EFiled: May11202005:00P El??t?ir?;



Transaction ID 65629110 3l . 



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Case No. 2020-0338-JRS View"?

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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE "11.213??
IUWEEL INVESTORS LIMITED,
individually and in its capacity as Seller
Representative,
Plainti??, CA. No. 2020- 0338-JRS
V- PUBLIC VERSION

Filed May 11, 2020
CARLYLE ROUNDTRIP, L.P.,

CARLYLE GRANITE LP,

CGP L.P, CGP II LP, and
PURE MAGENTA INVESTMENT PTE
LTD.,



Defendants.
VERIFIED COMPLAINT

TABLE OF CONTENTS
NATURE OF THE ACTION ..................................................................................... 1
PARTIES ....................................................................................................................... 8
JURISDICTION AND VENUE................................................................................. 9
FACTUAL BACKGROUND ................................................................................... 10
I.

OVERVIEW OF THE TRANSACTION ............................................................10

II.

THE PARTIES ENTER INTO AND BEGIN CARRYING OUT THE SHARE
PURCHASE AGREEMENT (“SPA”) ..............................................................11

III. AFTER AGREEING TO THE SPA, THE PARTIES WORK TO CARRY
OUT THE TRANSACTION .............................................................................17
The World Is Struck By The COVID-19 Pandemic—And The
Parties Continue To Move Towards Closing Without Anyone
Claiming An MAE .............................................................................17
Closing Conditions Are Met On April 3, 2020 Without
Complaint From Defendants ..............................................................20
IV. DEFENDANTS SEEK TO CANCEL THE TRANSACTION BASED ON
PRETEXTUAL EXCUSES ...............................................................................21
Defendants Suffer Massive Losses On Multiple Investments
And Embark On A Strategy Of Backing Out Of Existing
Commitments, Including The Transaction ........................................21
After The Closing Conditions Are Satisfied, Defendants
Reference A Purported MAE For The First Time To The
Surprise Of Everyone.........................................................................23
The SPA Definitively Rules Out An MAE ........................................24
1.

No MAE Has Occurred Under The Plain Terms Of The
SPA .............................................................................................24
i

 2. Even If An MAE Had Occurred (And None Has), Several
Independent MAE arveouts In The SPA Clearly Apply 26

D. Defendants Fail To Explain The Basis For The Claim That An
MAE Has Occurred 28

E. Defendants Change Tactics To Try To Justify Exiting The
Transaction, And Juweel Responds By Outlining The Flaws In

  
 
 

Defendants? Reasoning 30
1. Defendants Suggest That Sellers Must Satis Conditions

That Apply When Have

eased? ??Even Though Plainly Have

Not eased 32
2. Defendants Are Also Wrong In Alleging That GBT Has

Failed To Operate In The Ordinary Course 36
3. Defendants? Other Arguments Are Without Merit 38

CARLYLE Aw) GIC BOTH REFUSE TO CLOSE BASED ON THEIR
BASELESS ARGUMENTS, WHILE THE OTHER DEAL PARTICIPANTS
(INCLUDING UWEEL) FULFILL THEIR CLOSING OBLIGATIONS 41

A. Carlyle And GIC Parrot One Another?s Baseless Objections To
Closing And Ultimately Refuse To Participate In Closing Steps,
Further Breaching The SPA 41

B. In Contrast, The Other Transaction Participants Demonstrate
Their Ability And Willingness To Complete The Closing. 44

1. The Sellers Con?rm That The Lenders Are Prepared To
Provide The Requisite Financing In The Event That
Defendants Agree To Close 44

2. Other Purchasers Likewise Are Prepared To Close 45

3. Notwithstanding Defendants? Breach, Sellers And The
Company Ful?ll Their Closing Obligations 46

ii

 

Ultimately, Given Defendants’ Breach Of The SPA And Stated
Intention Not To Close, Juweel Decided To Proceed With This
Litigation. ...........................................................................................47 

VI.  DEFENDANTS’ UNJUSTIFIABLE REFUSAL TO GO FORWARD WITH
THE TRANSACTION IS CAUSING SUBSTANTIAL IRREPARABLE HARM
TO JUWEEL .................................................................................................47 
CAUSES OF ACTION .............................................................................................. 49 
COUNT 1: Breach Of Contract (Specific Performance)
As To All Defendants ..................................................................... 49 
COUNT 2: Declaratory Judgment
As To All Defendants ..................................................................... 53 
PRAYER FOR RELIEF ........................................................................................... 54 

iii

 Plaintiff Juweel Investors Limited (“Juweel” or “Plaintiff”), individually and
in its capacity as Seller Representative, by and through its attorneys, hereby alleges
upon knowledge as to itself and its own acts, and upon information and belief as to
all other matters, as follows:
NATURE OF THE ACTION
1.

Juweel brings this action to compel Defendants Carlyle Roundtrip, L.P.

(“Carlyle Roundtrip”), Carlyle Granite AIV-R, L.P., CGP AIV-R, L.P., and CGP II
AIV-R, L.P., special-purpose entities created by The Carlyle Group Inc.
(collectively with Carlyle Roundtrip, “Carlyle”) and GIC (Ventures) Pte. Ltd
(through Pure Magenta Investment Pte Ltd.) (collectively, “GIC”) (Carlyle and GIC
collectively, “Defendants”) to honor their word. In December 2019, Carlyle
Roundtrip and GIC, along with other purchasers, agreed to purchase from Juweel’s
members ordinary shares representing an approximately

ownership interest

in GBT JerseyCo Limited (“GBT Holdco,” “GBT,” or the “Company”). GBT
Holdco is a holding company operating under the brand name American Express
Global Business Travel, a leading corporate global business travel enterprise with
over 10,000 clients in more than 140 countries.
2.

Pursuant to the Parties’ contract—the Share Purchase Agreement by

1

 and among Carlyle Roundtrip, GIC, and the other purchasers1 (the “Purchasers”),
and Juweel, GBT Holdco, QH Travel LP, and the other sellers (the “Sellers”)
(collectively the “Parties”), dated as of December 16, 2019, and the associated
agreements thereto (the “SPA” or “Agreement”2)—the transactions contemplated
under the SPA (the “Transaction”) are scheduled to close on May 7, 2020.3
3.

Starting in August 2019 (when the Parties began negotiating the terms

of the SPA in earnest) and continuing after December 16, 2019 (when the SPA was
signed), the Parties worked diligently to consummate the Transaction.
4.

Carlyle and GIC, however, have made clear that they are no longer

prepared to close the Transaction. Defendants now have buyers’ remorse and are
seeking to renege on their contractual commitments. Tellingly, exacerbating
Defendants’ buyer’s remorse is the financial condition of Carlyle

1

Beyond Carlyle and GIC, the other Purchasers include: AMG Pantheon Subsidiary
Fund, LLC; The Regents of the University of California; KP Mayflower Holdings,
LP; CH Purchasers; and BR Roundtrip Cayman Co-Investment, L.P.
2

Capitalized terms not otherwise defined herein have the meaning set forth in the
SPA, a true and correct copy of which is attached as Exhibit A, or the Definitions to
the SPA (“Defns.”), a true and correct copy of which is attached as Exhibit B.
3

Under the terms of the SPA, Closing was to occur on April 30, 2020, because the
last of the relevant conditions to Closing occurred last month. See SPA § 1.6(a).
However, on April 27, 2020, an amendment pursuant to SPA § 11.8(a) was executed
to move the Closing Date to May 7, 2020. A true and correct copy of that
amendment is attached as Exhibit C.
2

 : as the press reported just last week, The Carlyle Group Inc.
reported a first quarter net loss of $612 million and a $1.2 billion loss on its
investments. Carlyle Global Partners, the Carlyle fund investing in the Transaction,
was particularly hard hit. As a result of these losses, Carlyle and GIC are apparently
not prepared to part with further cash to consummate the Transaction.
5.

However, because The Carlyle Group’s losses do not provide

Defendants with a basis to withdraw from the Transaction, they have cobbled
together a series of pretextual and transparently false excuses to justify their refusal
to close.
6.

Defendants’ principal excuse is that the COVID-19 pandemic’s impact

on GBT constitutes a Material Adverse Effect (“MAE”) under the SPA. But even if
the pandemic met the SPA’s definition of an MAE—which it does not—the point
would be moot because the pandemic falls within several carveouts to the MAE
provision (the “Carveouts”) that Defendants agreed to when the SPA was signed.
For example, Defendants agreed that an MAE would not be deemed to exist under
the SPA if it arises from “general business or economic conditions,” “national or
international political or social conditions,” “any disruption” in “financial, banking
or securities markets,” or “changes in Legal Requirements,” except to the extent
such MAE “disproportionately and adversely affects GBT Holdco . . . relative to

3

 other participants in the industries in which GBT Holdco . . . participate[s].” Defns.
at A-18.4
7.

