opening at 20 (citing PX 239).
214
See Tr. 11/20 at 194:1-200:11 (explaining the E-Verify process).
215
ISS Opening at 25 (citing JX 36; 11/18 Tr. at 119:2-5; 11/19 Tr. 49:10-12).
42
JanCo alleges ISS fraudulently represented that all of the Business’ employees

were authorized to work in the United States.216 As discussed above, there is not

sufficient evidence showing that ISS’s employees were unauthorized to work in the

United States, which therefore means there is insufficient evidence ISS made a false

representation to that effect.

JanCo alleges ISS’s Absence of Changes Representation was fraudulent, as

the Business suffered a sharp decline before Closing, which ISS concealed.217 JanCo

relies on various internal communications showing ISS knew the Business was

struggling and contends JanCo was not informed of the decline.218 In order to prove

fraud, JanCo must be able to show that its reliance on the Absence of Changes

Representation was justified.219

Where an alleged fraud victim has information contradicting a false

representation before acting in purported reliance on that representation, that alleged

victim cannot demonstrate justifiable reliance.220 In Great Hill Equity Partners IV,

LP v. SIG Growth Equity Fund I, LLLP, the Court of Chancery resolved a fraud claim

216
JanCo Opening at 27.
217
JanCo Opening at 23.
218
JanCo Opening at 9; JanCo Answering at 6; PX 424 at 10; PX 326; PX 348; PX 370.
219
DuPont, 744 A.2d at 462.
220
Great Hill Equity P’rs IV, LP v. SIG Growth Equity Fund I, LLLP, 2018 WL 6311829, at *39
(Del. Ch. Dec. 3, 2018); See also Surf ’s Up Legacy P’rs, LLC v. Virgin Fest, LLC, 2024 WL
1596021, *18 (Del. Super. Apr. 12, 2024) (“A finding of justifiable reliance isn’t possible if the
recipient was aware of a representation’s falsity”) (citation omitted), reargument denied, 2024 WL
3273427 (Del. Super. July 2, 2024).
43
in connection with a business acquisition.221 The Court of Chancery found an

alleged fraudulent omission inactionable where the alleged victim was already aware

of the omitted information.222 The court found the element of justifiable reliance

was absent,223 a finding supported by the presence of strong indemnity provisions in

the acquisition deal, which protected the alleged fraud victim.224

JanCo contends its reliance on the Absence of Changes Representation was

justified because the Absence of Changes Representation could not be contradicted

by JanCo’s due diligence.225 JanCo notes the Absence of Changes Representation is

forward-looking, concerning events after June 30, 2021, when due diligence was

already “primarily complete.”226

Even if the Court accepts JanCo’s point regarding formal due diligence

between June 30, 2021, and Closing—during the period to which the Absence of

Changes Representation refers—JanCo’s fraud claim still fails, as JanCo was

informed of the increase in temporary labor and the issues posed by the

implementation of People@ISS before entering the deal. At pre-Signing meetings

in Atlanta, ISS operational leaders told JanCo that the Business had 400 to 500 open

221
Great Hill, 2018 WL 6311829.
222
Id. at *39.
223
Id.
224
Id. at *40.
225
JanCo Opening at 27.
226
Id.
44
positions and was using temporary labor and overtime to cover the accounts.227 ISS

further informed JanCo about the operational issues it faced due to the People@ISS

rollout.228

Prior to Signing, JanCo’s advisors warned JanCo of “overall labor shortages

(consistent with the market) which has led to an increase in overtime hours.”229 The

advisors also noted there was “not a non-trivial number” of open positions.230

JanCo’s damages claim is based on the impact of JanCo’s staffing issues (both

those concerning temporary labor and People@ISS) on its profitability.231 ISS

provided JanCo with an updated profit and loss statement, trial balances, and other

financial reports for July, August, September, and October 2021 before Closing.232

