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Every founder who sells a company signs a purchase agreement full of representations about the business: the financials are accurate, there’s no undisclosed litigation, no major customer is walking out the door. And a surprising number of sellers quietly believe that if something in there isn’t quite true, the buyer bears the risk of not catching it. After all, the buyer had the data room, the management meetings, and an army of diligence advisors. On July 1, 2026, the Delaware Supreme Court put that idea to rest in Paragon Metals Holdings LLC v. Smith.

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Episode description: A $223 million earnout, one October email, and four years of litigation. Roger Royse breaks down the Delaware Court of Chancery’s September 2026 post-trial opinion in ACON Igloo Holdings v. Dometic — why the seller lost every claim, why the buyer’s counterclaims failed too, and the drafting moves both sides should be making in every earnout.
Chapters:
• 0:00 — Open
• 0:30 — Intro
• 1:15 — The deal
• 3:00 — What happened in 2022
• 5:00 — Why the seller lost
• 7:30 — Seller checklist
• 9:30 — Buyer checklist
• 10:45 — Dispute process and tax
• 11:45 — Close
Disclaimer: General information only; not legal or tax advice.
Roger Royse is a partner in the Palo Alto office of Haynes and Boone, LLP and practices in the areas of corporate and securities law, domestic and international tax, mergers and acquisitions, and fund formation. He works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. https://www.haynesboone.com/people/r/... https://rogerroyse.com/

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Send us Fan Mail

Roger Royse is a partner in the Palo Alto office of Haynes and Boone, LLP and practices in the areas of corporate and securities law, domestic and international tax, mergers and acquisitions, and fund formation. He works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. https://www.haynesboone.com/people/r/... https://rogerroyse.com/

0:00–1:48 The question I'm getting on every formation call
1:48–4:10 How Delaware became the default
4:10–6:27 A rulebook vs. a body of case law
6:27–9:42 The founder's view
9:42–12:18 The investor's view
12:18–14:35 The decision framework by stage
14:35–17:10 Traps
17:10–18:18 Takeaways