A US judge has dismissed a lawsuit filed by Alliance Data Systems (ADS) against Blackstone after the private equity group's proposed acquisition of the card processor fell through.
ADS was seeking a $170 million breakup fee from Blackstone following the collapse of the $7.8 billion deal in April 2008.
ADS claimed Blackstone breached its contractual obligations by prolonging negotiations with the US Office of the Comptroller of the Currency (OCC), causing the deal to fall through.
According to the Wall Street Journal, the OCC required Blackstone to provide additional financing for the deal but the firm refused, arguing it was not technically a party to the agreement because it was using a shell company called Aladdin. The deal eventually broke down.
Delaware Vice Chancellor Leo Strine ruled against ADS, deciding that the agreement was between ADS and Aladdin, and the contract did not put an obligation on Blackstone to provide help to its shell company.
Blackstone v. ADS: Write a Better Contract - Wall Street Journal