The trial balances included all of ISS’s general ledger accounts, including line items

for temporary labor.233 JanCo was able to easily run its own monthly profit and loss

statements from the trial balances,234 which enabled it to identify the increase in

temporary labor in an email sent on November 21, 2021, nine days before Closing.235

227
11/18 Tr. at 157:6-12, 165:16-167:10, 259:14-265:1.
228
11/18 Tr. at 265:2-22, 293:9-19; 11/19 Tr. at 183:7-184:7, 214:23-216:7.
229
JX 17 at 10.
230
DX 88 at 3.
231
JanCo Opening at 2-3.
232
DX 472-475; DX 478; DX 485.
233
DX 475.
234
11/18 Tr. 168:15-179:16; 11/19 Tr. 90:17-91:19.
235
DX 472 at 1.
45
Higdon and Maynord testified that the Business’ pre-Closing financials aligned with

historical performance.236

It was not reasonable for JanCo, a sophisticated business entity that was

informed before and after Signing that ISS was dealing with staffing and HR issues,

to blindly rely on a representation that the Business had not declined at all between

June 30, 2021, and Closing. JanCo knew about the staffing and HR issues before

Signing and knew about those occurring during the Absence of Changes period.

JanCo further knew the staffing and HR issues’ impact on the financial performance

of the Business, because it had access to the Business’ financials. This case is

analogous to Great Hill, as JanCo knew of the allegedly concealed decline in the

Business before the acquisition.237 Likewise, in Arwood v. AW Site Servs., LLC,

JanCo “passed warning sign after warning sign” as the true state of the Business

stared JanCo in the face.238

236
11/18 Tr. at 183:11-18, 185:9-13; 11/19 Tr. at 13:7-21.
237
Great Hill, 2018 WL 6311829, at *39.
238
Arwood, 2022 WL 705841, at *25.

This case is distinct from Maverick Therapeutics, Inc. v. Harpoon Therapeutics, Inc., where
the evidence showed the fraud victim did not uncover the false representation before the deal.
2020 WL 1655948, at *30 (Del. Ch. Apr. 3, 2020) (emphasizing that justifiable requires the
plaintiff not know the defendant made a false statement), judgment entered, (Del. Ch.
2020), judgment entered, (Del. Ch. 2021). JanCo was informed the Business was struggling and
cannot have justifiably relied on a contractual representation to the contrary.

In a letter dated July 7, 2025, JanCo directs the Court to the Superior Court’s recent decision
in River Valley Ingredients, LLC v. Am. Proteins, Inc., in which the Court found fraudulent
inducement. 2025 WL 1826656, at *7-9 (Del. Super. July 2, 2025). D.I. 242. In River Valley, the
Court found justifiable reliance where the fraud victim had no reason to doubt the veracity of a
46
Perhaps JanCo closed the deal without fuss after acknowledging the breadth

of potential indemnification under the Absence of Changes Representation. As

noted in Great Hill, such a broad indemnification remedy is a factor which weighs

against a finding of justifiable reliance.239 ISS can be held liable for breach even

where JanCo’s reliance on the contractual representation was not justifiable, as

justifiable reliance is not an element of breach of contract.240

The absence of justifiable reliance forecloses JanCo’s fraud claim under the

Absence of Changes Representation. Because JanCo can demonstrate neither fraud

nor willful misconduct, JanCo’s recovery is limited by the APA.241

G. JanCo Did Not Prove Damages for Breach of Contract by a
Preponderance of the Evidence.

Even though JanCo sufficiently alleges a breach of contract, it must still

satisfy the third element of a breach of contract claim: damages.242 “As a general

matter, a remedy for breach of contract should seek to give the non-breaching party

the benefit of its bargain.”243 The “traditional method of computing damages for a