It is beyond dispute that the current pandemic is affecting the entire

world, including the entire corporate travel industry. In fact, in Carlyle’s own words,
“Corporate travel is at a standstill”—not only GBT’s corporate travel. Ltr. from
J. Polkes to M. Dontzin (Apr. 20, 2020) (“2nd Carlyle Ltr.”) at 5.5 For this reason
alone, Defendants’ MAE argument fails as a matter of law.
8.

Defendants’ claims are also undercut by their timing. Carlyle first

asserted that there was an MAE on April 8, 2020, just five days after the Transaction
received approval from the Committee for Foreign Investment in the United States
(“CFIUS”), yet months after news of the pandemic broke, and after Defendants had
spent months working diligently towards Closing. On that same date, Carlyle
disclosed that it already had retained litigation counsel. Thus, immediately after the
Transaction received CFIUS approval, and apparently in the face of its mounting
investment losses, Carlyle began manufacturing excuses to back out of the deal.
9.

On the same day that Carlyle suddenly and for the first time made its

MAE claim (i.e., April 8), Juweel requested that Carlyle (i) identify the MAE, and

4

Unless otherwise noted, all emphasis has been added.

5

A true and correct copy of this letter is attached as Exhibit D.
4

 (ii) explain why the Carveouts do not apply. Carlyle refused to provide a response
to this simple, straightforward request until April 20, 2020—almost two weeks later.
10.

Even then, in its April 20 response from its counsel, Carlyle continued

to evade providing any substantive basis for its alleged MAE and continued to fail
to acknowledge the existence of the applicable Carveouts. Instead, Carlyle
advanced myriad new purported reasons for its refusal to close, including that GBT
is allegedly no longer operating in the “Ordinary Course Of Business,” as required
under Section 5.2 of the SPA, because of its “cost-cutting steps.” 2nd Carlyle Ltr.
at 7. In later correspondence, GIC’s litigation counsel echoed these contentions,
asserting that they also justified GIC’s refusal to close.
11.

But Defendants’ new arguments are as baseless and pretextual as their

MAE claim. The SPA defines “Ordinary Course Of Business” as, “with respect to
any Person, the ordinary course of business of such Person consistent with past
custom and practice.” Defns. at A-18. All of the Parties to the SPA were, and are,
well aware that GBT, like every other business in the corporate travel industry,
responds to impactful events—such as economic downturns, terrorism, changes in
government regulations, and pandemics—by cutting costs commensurate with the
attendant decrease in demand. For example, following the global financial crisis of
2008 (the “GFC”), GBT engaged in substantial cost-cutting commensurate with the

5

 severity and duration of that crisis, which yielded a cost recovery comparable to the
cost recovery GBT’s current actions are anticipated to generate.
12.

It is therefore beyond reasonable dispute that GBT’s present cost-

cutting efforts to weather the current downturn are consistent with its past custom
and practice. In Carlyle’s investment committee memorandum, Carlyle’s own words
reflect its awareness that

Carlyle Investment Cmte.
Memo (received via email Oct. 30, 2019) (“Carlyle IC Memo”) at 3.6 In such cases,
Carlyle accepted that travel management companies such as GBT

Id. at 23.
13.

In apparent recognition of the utter baselessness of their claims,

Defendants have now resorted to threatening personal liability for the officers of
GBT in an effort to leverage their way to the result they want. In its April 20 letter

6

This internal memorandum, a true and correct copy of which is attached as
Exhibit E, was presented by Carlyle to its own investment committee to authorize
Carlyle’s investment in GBT, and forms the basis upon which Carlyle’s decision to
invest in GBT was approved.
6

 to Plaintiff, Carlyle misleadingly claimed that, under Section 8.2(f) of the SPA, GBT
management was required to deliver certain certifications in their personal capacity.
2nd Carlyle Ltr. at 9. The SPA, however, contains no such requirement. This type
of deliberate, improper attempt by a sophisticated party such as Carlyle to procure a
benefit to which it is not legally entitled should not be countenanced by this Court.
14.

The Parties agreed in the SPA that “irreparable damage will occur in

the event that any of the provisions of this Agreement are not performed in
accordance with their specific terms or otherwise breached.” § 11.7.7 Critically, if
the Closing does not take place by June 30, 2020, the Transaction will irreversibly
unravel. Among other things, Juweel has a well-founded concern that the syndicate
of lenders that has been arranged to provide in excess of

in financing

to the Company—financing that is a condition of Closing—will fall apart after
June 30, 2020, when the debt arrangement agreements terminate. If such financing
is not available, the Closing cannot occur.
15.

Thus, to avoid irreparable harm, Juweel seeks a final order and

judgment compelling the Defendants to specifically perform their obligations under
the SPA to close the Transaction promptly, and in no event later than June 30, 2020.

7

Unless otherwise noted, all citations to “§” refer to the corresponding section of
the SPA.
7

 PARTIES
16.

Plaintiff Juweel Investors Limited is a limited company registered with

and organized under the laws of the Cayman Islands. Pursuant to Section 11.15 of
the SPA, Juweel has the authority to bring this action on behalf of the Sellers, and to
represent them as Seller Representative.
17.

Defendant Carlyle Roundtrip, L.P. is an exempted limited partnership

registered with and organized under the laws of the Cayman Islands. Carlyle
Roundtrip is an affiliate of The Carlyle Group Inc.
18.

Defendant Carlyle Granite AIV-R, L.P. (“Carlyle Granite”) is a limited

partnership registered with and organized under the laws of the State of Delaware.
Carlyle Granite is an affiliate of The Carlyle Group Inc. and a sponsor of Carlyle
Roundtrip in the Transaction.
19.

Defendant CGP AIV-R, L.P. (“CGP”) is a limited partnership

registered with and organized under the laws of the Cayman Islands. CGP is an
affiliate of The Carlyle Group Inc. and a sponsor of Carlyle Roundtrip in the
Transaction.
20.

Defendant CGP II AIV-R, L.P. (“CGP II”) is a limited partnership

registered with and organized under the laws of the Cayman Islands. CGP II is an
affiliate of The Carlyle Group Inc. and a sponsor of Carlyle Roundtrip in the
Transaction.
8

 21.

Defendant Pure Magenta Investment Pte Ltd. (“Pure Magenta”) is a

private limited company registered with and organized under the laws of Singapore
and is a Purchaser under the SPA.

JURISDICTION AND VENUE
22.

Jurisdiction is proper under 10 Del. C. §§ 341, 6501. This case

involves “matters and causes in equity” because Juweel seeks the equitable remedy
of specific performance. Juweel also requests a declaratory judgment.
23.

Jurisdiction also is proper under 6 Del. C. § 2708(b), because the SPA

provides that each Party:
irrevocably submits to the jurisdiction of Court of Chancery of the State
of Delaware or, if the Court of Chancery of the State of Delaware
declines to accept jurisdiction over a particular matter, any federal court
located in the State of Delaware, or, if both the Court of Chancery of
the State of Delaware and the federal courts located in the State of
Delaware decline to accept jurisdiction over a particular matter, any
state court of the State of Delaware having subject matter jurisdiction.
§ 11.5. The Parties also agreed to accept service of process through the SPA’s notice
procedures, §§ 11.2 & 11.5, and the SPA itself is governed by Delaware law. § 11.5.

9

 24.

The SPA further provides that all Parties “irrevocably and

unconditionally waive[] any right . . . to a trial by jury with respect to any legal
proceeding directly or indirectly arising out of or relating to” the SPA or the
Transaction. Id.
FACTUAL BACKGROUND
I.

OVERVIEW OF THE TRANSACTION
25.

GBT is one of the premier corporate travel management companies,

with over 10,000 corporate clients in more than 140 countries. GBT offers corporate
clients travel management and premium travel services, including integrated
consulting, proprietary research, and end-to-end meetings and events capabilities
globally.
26.

GBT is a joint venture between a Netherlands-based affiliate of the

American Express Company, American Express Travel Holdings Netherlands
Coöperatief U.A. (“Amex”) and Juweel. Following the creation of the joint venture
in March 2014, Juweel and Amex each owned 50% of GBT Holdco, a Jersey-based
corporation,8 before dilution from certain incentive equity arrangements.

