Compass Lexecon Client The Carlyle Group Prevails in Earnout Dispute in The Chancery Court of Delaware

In Re Saama Technologies Litigation is an earnout dispute involving Saama Technologies, Inc. (“Saama”), a custom data analytics service provider. In 2021, Suresh Katta, as representative for the group of Saama’s stockholders (“Sellers”), sold control of Saama to Warrior Holdings, an entity controlled by the Carlyle Group (“Carlyle”). The agreement between the parties established an earnout to be paid to the Sellers contingent on Saama achieving certain revenue targets. Following the transaction, Mr. Katta claimed that Saama had achieved sufficient 2021 revenue for Sellers to receive the maximum earnout amount. When Carlyle objected, Mr. Katta filed a lawsuit. Carlyle also advanced counterclaims alleging breach of fiduciary duty against Mr. Katta.

Compass Lexecon supported experts Professor Gordon Klein of UCLA’s Anderson School of Management, Professor Peter Easton of the University of Notre Dame Mendoza College of Business, and industry expert, Mr. Jeff Hagins. Professors Klein and Easton provided opinions on accounting issues, including that only a small portion of the revenue for a large contract that Mr. Katta had directed Saama to claim as 2021 revenue was properly recognized under generally accepted accounting principles (“GAAP”). Mr. Hagins provided opinions on issues related to Saama’s software-as-a-service (“SaaS”) contracts, including with respect to the integration and completion of the large contract in order to inform the accounting experts’ determination of the appropriate amount of 2021 revenue claimed for purposes of the earnout.

A five-day trial was held in March 2026. On September 28, 2026, Vice Chancellor Lori Will of the Delaware Court of Chancery issued an opinion that was a complete victory for Carlyle. The Court ruled that no earnout payment is due to Mr. Katta. Additionally, on the breach of fiduciary duty counterclaim by Carlyle affiliates, judgment was entered against Mr. Katta. Notably, the Court’s opinion referenced the opinions and testimony of Professor Klein, Professor Easton, and Mr. Hagins.

Professor Klein, Professor Easton, and Mr. Hagins were supported by a Compass Lexecon team that included Adel Turki, Jennifer Milliron, Ed Grgeta, and Ahsan Kirmani.

Compass Lexecon worked with Carlyle’s counsel at Paul, Weiss, Rifkind, Wharton & Garrison LLP, including Andrew Gordon, Geoffrey Chepiga, Tiana Voegelin, Daniel Mason, Sabrina Hendershot, Emily Cox, Matt Clarida, and Gretchen Edelman.