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Matt Furman offers insights in news article on right of first refusal decision

A Massachusetts Superior Court Business Litigation Session judge recently refused to invalidate a party’s contractual right of first refusal to purchase a railroad company involving real estate, even though the party had previously made contradictory sworn statements to a federal agency regarding its business relationship with the seller of the company.

While the judge said that he was “troubled” by the contradictory statements, there was no indication that the agency had ever adopted or relied on the statements. 

The judge rejected the would-be purchaser’s attempt to invalidate the right of first refusal also because it had withheld vital information to the seller regarding the status of the clause contained in a letter of intent between the seller and the competing purchaser.

Matt Furman told Massachusetts Lawyers Weekly that the judge’s ruling reinforces that a right of first refusal is a powerful contractual instrument that is difficult to invalidate if a holder has validly exercised it on the same terms and conditions as a bona fide third-party offer after receiving notice.  

“You would have to get really creative with a tort theory to try to get around a valid exercise by a holder,” he said.

Mr. Furman, a partner at the firm, concentrates his practice on real estate litigation, business disputes, and employment law.