A Delaware court has ruled in favor of Versar, Inc., dismissing claims made by WSP USA Services Inc. in a post-closing dispute related to a stock purchase agreement. The ruling, issued on July 2, 2026, clarifies the terms of the purchase agreement and the appropriate channels for resolving disputes over purchase price adjustments.
The case, WSP USA Services Inc. v. Versar, Inc., was filed under docket number 2025-0833-KSJM. The dispute arose after Versar acquired Louis Berger Services, Inc. from WSP USA. The court's decision is significant for businesses involved in mergers and acquisitions, as it underscores the importance of clearly defined terms in purchase agreements and the processes for resolving disputes.
Background
The parties involved in this case are WSP USA Services Inc. (the Seller) and Versar, Inc. (the Buyer). The dispute stems from a stock purchase agreement dated August 4, 2023, in which Versar acquired Louis Berger Services, Inc. from WSP USA. A key aspect of the agreement was a provision for adjusting the purchase price based on net working capital.
According to the purchase agreement, Versar was required to provide WSP USA with a closing statement detailing its “good faith determination” of Louis Berger's net working capital at the time of closing. If WSP USA had objections to this closing statement, the parties were to attempt resolution within 30 days before submitting the dispute to a neutral auditor, specifically KPMG US LLP or another recognized accounting firm.
The purchase agreement also included a provision for representations-and-warranties insurance, which limited the remedies available to Versar for post-closing breaches. This insurance was designed to prevent double counting of claims, meaning that if Versar sought recovery for a loss through a purchase price adjustment, it could not also recover for the same loss under the insurance policy.
The Ruling
The court ruled to grant Versar's motion to dismiss the case, stating that WSP USA's claims did not demonstrate that Versar breached the purchase agreement. Chancellor Kathaleen St. J. McCormick wrote, "The Purchase Agreement unambiguously contemplates a scenario in which a post-closing dispute implicates multiple potential paths of recovery and Buyer chooses one—either a purchase price adjustment or recovery under the representations-and-warranties insurance policy."
WSP USA had argued that the dispute regarding the Florida Contracts should not be treated as a purchase price adjustment, but rather as a breach of representation. However, the court found that the agreement's language did not support this claim. The court emphasized that WSP USA did not argue that the liabilities associated with the Florida Contracts were not current liabilities within the definition of net working capital.
As a result, the court dismissed all three counts brought by WSP USA: the declaratory judgment, breach of contract, and injunctive relief claims. The court concluded that WSP USA's allegations failed to establish that Versar had breached the purchase agreement.
Impact
This ruling has important implications for future business transactions, particularly in the context of mergers and acquisitions. It reinforces the necessity for clear and precise language in purchase agreements, especially regarding dispute resolution processes and the scope of remedies available to the parties involved.
Businesses engaged in similar transactions can take note of this decision as it highlights the importance of understanding the implications of representations-and-warranties insurance and the potential limitations it imposes on recovery for breaches. The court's interpretation of the purchase agreement may serve as a precedent for similar disputes in the future.
What's Next
WSP USA has the option to appeal the court's decision, although the opinion did not provide specific details regarding any potential appeal. There are no related cases mentioned in the court filing.