## Facts

- ADFlex Solutions, Inc. manufactured components for computer and communications products and faced cash shortages and declining financial results.
- ADFlex retained FleetBoston Robertson Stephens, Inc., an investment banking and financial advisory firm, to help raise capital and evaluate strategic alternatives; proposed private placements were not completed.
- While ADFlex explored a potential merger with Innovex, Inc. and other parties, Robertson Stephens continued advising ADFlex regarding strategic options, including the possible Innovex transaction.
- On June 7, 1999, ADFlex and Robertson Stephens executed a written engagement agreement for an exclusive financial advisory and investment banking engagement covering ADFlex’s exploration of strategic alternatives, including a sale or business combination such as a merger.
- In September 1999, Innovex and ADFlex consummated a merger in which Innovex acquired 100% of ADFlex’s voting stock.
- Robertson Stephens claimed the merger triggered the agreement’s transaction-based fee; defendants refused payment, asserting Robertson Stephens neither initiated the deal nor introduced the parties and that merger discussions predated the engagement.
- Robertson Stephens sued for breach of contract and moved for summary judgment; defendants moved to exclude certain evidence as a discovery sanction, and Robertson Stephens sought attorney’s fees.

## Issues

1. Whether the engagement agreement unambiguously required payment of a transaction fee upon consummation of the ADFlex–Innovex merger.
2. Whether payment depended on Robertson Stephens being the “procuring cause” of the merger or having introduced ADFlex to Innovex.
3. Whether evidence should be excluded as a sanction for alleged discovery failures.
4. Whether Robertson Stephens was entitled to attorney’s fees.

## Decision

- The court granted summary judgment for Robertson Stephens on liability and entitlement to the transaction fee.
- The court held the engagement agreement was unambiguous and was triggered by consummation of the merger.
- The court rejected defendants’ argument that Robertson Stephens had to be the procuring cause or the introducer of the transaction to earn the fee.
- The court denied defendants’ motion to prohibit use of evidence.
- The court denied Robertson Stephens’ request for attorney’s fees.

## Legal Principles

- Unambiguous contracts are enforced according to their plain terms, and interpretation may be resolved on summary judgment when no genuine dispute of material fact exists.
- A court will not imply a “procuring cause” or “introduction” condition into a transaction-fee engagement agreement when the written contract does not state such a requirement.
- The fact that transaction discussions began before execution of an engagement agreement does not defeat fee entitlement when the agreement covers the relevant transaction type during the engagement and the triggering transaction is consummated within that scope.
- Evidentiary exclusion as a discovery sanction is discretionary and may be denied when exclusion is not warranted under the circumstances presented.
- Attorney’s fees are not awarded absent a contractual provision or other legal basis authorizing recovery.

## Conclusion

The court enforced the investment-banking engagement agreement as written, holding that consummation of the ADFlex–Innovex merger triggered Robertson Stephens’ success fee without any requirement that it originated or caused the deal, while denying both evidentiary exclusion and attorney’s fees.


FleetBoston Robertson Stephens, Inc. v. Innovex, Inc., 172 F. Supp. 2d 1190 (D. Minn. 2001)