fraudulent representation. Id. at *8. JanCo’s case is distinct because JanCo had information before
Closing which contradicted the allegedly fraudulent contractual representation.
239
Great Hill, 2018 WL 6311829, at *40 (reasoning that strong indemnification protection in an
acquisition deal supports a finding there was not justifiable reliance on a deal representation).
240
Interim Healthcare, 884 A.2d at 548 (“Under Delaware law, the elements of a breach of contract
claim are: (1) a contractual obligation; (2) a breach of that obligation; and (3) resulting damages.”)
(citation omitted), aff’d, 886 A.2d 1278 (Del. 2005).
241
APA § 7.7.
242
Base Optics Inc. v. Liu, 2015 WL 3491495, at *16 (Del. Ch. May 29, 2015).
243
In re Dura Medic Hldgs., Inc. Consolidated Litig., 333 A.3d 227, 255 (Del. Ch. 2025) (citation
omitted).
47
breach of contract claim is to determine the reasonable expectations of the

parties.”244 While mathematical certainty is not required to prove damages, the

plaintiff must show “the existence of damages provable to a reasonable certainty,

and that the damages flowed from the defendant’s violation of the contract.”245

“Where parties have agreed upon a particular remedy, Delaware law

prioritizes their agreement.”246 As noted previously, the APA has an indemnification

provision whereby ISS agreed to indemnify JanCo for “Losses” arising out of any

breach of ISS’s representations and warranties.247

Here, the Parties specifically excluded Losses that “include punitive,

exemplary, treble, consequential, incidental, or other special damages, lost profits,

or diminution in value, regardless of legal theory, unless they are part of a claim

made by a third party.”248 This is consistent with well-settled Delaware law: “Under

Delaware law, consequential damages in the form of good will, lost future profits,

and lost customers are not awarded in breach of contract actions . . . . Delaware

244
Cobalt Operating, LLC v. James Crystal Enter., LLC, 2007 WL 2142926, at *29 (Del. Ch. July
20, 2007) (“Expectation damages are calculated as the amount of money that would put the non-
breaching party in the same position that the party would have been in had the breach never
occurred.”).
245
Base Optics, 2015 WL 3491495, at *16 (citation omitted).
246
Dura Medic, 333 A.3d at 256 (“Requiring parties to live with the language of the contracts they
negotiate holds even greater force when, as here, the parties are sophisticated entities that
bargained at arm’s length.” (citation and internal quotation omitted)).
247
APA § 7.2(a).
248
APA § 7.4(e) (emphasis added).
48
courts have consistently found these damages to be speculative in nature, and;

therefore, have barred recovery for them.249

JanCo’s damages theory—that “ISS delivered a company that was worth less

than half of what JanCo paid” —relies upon an all-or-nothing damages calculation

that encompasses both its fraud and breach of contract claims.250 Essentially, JanCo

claims it its entitled to $43,169,783 whether it is successful either on its fraud or

willful misrepresentation claims, and JanCo does not provide a separate damages

theory for each claim.251 Specifically with respect to its breach of contract claims,

JanCo does not attempt to apportion the alleged damages among the different

breaches alleged in this case.252

JanCo cannot prove its entitlement to damages by a preponderance of the

evidence. As a preliminary matter, JanCo did not prove its fraud and willful

misrepresentation claims at trial, thereby meaning it is not entitled to damages for

fraud or willful misrepresentation. More problematic, however, is the issue of

JanCo’s inability to specifically tie its damages to the breach of the Absence of

Changes Representation.

249
Crowell Corp. v. Hirnont USA, Inc., 1994 WL 762663, at *3 (Del. Super. Dec. 8, 1994)
(citations omitted).
250
See JanCo Opening at 28 (“JanCo is entitled to the difference between the value of the
transaction as (fraudulently) represented and its actual value” (citations omitted)).
251
See JanCo Opening at 28-30 (discussing breach of contract and fraud damages as one lump
sum).
252
11/20 Tr. at 43:10-44:3; 45:9-46:17.
49
Regarding damages for the Absence of Changes Representation: JanCo’s all-

or-nothing damages figure fails to identify damages for its one successful breach

claim. While it is true that mathematical certainty is not required for a damage

award, a party cannot have a damages expert calculate an omnibus damages figure

for multiple fraud and breach of contract claims, fail to prove most of those claims,

and then claim entitlement to the expert’s omnibus damage award.

