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Cobalt Falcon v. AXS Investments
Analysis
Plain Language of 'In Perpetuity' Payment Obligation Survives Fund Closure Under Delaware Law
In Cobalt Falcon v. AXS Investments, the Texas Business Court granted partial summary judgment under TRCP 166(g), holding that a contract provision requiring monthly payments "paid in perpetuity (unless otherwise agreed)" unambiguously requires continuation of payments after closure of the fund that was the subject of the transaction. Applying Delaware law, Judge Bouressa rejected the defendant's argument that the payment obligation was implicitly conditioned on the fund's continued operation, finding the plain meaning of "in perpetuity"—"forever; without end"—controls absent ambiguity.
Partial Summary Judgment on Liability Granted Where Defendant Fails to Controvert Breach or Raise Viable Affirmative Defenses
In Cobalt Falcon v. AXS Investments, the Business Court granted partial summary judgment on breach of contract liability under Delaware law, holding that the defendant's undisputed cessation of required monthly payments established breach and damages as a matter of law, while the court left the amount of damages for trial and declined to resolve whether the absence of an acceleration clause limited recovery to pre-filing installments. The court also rejected the defendant's unconscionability defense, finding no evidence that a perpetual payment obligation expressly bargained for in exchange for perpetual rights was substantively or procedurally unconscionable.