The New York Court of Appeals upheld the dismissal of a lawsuit on the ground that a general release entered into by the parties barred the lawsuit. The decision arose out of a series of transactions that resulted in the majority stockholder buying out the interests of the minority stockholders. The minority stockholders claimed that they sold their interests based on fraudulent information provided to them by the majority stockholder, which undervalued their interests by $900 million. The majority stockholder argued that the claim was barred by a broad release encompassing "all manner of actions . . . whatsoever . . . future, actual or contingent" given by the minority stockholders. The court held that even unknown fraud claims relating to the transactions at issue were covered by the release, unless the minority stockholders were able to prove a separate fraud (independent from the fraud in the transactions) that induced the release.
Centro Empresarial Cempresa SA v. Amer. Movil SAB de CV, No. 93 (NY Ct. of App. June 7, 2011)