Smoking-Gun Email Nails Violation of No-Shop Clause

25 Aug ’05

The growth of e-mail as an important tool in litigation is constantly being demonstrated, but today brings a case that couldn’t make the point any clearer:

When Qantum Communications cut a preliminary deal to buy two radio stations from businessman Ronald Hale, the private investment firm thought it had a lock on the properties because Hale said he wouldn’t entertain any other suitors.

But in April, Hale sold one of the stations to rival Cumulus Media Inc., prompting Qantum to cry foul.

In an effort to stop the sale in Miami federal court, Qantum lawyers sought to prove that Hale had violated a so-called “no shop” clause in the sales contract. During the course of discovery, the lawyers say, they found the evidence they needed: a series of e-mails that show Hale had been discussing a sale to Cumulus as early as 2004, well within the period of their client’s “no shop” clause.

In depositions, Hale had denied speaking to other potential buyers before the “no shop” provision expired.

Update: Mike Fitzgibbon links to a few of his posts on the dangers of email.

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