Dolan v. Altice USA, Inc.
Delaware Court of Chancery
2019 WL 2711280 (2019)
The Dolan family (coplaintiffs) founded Cablevision and its news station, News12, and agreed to include News12 in a merger with Altice (defendant) only after Altice promised in § 6.4(f) of the merger agreement to keep operating News12 through 2020 under its existing business plan, which included retaining its 462 employees for at least five years. The merger agreement disclaimed any third-party beneficiary rights for employees generally and let Altice terminate them, and its survival clause did not list § 6.4(f) among the provisions surviving closing. Two years later, Altice laid off 70 employees, including planned terminations of news anchors McVey and Campbell (coplaintiffs), and all plaintiffs sued for breach of contract and related equitable claims; Altice moved to dismiss for lack of standing and because § 6.4(f) allegedly did not survive the merger.
Whether third-party beneficiary standing to enforce a contract requires that the contracting parties intended the contract to benefit the third party as a gift or to satisfy an existing obligation, as a material part of the contract's purpose.