The Delaware Supreme Court recently issued a significant decision in Thompson Street Capital Partners IV, L.P. v. Sonova United States Hearing Instruments, LLC , clarifying the importance of strict compliance with indemnification notice requirements in mergers and acquisitions (M&A) agreements. As a result of the decision, practitioners should consider stipulating in the relevant M&A agreement that the notice requirements are material to the parties’ bargain.

Background

In 2022, Sonova United States Hearing Instruments, LLC (Sonova) acquired audiology practices from Alpaca Group Holdings, LLC, with Thompson Street Capital Partners (Thompson) acting as the members’ representative for Alpaca’s former members. The transaction was governed by a merger agreement and an escrow agreement. T

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