US Court Dismisses Travel Booking Site Yatra Online's Claims Over EBIX Merger

Yatra’s suit was dismissed because it had forfeited its right to pursue breach of contract claims when it pulled out of the merger.

A Delaware judge has thrown out Indian travel booking site Yatra Online Inc’s lawsuit accusing software company Ebix Inc of sabotaging the companies' now-dissolved merger.

Vice Chancellor Joseph Slights III in Wilmington, Delaware said on Monday that he was dismissing Yatra’s suit because it had forfeited its right to pursue breach of contract claims when it pulled out of the merger.

In dismissing the breach of contract claims, Slights said "it is not for this Court to redline the parties’ bargained-for limitations of liability because one party now regrets the deal it struck."

Slights also threw out Yatra’s claims of fraud and tortious interference with the merger agreement.

Yatra’s representatives and attorneys, including Mark Lebovitch of Bernstein Litowitz Berger & Grossmann, did not immediately respond to requests for comment on Tuesday. Neither did Ebix’s representatives and counsel from Skadden, Arps, Slate, Meagher & Flom.

Ebix first offered to purchase Yatra in early 2019, with the companies later inking a deal that valued Yatra at $337.8 million, including debt, according to a 2019 press release.

But in June 2020, Yatra terminated the merger agreement and sued Ebix for allegedly trying to circumvent the deal’s terms as Ebix stock price suffered in 2019 and later amid the COVID-19 pandemic.

The India-based company alleged that Ebix intentionally delayed filing a form with the U.S. Securities and Exchange Commission that was required to close the deal, according to an amended complaint. Yatra also said that Ebix and its lenders changed Ebix’s credit agreements so that it wouldn’t have to pay $257 million to Yatra’s shareholders as part of the business combination.

Ebix and its lenders denied wrongdoing and filed to dismiss the suit.

Slights agreed with Ebix that Yatra’s decision to back out of the deal barred the company’s breach of contract claims. The judge cited a provision in the merger that said in case of termination, no party could be held liable for breaching the agreement.

Slights also ruled that Yatra could not pursue its breach of the covenant of fair dealing claim against Ebix over the credit agreement amendment because the merger contract explicitly stated that Ebix had to complete the deal without defaulting on the agreement.

The judge also dismissed the tortious interference claim against Ebix's lenders because Yatra failed to allege that the banks' amendment of the credit agreement was a “significant factor” in Ebix breaching the merger.

The case is Yatra Online Inc v. Ebix Inc, Delaware Court of Chancery, No. 2020-0444.

For Yatra: Mark Lebovitch and Gregory Varallo of Bernstein Litowitz Berger & Grossmann; and Alisa Moen of Moen Law

For Ebix: Paul Lockwood and Cliff Gardner of Skadden, Arps, Slate, Meagher & Flom

For the banks: Robert Muckenfuss of McGuireWoods; and Victor Walton, Eric Richardson and David Hine of Vorys, Sater, Seymour and Pease (Reuters)

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