8

Initially, GBT Holdco was organized under the laws of the Netherlands. As a
condition precedent to Carlyle’s willingness to sign the SPA, Carlyle requested that,
as part of the Transaction, GBT Holdco be restructured into a company organized
under the laws of Jersey. These reorganizational steps occurred promptly following
the execution of the SPA, in reliance in part upon the expectation that Carlyle would
10

 27.

Beginning in August 2019, a consortium of investors including Carlyle

and GIC began negotiations to purchase approximately

of Juweel’s

ownership stake in GBT.
28.

GBT represented a prime investment opportunity that could lead to

significant returns to the Defendants. In October 2019, Carlyle recognized

. Carlyle IC Memo at 2.
29.

Based on these fundamentals, Carlyle concluded that a

Id. at 2.
II.

THE PARTIES ENTER INTO AND BEGIN CARRYING OUT THE SHARE
PURCHASE AGREEMENT (“SPA”)
30.

After extensive negotiations, Carlyle, GIC, and the other Purchasers

consummate the Transaction following satisfaction of the closing conditions.
Carlyle thus caused GBT and Juweel to incur significant costs and expenses in
connection with this reorganization, which would require further costs and expenses
to undo to the extent possible.
9

The presentation refers to “CGP,” which is Carlyle Global Partners, a division of
The Carlyle Group that specializes in long-term, large-scale private equity
investments.
11

 agreed to purchase approximately
representing an approximately

of Juweel’s current stake in GBT,
ownership interest in GBT. Through the

Transaction, Carlyle and GIC are each acquiring approximately
31.

of GBT.

The SPA provides that the Purchase Price for the transferred interest

in GBT would be calculated based upon an agreed-upon enterprise value for the
Company of

. This calculation would yield an aggregate Purchase Price

for all of the Purchasers in excess of
32.

.

On December 16, 2019, the Parties executed the SPA to consummate

the purchase of Juweel’s interest in GBT by the Purchasers. See SPA.
33.

The SPA regulates when the Sellers and Purchasers are obligated to

consummate the Transaction and provides the limited circumstances under which
the SPA could be terminated.
34.

At least four SPA provisions are directly relevant to the instant action:

(a) the definition of “Material Adverse Effect,” (b) the “Ordinary Course” covenant,
(c) the covenants related to a “Refinancing” to be consummated prior to the Closing,
and (d) a requirement that equity commitment letters from sponsors of certain
Purchasers be delivered as a condition precedent to the signing of the SPA.10

10

In addition, the SPA includes provisions requiring: (1) GBT to “cooperate with
and afford to the Purchasers . . . access . . . to all of the books and records and
properties of GBT Holdco,” § 5.1; and (2) each of the parties to take “commercially
12

 35.

First, the Purchasers’ obligation to consummate the Transaction is

subject to the condition precedent that no “Material Adverse Effect shall have
occurred.” § 8.2(d). The SPA defines an MAE as “any event, change, effect,
occurrence, circumstance, state of facts or development that, individually or in the
aggregate, is or would reasonably be expected to be materially adverse to the assets,
properties, financial condition or results of operations of [GBT], taken as a whole.”
Defns. at A-18.
36.

However, the MAE definition expressly excludes from consideration

“any adverse change, event, development, effect, occurrence, circumstance or state
of facts arising from,” inter alia:
(i) general business or economic conditions, (ii) national or
international political or social conditions . . . , (iii) financial, banking
or securities markets . . . , [and] (v) changes in Legal Requirements . . . ,
except to the extent, with respect to clauses (i) through (v) above, that
any such event, change, effect, occurrence, circumstance, state of facts
or development disproportionately and adversely affects [GBT] relative
to other participants in the industries in which [GBT] participate[s].
Id.
37.

Second, GBT Holdco is required to “conduct the GBT Business in the

Ordinary Course of Business.” § 5.2. “Ordinary Course of Business” is defined as

reasonable efforts” to “fulfil the conditions precedent to the obligations of the other
party(ies) . . . to consummate” the Transaction “and to cooperate with each other in
connection with the foregoing.” § 5.4.
13

 ?with respect to any Person, the ordinary course of business of such Person
consistent with past custom and practice.? Defns. at A-l9.

38. Third, the SPA provides that a ?Re?nancing?? shall have been
completed in accordance with Section 5.10(d) of the SPA, and a_12 by
the Company of to Amex and Juweel shall have been made, prior to
Closing. 

39. The Re?nancing, including the amount to be borrowed and the size of

is on swim oi?


 

11 ?Re?nancing? is de?ned as the ?entry by GBT Holdco and/or one or more of its

Subsidiaries, as borrowers or guarantors (as a licable into a new credit facili
iroviding aggregate borrowing capacity of

  
 

contemplated by Section 5.10(d) (excluding borrowing capacity in respect
of any revolving credit facilities).? Defns. at A-20.

12

   

is de?ned as by GBT Holdco or
GBT UK Holdco, as the case ma be, to Amex and Juweel and the further
Juweel of

Defns. at A-l3.

 

13 The SPA also provides that a Share Distribution must be consummated
immediately prior to the Closing to enable the sale of GBT interests by Juweel?s
direct and indirect members. 

14

40.

If “immediately prior to the Closing . .
have ceased

,” Section 5.10(d)(i) applies. This
provision requires GBT to borrow funds sufficient to have a Net Indebtedness
following Closing equal to at least

, and to make

that

would result in a
immediately after” the Closing.
41.

Section 5.10(d)(ii) applies, in contrast, if
have not “ceased.” If this provision applies,

GBT needs to borrow

prior to Closing and make

that would reasonably be expected to result in the specified “
immediately after”
.
42.

Fourth, the SPA provides that, concurrently with the execution of the

SPA, as an integrated part of the overall transaction, “and as a condition and
inducement to the Company’s, Juweel’s and the Sellers’ willingness to enter into”
the SPA, the Sponsor of each Purchaser that is a newly-organized shell corporation
created for the purposes of the Transaction, must execute “an equity commitment

15

 letter for the bene?t of [each such] Purchaser? committing to provide equity
?nancing for the Transaction. See SPA, Recital see also 4.6.

43. Defendants Granite, GP, and CGP II (collectively, the ?Sponsors?),
which are alternate investment vehicles for The Carlyle Group Inc., entered into such
an equity commitment letter with Carlyle Roundtrip on December 16, 2019 (the
Juweel is an express third-party bene?ciary of the ECL.14 In the ECL, the
Sponsors committed to contribute the capital necessary for Carlyle Roundtrip to
complete its share of the Transaction at or prior to the Closing up to a maximum
aggregate commitmen_ (the ?Purchase Price Commitment?), subject
to two conditions precedent. EC 1, 3.

44. Section 3 of the EC sets forth the two conditions precedent that must
be satis?ed to trigger the Sponsors? equity capital contribution. First, all conditions
in SPA Sections 8.1 and 8.2 (other than those conditions that are satis?ed
substantially simultaneous with the Closing) must be satis?ed at or prior to Closing.
Second, the Closing and sale of the shares contemplated by the SPA must be
consummated. ECL 3.

45. By its terms, Juweel is an explicitly contemplated bene?ciary of the

Sponsors? promises in the ECL to provide the necessary capital to complete the

 

14 A true and correct copy of the ECL is attached hereto as Exhibit F.

16

Transaction if the two above conditions are satisfied. In such case, Juweel may seek
specific performance of the Sponsors’ promises once “Juweel has confirmed in
writing that if specific performance is granted and the Purchase Price Commitment
is funded, then the Closing will occur.” ECL § 7.
III.

AFTER AGREEING TO THE SPA, THE PARTIES WORK TO CARRY OUT THE
TRANSACTION
The World Is Struck By The COVID-19 Pandemic—And The
Parties Continue To Move Towards Closing Without Anyone
Claiming An MAE
46.

In the months after the SPA was signed, all of the Parties worked in

earnest to prepare for Closing. The Parties were in constant contact to ensure that
the necessary pre-Closing steps were being taken, regulatory approvals were being
sought from CFIUS, and the necessary documentation was being prepared. In
particular, the Parties were negotiating the credit agreement to be signed by the
lenders (the “Credit Agreement”).
47.

While the Parties were working diligently to complete the

Transactions, the COVID-19 pandemic struck—affecting businesses around the
globe, including the travel industry. As Carlyle has noted, “[c]orporate travel is at a
standstill” as a result of the pandemic. 2nd Carlyle Ltr. at 5.
48.