Here, the Court held that ISS breached the Absence of Changes

Representation because the Business suffered from an increase in temporary labor

during the Absence of Changes Representation’s period.253 The Court also found

that the People@ISS rollout compounded ISS’s operations and staffing issues and

disrupted the business during the period when the business was to remain

unchanged.254 Yet, JanCo’s expert admitted at trial that his damages calculation did

not depend on whether any specific representation or warranty was breached.255

253
Discussion § A.
254
Id.
255
11/20 Tr. at 43:22-44:15 (“Q. But [your damages theory] doesn’t depend—your calculation
does not depend on whether any specific representation or warranty was breached. Is that right?
A. I would say that’s generally speaking. I think if one of them is breached, you still—the damages
and how the purchasers were harmed is still the overpayment on purchase price from—and I think
this is more of a legal question and for Your Honor to obviously rule on in terms of liability. If
you’re—from a valuation perspective to assist Your Honor if you’re asking me how these portions
of Asset Purchase Agreement, how valuable they are and what they mean from a financial
perspective, I’m happy to discuss that with you, but again, this is I think swaying over to more of
a legal liability portion.”); Id. at 45:9-18 (“Q: Ultimately if one representation or warranty is
breached but not others, your number does not change. Is that correct? A. Again, that’s
specifically correct. From my perspective, from a valuation perspective you have to look at them
together, but if one is breached, you would still get to the damages that flow from that breach is
50
Delaware law is clear that JanCo must demonstrate with “reasonable certainty

that it was damaged by the challenged conduct.”256 While “reasonable certainty”

does not mean “absolute certainty,” the damages calculation “must be taken out of

the area of speculation.”257 When a party does not attempt to tie a damages

calculation to a particular breach, that party fails to prove damages.258 Such is the

case for JanCo here. APA Section 7.4(e) provides that indemnifiable Losses may

not include losses based on “diminution of value.”259 The same clause prohibits

indemnification for “lost profits.”260 JanCo’s damages calculation alleges a

diminution of value for the Business as a whole, as reflected by its lost profitability.

Such damages for breach are barred by the APA.261

the overpayment in purchase price, as well as the other damages categories that went on my
report.”).
256
NetApp, Inc. v. Cinelli, 2023 WL 4925910, at *16 (Del. Ch. Aug. 2, 2023) (citing Siga Techs.,
Inc. v. PharmAthene, Inc., 132 A.3d 1108, 1111 (Del. 2015), as corrected (Dec. 28, 2015)) (internal
quotation marks omitted).
257
Tanner v. Exxon Corp., 1981 WL 191389, at *1 (Del. Super. July 23, 1981) (citation omitted).
258
Universal Enter. Gp., L.P. v. Duncan Petroleum Corp., 2013 WL 3353743, at *20 (Del. Ch. July
1, 2013) (noting that while plaintiff proved a breach of a representation it was not entitled to
diminution-in-value damages; comparatively, defendant was entitled to damages for a specific
dollar amount regarding the actual condition of the properties at closing); See also In re Dura
Medic Hldgs., Inc. Consol. Litig., 333 A.3d 227, 255 (Del. Ch. 2025) (“In addition to showing the
existence of damages, the plaintiff must show ‘that the damages flowed from the defendant’s
violation of the contract.’” (quoting Base Optics Inc. v. Liu, 2015 WL 3491495, at *16 (Del. Ch.
May 29, 2015)); In re El Paso Pipeline P’rs, L.P. Deriv. Litig., 2015 WL 1815846, at *25 (Del.
Ch. Apr. 20, 2015) (same) (citation omitted).
259
APA § 7.4(e).
260
Id.
261
Had JanCo proved Fraud, the damages limitation clause would not apply, as it only applies to
indemnification claims. APA § 7.7.
51
H. JanCo Owes ISS $3,390,119 for the Working Capital Adjustment.
Section 2.5 of the APA provides a mechanism for adjusting the Purchase Price

