In the case of Kinexus Representative LLC v. Advent Software, Inc., C.A. 1161-VCN (July 5, 2012), the Court of Chancery granted Defendant’s renewed motion to dismiss the case under Rule 41(b) of the Court of Chancery Rules. Under Rule 41(b), the Court may dismiss an action for failing to prosecute a matter, or a failure to comply with an order of the Court.
Plaintiffs’ complaint seeks an “earn out” payment related to Advent’s acquisition of Kinexus roughly ten years ago. In ruling upon Defendant’s previous motion to dismiss filed approximately a year ago, Vice Chancellor Noble denied such motion, but heavily criticized Plaintiffs for failing to prosecute the action. In so doing, the Court granted a revised scheduling order. Since the entry of that order, the Plaintiffs again failed to prosecute the action, citing bankruptcy, a federal investigation, and lead trial counsel switching firms and declining to continue to represent Plaintiffs as reasons for failing to do so.
The Court found that both components of Rule 41(b) were met, given that Plaintiffs failed to prosecute the case and to comply with the Court’s revised scheduling order. Accordingly, the Court granted Defendant’s renewed motion to dismiss.