GBT remains a strong going concern and has adequate liquidity to

withstand a prolonged decline in business travel as well as the current global
17

 economic downturn after the Transaction closes. The Company entered the market
disruption
. Pro forma for the
Transaction, the Company would emerge

. In the Company’s
conservative 2020 liquidity projection case, the Company is

49.

GBT also implemented a business response plan to maintain its

competitive position based on its experiences with prior downturns and travel
disruptions, such as the 2008-2009 GFC and the 2002-2003 SARS epidemic. The
plan involves taking actions to reduce operating expenses, optimize revenues, and
preserve liquidity and cash reserves—actions that are collectively estimated to
achieve similar cost savings on a percentage basis to the Company’s cost reductions

18

  

in response to prior economic downturns, saving the Company

50. Across the industry, as with a multitude of other businesses large and
small around the world, nearly every major corporate travel management company
(including CWT, TripActions, BC Travel, FC Travel Solutions, Expedia, ATPI,
Travel Transport, Travel Counsellors, Ovation Travel, hristopherson Business
Travel, and Atlas Travel) has been impacted by and has taken similar

steps to cut costs in response.

51. Given relative ?nancial strength, GBT has?

 

 

 

See Carl le IC Memo at 2 notin0 that GBT has

id. at 4 notinO 

 

19

52.

The Parties continued to move the Transaction forward to Closing

despite COVID-19.16 The Sellers had every intention to close when the Closing
conditions were met and diligently took actions to obtain the necessary regulatory
approvals.
Closing Conditions Are Met On April 3, 2020 Without Complaint
From Defendants
53.

On April 3, 2020, CFIUS issued letters to the CFIUS Filing Persons,

including GIC (which were promptly delivered to Carlyle) confirming that it had
completed its review and that the Transaction was cleared to move forward.
54.

Having satisfied this last condition precedent to consummating the

Transaction that would not occur contemporaneously with the Closing, see § 8.1(f),
the Closing Date was set as April 30, 2020, and the Parties proceeded with the
remaining steps required to ensure the Closing would occur by that date.17 On

16

It was apparent before April 2020 that the COVID-19 pandemic was affecting
macroeconomic conditions, particularly the travel sector. Multiple countries
implemented travel bans significantly earlier. See, e.g., Presidential Proclamation
on Novel Coronavirus, U.S. Dept. of State (Mar. 14, 2020),
https://travel.state.gov/content/travel/en/traveladvisories/ea/PresidentialProclamation-Coronavirus.html (listing U.S. COVID-19 travel bans announced in
January, February, and March 2020 for passengers to and from China, Iran, and the
Schengen Area). Despite these conditions, Carlyle continued to pursue the
Transaction prior to April 2020, and was, for example, significantly involved in the
allocation of GBT’s debt on February 27, 2020.
17

Upon receipt of CFIUS approval, the condition precedents to Carlyle’s funding of
20

 April 7, 2020, Juweel prepared and circulated a “Closing Timeline” setting forth the
dates upon which certain closing deliverables would need to be finalized prior to
April 30, 2020, when the Closing was set to occur.
55.

The Parties scheduled a joint call of the lead business principals on

April 8, 2020, to review the timeline and ensure that everyone understood the final
tasks they would need to complete prior to Closing.
56.

From Juweel’s perspective, the Transaction was moving smoothly

toward Closing—and none of the Parties had asserted anything to the contrary.
IV.

DEFENDANTS SEEK TO CANCEL THE TRANSACTION BASED ON
PRETEXTUAL EXCUSES
Defendants Suffer Massive Losses On Multiple Investments And
Embark On A Strategy Of Backing Out Of Existing Commitments,
Including The Transaction
57.

Unbeknownst to the Sellers, Carlyle suffered major losses in its other

investments as a result of the COVID-19 pandemic.
58.

These losses were immense. In the first and second quarters of 2020,

Carlyle recorded a $1.2 billion loss on its private equity investments, reducing
firmwide accrued performance by 34% in the same period.

the purchase pursuant to the ECL that could be completed prior to Closing were also
satisfied. See ECL § 3. Per the SPA, the initial closing date was therefore April 30,
2020. § 1.6(a). This date was extended to May 7, 2020 by agreement of the parties.
See Ex. C.
21

 59.

The losses due to COVID-19 were particularly acute for Carlyle Global

Partners (“Global Partners”), a fund managed by Carlyle that specializes in longerterm private equity investments. Due to these losses, Global Partners “fell out of
carry”—meaning that Carlyle would not receive compensation for its management
of the assets held by Global Partners if sold today.
60.

On information and belief, Global Partners, through CGP and CGP II,

has a financial interest in the Transaction.
61.

The impact of Carlyle’s losses is not limited to Carlyle.

62.

On information and belief, Defendants decided to back out of their

existing commitments due to these immense losses, even if doing so required them
to breach their agreements.
63.

On information and belief, with respect to the Transaction,

.
64.

On information and belief,
.
22

 65.

On information and belief, Defendants then proceeded to willfully and

intentionally breach the SPA by asserting that the conditions for Closing had not
been met and refusing to participate in any further Closing activities.
After The Closing Conditions Are Satisfied, Defendants Reference
A Purported MAE For The First Time To The Surprise Of
Everyone
66.

During the April 8, 2020 call, Tyler Zachem, one of Carlyle’s

Managing Directors, announced out of the blue that Carlyle believed an MAE had
occurred, that it had hired outside counsel, and that it did not intend to close.
Mr. Zachem’s statement surprised the Juweel representatives on the call, as Carlyle
had made no mention of an MAE to date, continued to actively participate in the preClosing activities, and failed to articulate any basis for making this assertion. When
asked, Girish Karira, GIC’s Senior Vice President, confirmed that GIC agreed with
Carlyle’s position. GBT Chairman Greg O’Hara immediately responded that no
MAE had occurred, and the call concluded shortly afterwards.
67.

Later, in an April 10, 2020 email to Mr. O’Hara, Mr. Zachem reiterated

that “it does appear to us that there has been an MAE,” which he claimed was “due
to the extent and duration of the projected decline in GBT’s performance, and the
related solvency issues.” Email from T. Zachem to G. O’Hara (Apr. 10, 2020) at 5.18

18

A true and correct copy of this email is attached as Exhibit G.
23

 He further stated: “as I also said several times on Wednesday, we look forward to
considering any information that GBT thinks is relevant in making that assessment.”
Id.
68.

As noted above, despite repeated requests to do so, to this day, Carlyle

has neither set forth in detail the underlying basis for its assertion that there has been
an MAE-type event, nor why any such event, even if present, would not be
encompassed by the MAE Carveouts in the SPA. When GIC later began echoing
Carlyle’s MAE arguments (as referenced below), it likewise failed to provide a
plausible justification for claiming that an MAE had occurred.
The SPA Definitively Rules Out An MAE
69.

Despite Defendants’ suggestion to the contrary, GBT’s performance

during the current economic upheaval in no way constitutes an MAE under the SPA.
1.
70.

No MAE Has Occurred Under The Plain Terms Of The SPA

First, GBT’s current performance and financial position are not so

adversely affected by today’s economic environment as to constitute an MAE as a
matter of Delaware law. Under the SPA, an MAE only exists where an “event,
change, effect, occurrence, state of facts, or development” “is or would be
reasonably expected to be materially adverse to the assets, properties, financial
condition or results of operations of GBT Holdco.” Defns. at A-18.

24

 71.

Even in this crisis period, GBT retains a strong market and liquidity

position. GBT also has additional buffers against any COVID-19 related impacts on
its business, ranging from obtaining third-party financing to potential government
COVID-19 related relief. After the Closing, GBT will emerge with

. Even with the
impact of COVID-19, GBT is projected to be

. Cost-saving initiatives that GBT has taken,
including those predating COVID-19, will further contribute to GBT’s
In sum, no MAE has occurred, or could reasonably be expected to
occur, as a result of the effects of COVID-19.
72.

Moreover, Defendants had no reasonable expectation that the current

effects of COVID-19 would constitute an MAE, especially given Defendants’
interest in GBT. For example, as reflected in the
memorandum Carlyle presented to its investment committee when seeking approval
for its investment in the Transaction,

25

 Carlyle IC Memo at 2. Similarly, Article II of the Post-Closing
Shareholders Agreement provides for

73.

Having accepted this lengthy durational period for its investment

commitment, the investment memorandum shows Carlyle recognized (and
accounted for) the fact that the corporate travel market

Carlyle IC
Memo at 3. Carlyle also considered that in 2009, GBT had
Id. at 23. In fact, as part of its process
for considering and approving its investment in GBT, Carlyle

Id. at 24.
2.
74.

