Court Dismisses M&A Buyer’s Fraud Claims Absent Evidence Of The Acquired Company’s Actual Value

Posted: September 18, 2026 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Fraud/Misrepresentation, Damages, Summary Judgment

Court Dismisses M&A Buyer’s Fraud Claims Absent Evidence Of The Acquired Company’s Actual Value

On August 28, 2026, in VXI Lux Holdco S.à r.l. v. SIC Holdings, LLC, Index No. 652064/2017, 2026 NY Slip Op 51408(U), Justice Robert R. Reed of the New York County Commercial Division granted defendants summary judgment dismissing plaintiff’s fraud causes of action.

Plaintiff bought all of the equity of Symbio S.A. under a 2014 Share Purchase Agreement, alleging that the selling shareholders concealed the company’s underpayment of Chinese social benefits insurance and housing fund obligations, which inflated its reported EBITDA and caused plaintiff to pay more for the company than it was worth. Plaintiff never obtained a contemporaneous appraisal of Symbio, relying instead on the EBITDA multiple it had used to set its own offer. The court held that omission fatal to the fraud claims. The Court explained:

In the merger and acquisition context, this requires the plaintiff to submit evidence of the company’s actual value as of the date the purchase price was set, and to show that the defendant’s misrepresentations directly caused it to pay more than that actual value (see Kumiva Group, LLC v Garda USA Inc., 146 AD3d 504, 506 [1st Dept 2017]). Here, VXI has failed to come forward with any evidence of Symbio’s actual value at the time of acquisition, which is fatal to its fraud claims. . . . Having proceeded on its own EBITDA estimate without securing a contemporaneous valuation, VXI cannot now substitute the negotiated price for evidence of Symbio’s actual value on November 26, 2014 (Kumiva, 146 AD3d at 507). VXI has no reference point from which to measure a diminution in value and, thus, cannot show nonspeculative damages. A plaintiff’s assertion that it would have negotiated differently with different information, or if defendants had not made any misrepresentations, is not evidence of actual pecuniary loss (id. at 508).

The attorneys at Schlam Stone & Dolan LLP have significant experience litigating fraud claims arising out of the purchase and sale of businesses. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.

To read more about the evidence a buyer must marshal to prove damages on a fraud claim arising from an acquisition, see Schlam Stone & Dolan’s related Commercial Division Blog posts on a decision dismissing a fraudulent inducement claim where the buyer treated the negotiated purchase price as the acquired company’s actual value instead of obtaining a formal appraisal, and a decision holding that loss causation is a required element of a common-law fraudulent inducement claim that no statute excuses a plaintiff from proving.