Massachusetts company sues Vicente over failed deal contract

Massachusetts-based Northempton Enterprises is suing Vicente, a law firm that specializes in cannabis, over a failed deal contract.

Northempton said it hired Vicente in 2022 to advise on a deal to sell its cannabis business to a company only identified as XYZ LLC. An asset purchase agreement was signed and then amended for a reduced price of $3.2 million. Northempton claims in the complaint that the amended contract should have included language that said if the deal didn’t close, XYZ would have to pay them for the legal fees and other damages. Instead, it only covered the legal fees.

The complaint stated that in the original agreement, there was such a clause. However, when the price changed, the language only addressed the legal fees and no other potential losses.

Northempton says it noticed the difference and brought the issue up to Vicente lawyer Sahar Ayinehsazian, who told them, “The agreement allows for more than just liquidated damages, so language under the amendment still allows for all other types of damages. While I am happy to change the language, I would urge you to communicate with buyer before doing so, as the attorneys’ fees piece of this agreement has been one of the cornerstone pieces of the overall agreement.”

The company’s complaint didn’t blame Vicente for the failed deal, but it did say it lost money as a result of the failed deal that it wasn’t able to claw back from the XYZ company due to the poor wording of the contract.

The complaint stated that during the deal talks, the seller’s market became a buyer’s market and the value of its business fell by $1 million. They said that they had to wind down its inventory, which caused the company to lose $60,000 a month in sales for 10 months, or $600,000. The attorney fees were $80,000.

Northempton claims to have suffered damages of $4.8 million, which they allege could have collected from the buyer if the original clause had carried over to the amended contract.

The complaint claims that the poorly drafted liquidation damages provision by Vicente was disastrous for the company and they want a jury trial.