Even If An MAE Had Occurred (And None Has), Several
Independent MAE Carveouts In The SPA Clearly Apply

Even assuming an MAE event had occurred (which it did not), the

Sellers previously sought and obtained multiple Carveouts in the MAE, each of
which is broad enough to cover the present economic upheaval caused by COVID19.

26

 75.

In this regard, the SPA makes clear that:

[N]one of the following shall be deemed to constitute, and none of the
following (or the effects thereof) shall be taken into account in
determining whether there has been, an [MAE]: any adverse change,
event, development, effect, occurrence, circumstance or state of facts
arising from
(i) general business or economic conditions,
(ii) national or international political or social conditions,
including the engagement by the United States in hostilities,
whether or not pursuant to the declaration of a national
emergency or war, or the occurrence of any military or terrorist
attack upon the United States, or any of its territories, possessions
or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States,
(iii) financial, banking or securities markets (including any
disruption thereof and any decline in the price of any security or
any market index) . . . , [and]
(v) changes in Legal Requirements, . . .
except to the extent, with respect to clauses (i) through (v) above, that
any such event, change, effect, occurrence, circumstance, state of facts
or development disproportionately and adversely affects [GBT]
relative to other participants in the industries in which [GBT]
participate[s].
Defns. at A-18.
76.

All of these Carveouts apply to the circumstances related to COVID-

19. Undeniably, the “general business or economic conditions” due to COVID-19
have deeply hobbled commerce across the entire world, and the corporate travel
industry in particular. Id. The “social conditions” of hundreds of millions of people
27

 essentially ceasing interpersonal, social interaction and staying home has also taken
its toll. Id. Conditions in the “banking, securities, and financial markets” are
likewise reflected in the economic and business disaster currently engulfing the
world. Id. And, finally, the current economic circumstances are also primarily the
direct byproduct of governmental shut-down and other similar orders, i.e. “changes
in Legal Requirements.” Id.
77.

Nor could Defendants hope to avoid these Carveouts by showing that

GBT has been “disproportionately and adversely affected” by the pandemic “relative
to other participants” in the travel industry. Id. In fact, GBT and its competitors
have been equally affected by the current crisis—and Defendants have never
explained how GBT has, or could have been, impacted in any manner
disproportionate to its competitors.
Defendants Fail To Explain The Basis For The Claim That An
MAE Has Occurred
78.

On April 14, 2020, Mr. O’Hara responded to Mr. Zachem’s email to

confirm that the Transaction was continuing to “mov[e] towards a successful
conclusion,” noting that GBT would soon provide the estimated Closing statement
and that GBT was working with its lenders to ensure all Closing conditions were
satisfied. Mr. O’Hara also sought answers regarding Mr. Zachem’s unexplained
claim of an MAE. After summarizing the Carveouts in the MAE, Mr. O’Hara asked
28

 Mr. Zachem to explain—if he could—on what basis he believed an MAE had
occurred, and, if so, why the Carveouts did not apply here. See Ex. G at 4.
79.

Mr. Zachem replied later that evening that “it appears that there has

been an MAE,” but pointedly failed to provide any basis for that assertion, or any
explanation as to why the Carveouts did not apply. Instead, he asked that
Mr. O’Hara provide him with detailed information on five different topics relating
to GBT and the Transaction.
80.

Two days later, on April 16, 2020, GIC followed Carlyle’s lead. On

April 16, 2020, Mr. Karira of GIC wrote to Mr. O’Hara to ask for some of the same
information that Carlyle was requesting. Later that day, Mr. O’Hara provided
complete responses via email to every one of Mr. Karira’s and Mr. Zachem’s
requests. See Email from G. O’Hara to G. Karira (Apr. 16, 2020).19 He also
provided Mr. Zachem and Mr. Karira with a draft Closing Statement (the “Closing
Statement”) and liquidity analysis (the “Liquidity Analysis”), which included slides
mapping the post-transaction liquidity position to management’s 2020 scenarios.
The Liquidity Analysis showed that, even under the most conservative scenarios,
GBT would undoubtedly remain solvent through 2020 and beyond,

19

A true and correct copy of this email is attached as Exhibit H.
29

 .
81.

Right before Mr. O’Hara sent his email to Mr. Zachem, he received a

letter from Carlyle’s counsel. See Ltr. from J. Polkes to G. Sinatra and
G. Schernecke (Apr. 16, 2020).20 That letter contained the same information
requests included in Mr. Zachem’s April 14, 2020 email, and, importantly, did not
assert that an MAE had occurred.
82.

Thus, in his email response to Mr. Zachem, Mr. O’Hara acknowledged

that he had received the letter from Carlyle’s counsel and that, at Mr. Zachem’s
request, Juweel’s litigation counsel would respond in due course (which they did on
April 19, 2020). See Ex. G at 1-2. Mr. Zachem replied the next day, again without
referencing his MAE claim. Id. at 1. Therefore, as of April 19, 2020, Carlyle had
provided no sound basis for its claim that an MAE had occurred, and had advanced
no other reasons why the Closing could not take place as scheduled.
Defendants Change Tactics To Try To Justify Exiting The
Transaction, And Juweel Responds By Outlining The Flaws In
Defendants’ Reasoning
83.

After nearly two weeks of refusing to provide a straight answer with

respect to the purported “MAE” that Defendants claimed had occurred, on the

20

A true and correct copy of this letter is attached as Exhibit I.
30

 evening of April 20, 2020, Carlyle’s legal counsel delivered a ten page, singlespaced letter claiming on various grounds that the SPA had been violated. See 2nd
Carlyle Ltr. Carlyle’s previous primary assertion that an MAE had occurred was
now relegated to a brief discussion at the end of its letter. Instead, Carlyle pressed a
grab bag of new theories for why the SPA’s Closing conditions had not been
satisfied—theories that fail to stand up to scrutiny.
84.

The very next day, GIC’s litigation counsel advised Juweel that he had

been retained to represent GIC in connection with “issues” arising from the
Transaction raised by Carlyle and asked to be copied on all subsequent
correspondence.
85.

Two days later, on April 22, 2020, Juweel’s counsel responded with a

letter, copying GIC’s litigation counsel, that explained in detail the legal and factual
flaws in Carlyle’s arguments, and why the Closing conditions of the Transaction
remained satisfied. See Ltr. from M. Dontzin to J. Polkes (Apr. 22, 2020) (“Juweel
Response”).21 It also provided detailed responses to a dozen requests for information
and documents contained in Carlyle’s letter.22

21

A true and correct copy of this letter is attached as Exhibit J.

22

Embedded in the body of Carlyle’s letter were a number of new information
requests (along with questions that had previously been asked and answered). Less
than 48 hours after receiving Carlyle’s letter, Juweel identified twelve separate
31

     

1. Defendants Suggest That Sellers Must Satisf Conditions
That Apply When Have
eased??Even Though Plainly Have

Not Ceased

86. Defendants? first argument, as presented in arlyle?s letter, was that the
Sellers? current plans with respect to the Re?nancing?as re?ected in the Closing
Statement and the Liquidity Analysis Mr. O?Hara had provided?failed to comply

with certain requirements the SPA imposed in the event 

had ceased. See 2nd Carlyle Ltr. at 2. The simple ?aw in this argument

is that? have not ceased and in fact are ongoing.

87. Section 5.10(d) of the SPA sets forth alternative Re?nancing

obligations depending on the status of 

Section applies if, inter alia, ?immediately prior to the Closing . .-

 
 

doeewed?

 

Section

 

 

requests sprinkled through the text of the letter, drafted complete responses to each
request, collected all records related to the requests, and provided all of this to

Defendants. See Juweel Response at 8-14.
32

88. There are two key differences under these provisions. First, a

Re?nancing under Section requires GBT to borrow enough to have its Net

Indebtedness following Closing equal to In contrast,
Section requires GBT to borrow less?specifically, 
immediately prior to the Closing.

89. Second, the two sections require GBT to make ?of

different amounts of ?to Amex and Juweel immediately prior to the

losing. ?as an amount that would ?reasonably be
erreeree? re erek re rke 

but is measured at different times depending

on which SPA provision applies. Under Section 

result in ?immediately after the consummation of -
-11 9.. immediatelv after the Closing. Under Section on the

other hand, should result in immediately after I
ere ekk erererrk

estimates will occur 180 days from now.23

 

 

 

33

90.

