Plaintiffs, the purchaser of the Defendant litigation support company, brought suit for breach of a representation in an asset purchase agreement where the Defendant allegedly did not operate only in the usual and ordinary course of business prior to the transaction’s closing date. As employees of the Defendant undertook extensive activities to set up a competing entity before the agreement’s closing, the representation was clearly not true when made and the Defendant seller breached the asset purchase agreement. The normal and ordinary routine of conducting business does not include destroying business assets and planning to transfer the essence of the business to a competitor. Regardless, because the parties did not structure the transaction to secure the services of key employees or put in place noncompetition agreements, the Plaintiff purchaser was awarded only nominal damages.