based on the discrepancy between the targeted working capital and actual working

capital identified after Closing.262 The Parties were to work together, after Closing,

to identify the Business’ actual working capital.263 The Parties agreed that, if the

actual working capital exceeded the target working capital by more than $100,000,

ISS would be entitled to the difference between the target working capital plus

$100,000 and the actual working capital.264 If the opposite was true—if the actual

working capital was over $100,000 less than the target—JanCo would be entitled to

the difference between the actual working capital and the target working capital

minus $100,000.265

ISS contends that the actual working capital for the Business exceeded the

target by $3,490,119, entitling ISS to a $3,390,119 increase to the Purchase Price.266

JanCo contends that it was forced to take a $3,554,694 non-cash write-off

“given JanCo’s inability to reconcile the opening books based on ISS’s

incomprehensible financial data.”267 JanCo contends that discrepancies in the books

262
APA § 2.5.
263
Id.
264
Id. § 2.5(e).
265
Id.
266
ISS Opening at 20.
267
JanCo Answering at 31-32.
52
when JanCo took over the business “tie[] directly to a $3.5 million working capital

imbalance as of Closing.”268

ISS counters: JanCo showed no evidence of improper accounting and accruals

by ISS at trial.269 As ISS points out, JanCo’s argument relies on speculation by

JanCo’s own witness, John Maynord.270

The Court is unconvinced that JanCo’s $3,554,694 write-off explains away

the working capital adjustment advocated by ISS. ISS identifies several documents

demonstrating JanCo agreed to a $3,390,119 working capital adjustment.271 The

APA provides that once the Parties agree on a working capital adjustment, the

Purchase Price should be adjusted.272

The Parties agreed on an adjustment, and now JanCo must pay it. ISS

demonstrated, by a preponderance of the evidence, that it is entitled to a $3,390,119

working capital adjustment.

I. ISS Failed to Prove its Entitlement to $165,271 for “LaSalle Equipment
taxes.”

Relying entirely on Plaintiff’s Exhibit 444, a document which was not

admitted into evidence,273 ISS contends it is entitled to $165,271 for “the LaSalle

268
Id. at 32.
269
ISS Answering at 5.
270
Id. at 5; Tr. 11/18 at 95:11-97:23.
271
DX 404 (“The attached is the ISS calculation Net Working Capital Adjustment. We agreed to
the highlighted amount for the adjustment (payment to ISS of 3,490k)” (emphasis added)).
272
APA § 2.5.
273
See D.I. 220 (providing the joint schedule of evidence, which does not include PX 444).
53
Equipment taxes.”274 Because Plaintiff’s Exhibit 444 was not admitted into

evidence, it therefore cannot be relied upon for resolving ISS’s claim regarding the

LaSalle Equipment taxes.275 Having presented no admitted evidence supporting its

claim for the LaSalle Equipment taxes, ISS failed to prove a breach.

J. JanCo Owes ISS $1,494,747 for the Ingram Micro Consent.

The APA provides that ISS was to acquire consent agreements from its top

customers authorizing ISS’s assignment of the customer contracts to JanCo.276 If

ISS had not obtained consent agreements from customers by the time Closing was

consummated, ISS would still be entitled to a Purchase Price adjustment for

obtaining these consents after Closing, provided ISS obtained consent within 120

days of Closing.277 For obtaining the consent of Ingram Micro within 120 days of

Closing, ISS would be entitled to $1,494,747.278

ISS obtained a consent agreement from Ingram Micro on January 30, 2022,

which was within the 120-day post-Closing window.279 The following day, ISS

274
ISS Opening at 21.
275
See Pretrial Stip. at 27 (“Only exhibits that are properly admitted into evidence during trial may
be attached to, referenced in, or cited in post-trial briefs.”).
276
APA § 6.1(d).
277
Id.
278
APA Schedule 2.2(f).
279
DX 258.
54
received a reciprocal consent request from Ingram Micro in connection with their

partial divestiture to CEVA Logistics.280 Pitcock forwarded it to JanCo’s staff.281