Defendants claimed in the Carlyle letter that because “
have ceased,” Section 5.10(d)(i) applies and,

therefore, the Company’s current plans for the Refinancing and
allegedly fail to satisfy Section 5.10(d). See 2nd Carlyle Ltr. at 4.
91.

But Defendants’ premise is wrong.
have not ceased. To the contrary,
are continuing, as Juweel has made clear to Defendants on several

occasions. To make this more concrete for Defendants, in response to a request from
Mr. Karira, Juweel provided a list of
just from March 20, 2020, more than two weeks before
Defendants’ first mention of any MAE or any desire to abandon the Transaction.
See Juweel Response at 5. The list,

since March 20, 2020,
including on April 22, 2020, the date of Juweel’s response letter.
92.

As a result, Section 5.10(d)(ii) applies, and the Sellers have set the

Refinancing and

amounts to satisfy this section’s requirements. Thus,

the Sellers’ current plans fully comply with Section 5.10(d), which in turn, satisfies
the closing Conditions of Sections 8.1(c) and 8.2(b) of the SPA.
34

 93.

As a fallback argument, Defendants also claimed that, even if
have not ceased, the Sellers’

current plans failed to comply with Section 5.10(d)(ii) in its own right. See 2nd
Carlyle Ltr. at 6. In this regard, Defendants objected to an entry in the Closing
Statement reflecting a “holdback”

from the first borrowings under
.

the Credit Agreement

Id. Defendants claimed that this “holdback” was in fact being used by the Company
to cover extraordinary “COVID-19 related operating losses for the remainder of
2020” and improperly raised Defendants’ Purchase Price to acquire their shares in
the Company. Id.
94.

But nothing in Section 5.10(d)(ii), or elsewhere in the SPA, bars GBT

from using the proceeds of its first borrowings under the Credit Agreement to fund
its operations and to

requirement, regardless of its effect on

the Purchase Price. Said differently, there is no requirement that this
be included in

to be made immediately prior to the
expressly requires the Company to

Closing. In fact, the definition of
retain

to meet its ongoing obligations, and expressly permits

35

 the Company to retain? to satisfy its anticipated cash needs
after the including through?.24

2. Defendants Are Also Wrong In Alleging That GBT Has
Failed To Operate In The Ordinary Course

95. Second, Carlyle claimed that, considering the cost-cutting measures the
Company has taken as a result of the pandemic, GBT has not been operating its
business in the ?ordinary course? pursuant to Section 5.2 of the SPA. 2nd Carlyle
Ltr. at 7. Section 5.2 provides that: ?From the date of this Agreement until the
Closing Date . . . GBT Holdco shall, and shall cause GBT Holdco?s Subsidiaries to,
conduct the GBT Business in the Ordinary Course of Business.? 5.2. ?Ordinary
Course of Business? is de?ned as, ?with respect to any Person. the ordinary course
of business of such Person consistent with past custom and practice.? Defns. at A-
19. By relying on this argument to excuse their refusal to close, Defendants are
attempting to use Section 5.2 as a backdoor, alternate MAE provision.

96. But as Juweel explained in its response letter, the cost-cutting measures

the Company implemented in the face of the pandemic and the consequent industry-

 

is de?ned as

 

Defns. at 14.

36

wide contraction are not a departure from the ordinary course. See Juweel Response
at 7. To the contrary, this cost-cutting is ordinary course for GBT, as well as for
other travel companies and businesses worldwide under current market conditions.
Carlyle itself recognized that, during periods of macroeconomic volatility,

See
Carlyle IC Memo at 23. In fact, it would be extraordinary if the Company did not
take these actions in the face of the current crisis.
97.

GBT’s cost-cutting measures are also entirely consistent with its “past

custom and practice.” As noted, GBT undertook significant cost-cutting steps
during past economic downturns that were commensurate with the anticipated
severity and duration of the contraction. GBT’s COVID-19 response plan is
estimated to produce a cost recovery comparable to the amount recovered from the
steps GBT implemented in response to the GFC.
98.

Defendants also claimed that the Transaction itself constituted a

departure from the ordinary course of business because the Company was allegedly
manipulating “a recapitalization deal into emergency funding of GBT.” 2nd Carlyle
Ltr. at 7. In other words, Defendants were once again challenging GBT’s plans to
use the initial proceeds received under the Credit Agreement in connection with the
Refinancing to meet its operating expenses going forward.
37

 99.

However, nothing in the SPA precludes the Company from doing so.

This claim is squarely refuted by Section 5.2, which carves out from the “ordinary
course” requirement all “transactions undertaken in connection with this Agreement
and the other Transaction Documents prior to the Closing,” including the
“Refinancing and

, which shall be expressly permitted under this

Agreement.” § 5.2.
3.

Defendants’ Other Arguments Are Without Merit

100. Defendants also suggested the Sellers would not be able to accurately
make the representation and warranty required under Section 2.21 of the SPA—i.e.,
that since January 1, 2019, the Company’s top 20 customers and suppliers had not
delivered written notice (and, to Juweel’s knowledge, had not threatened) that they
would terminate or cancel their business, or reduce the Company’s revenues earned
by more than 20%. See 2nd Carlyle Ltr. at 9. Carlyle’s letter questioned Juweel’s
ability to make this representation as of the Closing Date. Id.
101. Defendants’ claims rely on an incorrect reading of the SPA. In reality,
the SPA makes clear that Juweel only represented as to the accuracy of the
representations and warranties contained in Section 2 “as of the date hereof (or, if
made as of a specific period or date, as of such period or date).” § 2. There is no
dispute that Juweel’s Section 2.21 representation was true as of the date the SPA
was signed—i.e., the “date hereof.” While Juweel has a separate obligation under
38

 Section 8.2(a) to reaf?nn the accuracy of the representations and warranties as of
the Closing Date, that obligation applies only to the extent that any change in a
representation?s accuracy constitutes an MAE?and as explained above, the
Company has not experienced an MAE. Therefore, the requirements of Section
8.2(a) are clearly satis?ed.25

102. Not content to raise what it knew to be frivolous claims of breach of the
SPA, Defendants have resorted to pointed threats of personal liability against the
of?cers of GBT. For example, arlyle?s letter stated that, at Closing, ?each of?cer
of must . . .provide a certi?cation in their personal capacity of all
representations and warranties of Section 2, including that no Material Adverse
Effect has occurred.? 2nd Carlyle Ltr. at 9. Defendants, however, consciously
misstate the requirements of Section which make no mention of these
certi?cates being made or delivered in the personal capacity of of?cers. This
type of conduct on the part of sophisticated parties such as Defendants is

inexcusable. In any event, Juweel is aware of the obligations set forth in Section

and notwithstanding arlyle?s overt attempt to intimidate 

 

 

management, GBT’s officers are prepared to ignore the threats against them and
fulfill the contractual obligations actually set forth in Section 8.2(f).
103. Defendants also asserted that an MAE has occurred based on the
Company’s purported “financial deterioration.” 2nd Carlyle Ltr. at 8. However,
Defendants have provided no data to back up its claims other than Carlyle’s
conclusory assertion that “reasonable assumptions” show that “a turnaround, if any,
is years away.” Id. But industry projections, as reflected in pro forma liquidity
analyses GBT shared with Defendants, confirm that Carlyle’s “assumptions” are
anything but reasonable.
104. Defendants further claimed that the MAE Carveouts do not apply
because they do not specifically reference a “pandemic” or “act of god.” Id. But
that misses the point. The Carveouts reflected in the MAE definition were written
broadly for a reason—they are not intended to spell out in detail every possible
scenario under which their terms will be triggered. The MAE instead focuses on
economic effects that could possibly be trigged by many possible causes—including
a pandemic. Defendants simply cannot avoid the fact that the plain text of several
Carveouts plainly applies to the present disruption.

40

 V.

