Plaintiff brought suit to compel conversion of his membership interests in the defendant Board of Trade of the City of New York (“NYBOT”) into newly issued shares of stock after it merged with defendant Intercontinential Exchange, Inc. (“ICE”), as per the terms of the Defendants’ merger agreement. The agreement gave members the choice of being cashed out or accepting stock, with those failing to elect their preference receiving the lesser-subscribed option. Plaintiff did not receive his election form and consequently did not submit his choice until 14 days after the official deadline. Defendants claimed they instituted a revised deadline that ended one day before Plaintiff submitted his election, thereby justifying his rejection. Plaintiff claimed violation of the covenant of good faith and fair dealing inherent in each contract because the Defendants accepted other late elections but rejected that of the Plaintiff. After finding that Plaintiff had standing to bring suit, the Court dismissed on summary judgment his claims for literal breach but allowed his claim for breach of the implied covenant of good faith and fair dealing to proceed because Defendants failed to show uncontroverted evidence supporting its decision to reject Plaintiff’s election while accepting others in the same narrow time frame.
