16.12.2007

United case to go to trial

United Rentals has failed in its attempt to gain a summary judgement against Cerberus Capital, forcing it to complete its $ 4 billion acquisition of the world’s largest rental company.

On Thursday, Chancellor William Chandler of the Delaware Court of Chancery denied United’s request to make a summary judgment on the case and decided that the litigation should proceed to trial.

Chandler, in a letter to the company's counsel said:"I have concluded that while the question is exceedingly close, United Rentals' so-called summary judgment motion, without live trial testimony, is not an effective vehicle for deciding the contract issues in dispute in this case."

The Cerberus affiliates set up to acquire United, Ram Holdings and Ram Acquisition Corp, said in a statement that they were pleased with the decision to "deny United Rentals' motion for summary judgment" and were looking forward to presenting their case at trial.

United has argued that the contract does not allow Cerberus to terminate the takeover agreement if there has been no material change in circumstances and gives United Rentals the right to have the deal enforced.

Cerberus pulled out of the deal in November, only days before it was due to complete, it has also filed its own suit against United in the New York State Supreme Court, saying that it is only liable for the $100 million break-up fee and associated costs.