CARLYLE AND GIC BOTH REFUSE TO CLOSE BASED ON THEIR BASELESS
ARGUMENTS, WHILE THE OTHER DEAL PARTICIPANTS (INCLUDING
JUWEEL) FULFILL THEIR CLOSING OBLIGATIONS
Carlyle And GIC Parrot One Another’s Baseless Objections To
Closing And Ultimately Refuse To Participate In Closing Steps,
Further Breaching The SPA
105. Since Defendants first raised their concerns about an MAE, and despite

their shifting justifications for their buyer’s remorse, Juweel has worked diligently
to get the Transaction back on track and demonstrate to Defendants that their
arguments are meritless.
106. Initially, it appeared that those efforts were succeeding. On April 22,
2020, the principals for Carlyle, GIC, and Juweel began discussions to come to a
non-judicial resolution of this dispute and complete the Closing on April 30 as
required by the SPA.
107. On April 27, 2020, Carlyle, GIC, and Juweel (among others) executed
an amendment to the SPA moving the Closing Date to May 7, 2020. See Ex. C.
This amendment appeared to provide Juweel with additional time to reach a
resolution of its dispute with Defendants.
108. However, on April 29, 2020, Defendants made clear that they will not
fulfil their obligation to close the Transaction.26 At 5:04 p.m., Carlyle’s litigation

26

Notably, Defendants may take (or may already have taken) other steps to try to
41

 counsel emailed a letter to Juweel, asserting that the “Sellers have not satisfied and
cannot satisfy their conditions precedent to the Closing” for all of the purported
reasons set forth in Carlyle’s letter of April 20, which Carlyle’s counsel repeated
nearly verbatim. Carlyle’s litigation counsel further stated that “any additional
dialogue will not be productive.”
109. Fifteen minutes later, GIC’s litigation counsel emailed a separate letter
to Juweel, similarly asserting that GIC “did not believe that GBT and the Sellers can
satisfy the conditions precedent to closing” based on the same pretextual excuses set
forth in “correspondence to Sellers from Carlyle.”
110. On April 30, 2020, Juweel’s counsel wrote to counsel for Defendants,
stating that, despite Defendants’ contractual obligations, they both had made clear
that they were not willing to proceed with closing. Juweel’s counsel asked the
Defendants, in light of the upcoming May 7, 2020 closing date, to let Juweel know
by 4:00 p.m. the next day whether Defendants would, or would not, proceed to close
the next week. Juweel’s counsel stated that if Juweel did not hear back from

avoid the Transaction, including by interfering with Juweel’s and GBT’s
relationships with third parties, such as GBT’s lenders
. Juweel reserves
the right to amend this Complaint to account for any additional claims it has or may
have in the future as a result of Defendants’ actions.
42

 Defendants before the requested time, Juweel would conclude that the Defendants
had repudiated their obligations under the SPA.
111. At 3:29 p.m. on May 1, 2020, GIC’s counsel advised Juweel that GIC
believed that it was “not obligated to close” the Transaction and that it “cannot do
so.”
112. Fourteen minutes later, Carlyle’s counsel emailed a similar response to
Juweel, stating that the Purchasers “have no obligation to close under the SPA, and
cannot do so consistent with its [sic] duties.”
113. On May 1, 2020, Juweel wrote to Carlyle, GIC, QIA, and Amex, asking
them to participate in a closing checklist call on May 4, 2020, at 10:00 a.m.
114. On May 4, 2020, at 9:38 a.m.—twenty-two minutes before the
scheduled call—Carlyle’s litigation counsel replied to Juweel’s request, stating that
Carlyle “cannot presently proceed to closing,” “did not see any purpose” in joining
the closing checklist call, and “further closing checklist calls are futile.” Carlyle’s
litigation counsel also instructed Juweel to direct all further correspondence to
Carlyle relating to the closing to his firm.
115. Fifteen minutes later, GIC’s litigation counsel wrote to Juweel, stating
that GIC agreed with Carlyle’s position.
116. Defendants’ refusal to participate in the closing checklist call
constituted a knowing and intentional breach of Section 5.4 of the SPA, which
43

 requires the Parties to use “commercially reasonable efforts” to take all “lawful and
reasonable actions” to consummate the Transaction, and to “cooperate with each
other in connection with the foregoing.”
In Contrast, The Other Transaction Participants Demonstrate Their
Ability And Willingness To Complete The Closing.
117. While Defendants stood back and pretended the conditions to Closing
had somehow not been satisfied, Juweel and the other deal participants fulfilled their
obligations under the SPA and proceeded with the required steps toward Closing.
1.

The Sellers Confirm That The Lenders Are Prepared To
Provide The Requisite Financing In The Event That
Defendants Agree To Close

118. Given Defendants’ refusal to comply with their obligations under the
SPA, Juweel informed Credit Suisse Loan Funding LLC and its affiliate, Credit
Suisse AG (collectively, “Credit Suisse), the lead lending syndicate arranger and
administrative agent, of Defendants’ contentions and the fact that they had asserted
they were not prepared to close.
119. In response, by an email dated May 4, 2020, Credit Suisse confirmed
that the lenders were still prepared to provide the Refinancing required under the
SPA in the event the Closing occurred. Credit Suisse noted it was “not aware of
any . . . Lender asserting that it does not intend to fund the entirety of its allocated
portion of the Term Facilities upon the satisfaction of the applicable conditions
44

 precedent set forth in th[e] Credit Agreement . . . substantially simultaneously with
the consummation of the transactions contemplated by the Roundtrip SPA as
described in the marketing materials for the loan transaction.”
120. Following this correspondence, the lenders worked with the Company
in order to enable the consummation of the Refinancing required under the SPA.
2.

Other Purchasers Likewise Are Prepared To Close

121. Juweel has similarly informed other Purchasers of the positions
Defendants have taken with respect to the Transaction.
122. Unlike Carlyle and GIC, the other Purchasers have never made any of
the pretextual arguments that Carlyle and GIC are relying upon in their false efforts
to back out of the deal.
123. In fact, a number of other Purchasers—including KP Mayflower
Holdings, LP, the CH Purchasers, and BR Roundtrip Cayman Co-Investment, L.P.—
have affirmatively represented to Juweel that they are ready to, and in fact will,
proceed with the Closing and fund their respective pro rata share of the Estimated
Purchase Price.
124. One Purchaser, the Regents of the University of California, has
affirmatively represented that it is ready to close the transaction—but due to
Defendants’ refusal to close, will now not do so unless and until Defendants fulfil
their obligations under the SPA.
45

 3.

Notwithstanding Defendants’ Breach, Sellers And The
Company Fulfill Their Closing Obligations

125. While Defendants continued to resist their obligations under the SPA,
the Company and the Sellers proceeded with the steps required to complete the
Closing—at least, to the extent Defendants did not block such efforts by their refusal
to participate.
126. For example, Juweel obtained a fully executed copy of the Officer’s
Certificate required under Section 8.2(e) of the SPA, and the Company has obtained
the certificates required under Section 8.2(f) of the SPA, duly executed by each of
the Company’s officers that were required to execute such a certificate. Juweel and
the Company are prepared to exchange those certificates in connection with the
Closing.
127. Because no MAE has occurred (as Section 8.2(d) of the SPA requires),
and because Juweel and the Sellers have carried out or are ready to carry out all
conditions precedent under Section 8.2, Defendants are indisputably required to
consummate the Transaction. Their refusal to do so, therefore, is a plain breach of
the SPA.

46

 Ultimately, Given Defendants’ Breach Of The SPA And Stated
Intention Not To Close, Juweel Decided To Proceed With This
Litigation
128. As a result of Defendants’ refusal to close the Transaction, shortly
before filing this Complaint, Juweel provided written notice to Carlyle Roundtrip
and the Sponsors pursuant to Section 7 of the ECL that it would seek specific
performance, and that if specific performance were granted and when the Purchase
Price Commitments were funded as a result, the Closing would occur.
129. Thereafter, in its capacity as Seller Representative, Juweel filed this
Complaint.
VI.

DEFENDANTS’ UNJUSTIFIABLE REFUSAL TO GO FORWARD WITH THE
TRANSACTION IS CAUSING SUBSTANTIAL IRREPARABLE HARM TO JUWEEL
130. Juweel and the Sellers are fully prepared to perform all their duties and

obligations under the SPA, including to complete the Closing by June 30, 2020.
131. Pursuant to Section 11.7 of the SPA, the Parties expressly
acknowledged and agreed “that irreparable damage will occur in the event that any
of the provisions of this Agreement are not performed in accordance with their
specific terms or were otherwise breached.”
132. That provision reflects the significant harm that Defendants’ refusal to
close has caused and is continuing to cause Juweel, the Sellers, and the Company.

