A U.S. court on Monday fast-tracked Tiffany & Co’s lawsuit against French luxury goods conglomerate LVMH for trying to back out of its $16 billion deal to acquire the jeweler.
Delaware Chancery Court Vice Chancellor Joseph Slights said he would set a four-day trial beginning Jan. 5, 2021, which is after the Nov. 24 “drop-dead” date for the biggest luxury merger deal to close but before antitrust approvals begin to expire.
LVMH’s acquisition of Tiffany hit the rocks this month after the Louis Vuitton owner said it could no longer complete the purchase, citing an intervention by the French government and the U.S. jeweler’s weakening performance due to COVID-19.
Slights said he hoped both Tiffany and LVMH could have “productive discussions to avoid the need for litigation,” referring to a potential settlement.
Tiffany had pushed for a trial before Nov. 24. The French luxury goods conglomerate argued for one beginning in March or April of next year.
In a statement, LVMH said it is “fully confident” it will be able to defeat Tiffany’s accusations and convince the court that the conditions for the deal are no longer met.
“In the coming months, LVMH will demonstrate to the American justice system that the mismanagement of Tiffany during the COVID-19 crisis constitutes a material adverse effect,” according to a statement.
Tiffany’s chairman Roger Farah said in a statement that it has acted in “good faith.”
Ed Micheletti, who is representing LVMH, said Tiffany was pretending the pandemic has had no financial impact on its business.
“It’s hard to see how they can say that with a straight face,” he said.
Rick Pepperman, an attorney representing Tiffany, said LVMH was seeking to force Tiffany into a renegotiation.
“That is what we suspect LVMH and Bernard Arnault really want, they want to acquire Tiffany but at a lower price than what they agreed to last November,” Pepperman said.
The decision is Slights’ first time weighing in on the broken deal, the most high-profile of a series of abandoned transactions in the wake of the COVID-19 pandemic.
Although the trial is now scheduled to occur after the deal expires, LVMH said in court papers that it would honor so-called “specific performance” – closing the deal – if the court found that it could not abandon it.
Slights said during Monday’s hearing that is the preferred course of action compared to monetary damages.