Argus Management Corporation Sues Leading Gas and Fluid Control Solutions Provider for Alleged “Breach of Contract”
March 24, 2021, District of Delaware – Argus Management Corporation, as a Liquidating Trustee of the Taylor Wharton International Liquidating Trust, successor in interest to Taylor-Wharton International LLC (“TWI”), initiated a complaint for alleged “breach of contract” and to seek a declaratory judgment against Sherwood Valve Products, Inc. (“Sherwood”), Mueller Industries, Inc. (“Mueller”) and Regions Bank (“Regions,” and collectively, with Sherwood, Mueller, the “Defendants”). Mueller is the 100% owner of Sherwood.
The complaint seeks simple and straightforward relief. Sherwood and TWI allegedly entered into a purchase transaction under an agreement and TWI sold Sherwood 100% of its membership interests. As averred in the complaint, an indemnity escrow account was established and a portion of the purchase price was deposited in the escrow account. According to the complaint, the funds in the indemnity escrow account were available “only to satisfy timely losses for which TWI allegedly agreed to indemnify Sherwood.” Any amount not used to satisfy an indemnity was to be paid back to TWI. The final escrow release rate supposedly “expired more than three (3) years ago.” The Trustee asserts that despite this passage of time and the lack of any losses being asserted, Sherwood and Mueller “improperly refused to issue joint instructions to authorize the disbursement of the indemnity escrow account.”
Thus, the Trust seeks a declaration that it is “entitled to the indemnity of an escrow account” and urges the court to issue direction to Regions to disburse the proceeds to the Trust since “Sherwood suffered no losses under the agreement.” Further, the Trust asserts that “the agreement was a legal, binding, enforceable contract between TWI and Sherwood, and their failure to perform under the contract constitutes a breach.”
The Trust requests the court to enter judgment against Sherwood and Mueller for damages in the amount of funds maintained in the indemnity escrow account plus pre-judgment and post-judgment interest.