47

 133. Unless and until the Closing takes place, Juweel, the Company, and the
Sellers suffer daily harm from, among other things, the forgone opportunity to
pursue alternative recapitalization strategies. In fact, the sophisticated Parties here
specifically agreed that any breach of the agreement would cause “irreparable
damage.” § 11.7.
134. Moreover, should the Transaction not close, Defendants will have
received a windfall by gaining substantial proprietary information about the
Company—information that, although subject to confidentiality restrictions, will be
impossible for Defendants to avoid relying upon in any setting where they or their
portfolio companies compete with Juweel or the Company’s business.
135. Juweel, as Seller Representative, and the Sellers have incurred costs to
protect their interests under the SPA, including but not limited to the costs of
bringing this action.
136. Accordingly, Defendants’ repeated and pretextual refusals to commit
to abide by their obligations under the SPA have caused and will continue to cause
Juweel and the Sellers substantial, irreparable harm that cannot be satisfied with
money damages.
137. In addition, the balance of hardships favors Juweel and the Sellers
because the harm inherent in losing the bargained-for benefits of the SPA far

48

 outweighs the hardship to Defendants of simply being compelled to honor their
contractual obligations and accept the risks they knowingly accepted.
138.

All the damages Juweel and the Sellers have incurred and will continue

to incur are a direct and proximate result of Defendants’ improper refusal to close as
the SPA requires.
CAUSES OF ACTION
COUNT 1: Breach Of Contract (Specific Performance)
As To All Defendants
139. Juweel incorporates by reference and realleges each and every
allegation contained above, as though fully set forth herein.
140. The SPA is a valid and enforceable contract between Juweel, Carlyle,
and GIC, among other Parties thereto.
141. Pursuant to Section 1.1 of the SPA, Carlyle Roundtrip and GIC are each
obligated, “subject to the conditions of [the SPA],” to purchase its agreed share of
an approximately

interest in the Company from Juweel’s members at the

Purchase Price set forth in the SPA, resulting in each owning an approximate
interest in GBT.
142. Juweel has performed all its obligations under the SPA and remains
willing and able to perform any remaining obligations.

49

 143. Specifically, Juweel and/or the Sellers performed the conditions
precedent to Closing set forth in Section 8.2 of the SPA (other than those that by
their nature are to be satisfied at the Closing) by no later than April 3, 2020.
144. Further, all of the conditions under the ECL providing Juweel the right
to seek specific performance have been satisfied, including the provision of written
notice to Carlyle Roundtrip and the Sponsors that the closing would occur if specific
performance ordering Carlyle to fund its Purchase Price Commitment was granted
by this Court. ECL § 3.
145. Accordingly, pursuant to Section 1.6(a) of the SPA, the Closing Date
(as defined therein) was to occur at 10:00 a.m. on April 30, 2020. Pursuant to an
amendment to the SPA executed on April 27, 2020, the Closing Date was moved by
agreement to May 7, 2020.
146. Defendants have unilaterally refused to perform in accordance with
their obligations under the SPA and have repudiated their obligations under the SPA
by stating their intention not to close or pay the agreed-upon Purchase Price on the
Closing Date or on any subsequent dates prior to June 30, as required by Section 1.1
of the SPA.
147. Defendants’ refusal to close and repudiation of the SPA is without any
basis under the SPA or applicable law.

50

 148. In Section 11.7 of the SPA, the Parties expressly acknowledged and
agreed “that irreparable damage will occur in the event that any of the provisions of
this Agreement are not performed in accordance with their specific terms or were
otherwise breached” and that “the parties hereto shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement, and this right shall include the right of the
parties hereto to cause the Transaction to be consummated on the terms set forth in
this Agreement, in each case, without posting a bond or undertaking, this being in
addition to any other remedy to which they are entitled at law or in equity or pursuant
to this Agreement.”
149. Juweel lacks an adequate remedy at law, and Defendants have waived
any argument to the contrary. See § 11.7. If Defendants fail to specifically perform
their obligations under the SPA, this will cause Juweel and the Sellers to lose the
Transaction, which is a unique corporate opportunity. In addition, if Defendants fail
to specifically perform, this will likely cause the Company to lose valuable financing
arrangements with its current lenders, at a time when it may be difficult to secure
comparable financing elsewhere,

51

 ?.27 Defendants? failure to speci?cally perform may also

negatively impact the Company?s other pending business opportunities.

150. Accordingly, Juweel is entitled to and seeks a decree of speci?c
performance requiring Defendants to proceed with the Closing and to comply with
its obligations under the SPA.

151. While no adequate remedy at law exists, if Carlyle fails to speci?cally
perform under the SPA or the Transaction is otherwise terminated, Juweel reserves
the right at a future date to seek monetary damages from Defendants (however
inadequate such damages may be). Defendants? intentional breach of the Agreement
has caused and continues to cause Juweel, as Seller Representative, to incur
signi?cant monetary damages on behalf of the Sellers. Those damages are
exacerbated each day Defendants refuse to commit to Closing pursuant to the SPA,
and will be even more signi?cant in the event that Defendants refuse to close on or

before June 30, 2020, in the event that the Court declines to award speci?c

performance.

 

    

37 In fact, 
Carlyle IC

Memo at 2, 4.

52

COUNT 2: Declaratory Judgment
As To All Defendants
152. Juweel incorporates by reference and realleges each and every
allegation contained above, as though fully set forth herein.
153. Pursuant to 10 Del. C. § 6501, this Court has the power to grant
declaratory judgments “to declare rights, status and other legal relations” that “shall
have the force and effect of a final judgment or decree.”
154. The SPA is a valid and enforceable contract between Juweel, GIC, and
Carlyle.
155. As alleged above, Juweel has performed all its obligations under the
SPA and remains willing and able to perform any remaining obligations.
156. As further alleged above, Defendants have unilaterally refused to
perform in accordance with their obligations under the SPA and have repudiated
their obligations under the SPA by stating their intention not to close or pay the
agreed-upon Purchase Price on the Closing Date or on any subsequent dates prior to
June 30, 2020, as required by Section 1.1 of the SPA.
157. Defendants’ refusal to close and repudiation of the SPA is without any
basis under the SPA or applicable law.
158. A real and adverse controversy exists between the parties to this action,
which is ripe for adjudication.
53

 159. Therefore, Juweel is entitled to and seeks a declaration that: (1) the SPA
remains in full force; (2) Defendants are obligated to fulfill all of their obligations
thereunder, including Closing obligations; (3) Defendants’ refusal to close under the
SPA is invalid; and (4) Defendants have intentionally and materially breached the
SPA causing significant injury to Juweel and the Sellers.
PRAYER FOR RELIEF
WHEREFORE, Juweel respectfully requests that the Court enter judgment in
favor of Juweel, on behalf of the Sellers, and against Defendants and issue an order
as follows:
1) Granting all relief requested in this Complaint;
2) Ordering specific performance of Defendants’ contractual obligations,
including their Closing obligations;
3) Enjoining Defendants from continuing to breach the terms of the SPA;
4) Directing that Defendants account to Juweel for all damages suffered
by Juweel, the Sellers, and the Company as a result of Defendants’
breach of the SPA;
5) Declaring that the SPA remains in full force and effect and Defendants
are required to meet their obligations under the SPA;
6) Awarding to Juweel the costs and disbursements of this action,
including reasonable attorneys’ fees; and
54

 7) Granting such other and further relief as this Court may deem just and
proper.

Of Counsel:

ASHBY & GEDDES

DONTZIN NAGY & FLEISSIG LLP
Matthew S. Dontzin
Tibor L. Nagy, Jr.
David A. Fleissig
Tracy O. Appleton
Daniel J. L. Kacinski
980 Madison Avenue
New York, New York 10075
Tel: 212.717.2900
mdontzin@dnfllp.com

/s/ Catherine A. Gaul
Stephen E. Jenkins (#2152)
Catherine A. Gaul (#4310)
F. Troupe Mickler IV (#5361)
Randall J. Teti (#6334)
500 Delaware Avenue, 8th Floor
P.O. Box 1150
Wilmington, Delaware 19899
Tel: 302.654.1888
sjenkins@ashbygeddes.com
Attorneys for Plaintiff
Juweel Investors Limited

Dated: May 6, 2020

55

 CERTIFICATE OF SERVICE
I hereby certify that, on May 11, 2020, a copy of the Public Version of
Plaintiff’s Verified

Complaint

was

caused

to

be

served

by

ServeXpress on the following counsel of record.

Michael A. Pittenger
Matthew F. Davis
Clarissa R. Chenoweth-Shook
Daniel M. Rusk IV
POTTER ANDERSON
& CORROON LLP
1313 North Market Street
Hercules Plaza, 6th Floor
Wilmington, DE 19801

Kenneth J. Nachbar
Ryan D. Stottmann
Elizabeth A. Mullin
Adam T. Nyenhuis
MORRIS, NICHOLS, ARSHT
& TUNNELL LLP
1201 North Market Street
Wilmington, DE 19801

/s/ Catherine A. Gaul
Catherine A. Gaul (#4310)

File

&