After consenting to ISS’s assignment to JanCo, Ingram Micro divested part of

their business to CEVA, who ultimately discontinued purchasing services from

JanCo.282

JanCo contends ISS is not entitled to a Purchase Price adjustment for the

Ingram Micro Consent because ISS failed to “fully disclose” that Ingram Micro

would be divesting half its business to CEVA Logistics and because of service

failures by ISS that caused Ingram Micro to end its relationship with JanCo.283

The Court agrees with ISS that the evidence does not support JanCo’s version

of the story.284 The evidence presented does not indicate ISS intended to conceal the

divestiture by Ingram Micro. Nor does the evidence indicate ISS knew about the

divestiture before Ingram Micro executed the consent agreement. ISS obtained

Ingram Micro’s consent agreement and only then learned of the divestiture.

ISS acquired Ingram Micro’s consent agreement within the deadline imposed

by the APA.285 CEVA’s subsequent decision to terminate JanCo’s services has no

bearing on ISS’s successful satisfaction of the conditions for the Purchase Price

280
DX 261.
281
DX 267; 11/19 Tr. 228:6-230:18.
282
11/19 Tr. 230:19-231:4.
283
JanCo Opening at 37.
284
ISS Opening at 21.
285
DX 258.
55
adjustment for the Ingram Micro Consent. The record does not indicate ISS engaged

in any misconduct concerning the Ingram Micro Consent. Under the terms of the

APA, ISS is entitled to the $1,494,747 for obtaining the Ingram Micro Consent.

K. ISS is Entitled to the $5,000,000 Holdback Amount.

The APA provides that JanCo retains $5 Million as a Holdback Amount to be

reduced by any indemnifiable losses.286 The balance of the Holdback Amount, less

any indemnified losses, was to be remitted to ISS within five business days following

the one-year anniversary of Closing.287 As discussed above, JanCo failed to prove

its entitlement to indemnification for any claim. Accordingly, ISS is entitled to the

Holdback Amount.

L. JanCo Waived its Remaining Claims.

JanCo presented no briefing on its Counts III, VI, VII, and VIII. 288 JanCo

abandoned these claims.289

286
APA § 2.4(b).
287
Id.
288
See generally JanCo Opening, JanCo Answering.
289
See New Start Hldgs., LLC v. Zhou, 2024 WL 4039440, at *29 n. 411 (Del. Ch. Sept. 4,
2024), judgment entered, (Del. Ch. 2025) (noting that an argument not raised in post-trial briefing
is deemed waived).
56
CONCLUSION

The Court finds as follows:

1. JanCo proved, by a preponderance of the evidence, that ISS breached the

Absence of Changes Representation, but failed to prove any damages for this

claim.

2. JanCo failed to prove its remaining claims.

3. ISS proved its entitlement to $1,494,747 for the Ingram Micro Consent and

$3,390,119 for the Working Capital Adjustment.

4. ISS failed to prove its claim for a sum allegedly related to the “LaSalle

Equipment taxes.”

5. ISS is entitled to the $5 Million Holdback Amount.

If there are any open issues not addressed or mooted by this post-trial opinion,

the Parties shall notify the Court by letter within five days. Otherwise, the Parties

should prepare briefing on the issues surrounding attorney’s fees and interest, as

directed by the Court during post-trial oral argument.

IT IS SO ORDERED.

JanCo FS 2, LLC v. ISS Facility Services, Inc.

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