Item 8.01. Other Events.
On November 30, 2016, we filed a complaint, or the Complaint, captioned
TA Operating LLC v. Comdata, Inc. and FleetCor Technologies, Inc.
, C.A. No. 12954-CB (Del. Ch.), in the Court of Chancery of the State of Delaware, or the Court of Chancery, against Comdata, Inc., or Comdata, and its parent, FleetCor Technologies, Inc., with respect to a notice of termination we received from Comdata on November 3, 2016. Based upon Comdata’s allegations that we had breached an agreement under which we agreed to install radio frequency identification, or RFID, technology at our travel centers, or the RFID Agreement, the notice purported to terminate a different agreement between us and Comdata under which we agreed to accept Comdata issued fuel cards through January 2, 2022, for certain purchases by our customers in exchange for set fees payable by us to Comdata, or the Merchant Agreement.
At a hearing held on December 14, 2016, the Court of Chancery denied our request for preliminary injunctive relief subject to Comdata’s agreement to continue providing services under the Merchant Agreement pending a final ruling from the Court of Chancery. On December 21, 2016, Comdata filed a counterclaim alleging that we defaulted under the RFID Agreement and that this alleged default allows Comdata to terminate both the RFID Agreement and the Merchant Agreement. In addition, beginning February 1, 2017, Comdata unilaterally began to withhold increased fees from the transaction settlement payments due to us. A trial was held during the week of April 3, 2017. Post-trial briefing concluded on May 22, 2017, and post-trial argument was held on June 16, 2017.
On September 11, 2017, the Court of Chancery issued its post-trial Memorandum Opinion. The Court of Chancery found that we are entitled to, among other things, an order requiring Comdata to specifically perform under the Merchant Agreement, and awarded damages to us and against Comdata for the difference between the higher transaction fees we have paid to Comdata since February 1, 2017 and what we should have paid during this period under the fee structure in the Merchant Agreement, plus pre- and post- judgment interest under applicable law. At trial, our expert estimated those damages to be approximately $30,715 per day (excluding interest). The Court of Chancery also found that the Merchant Agreement provides for an award of reasonable attorneys’ fees and costs to the prevailing party in a lawsuit enforcing any rights under the Merchant Agreement. We and Comdata have been directed to submit a form of final judgment with an accounting of TA’s damages and a proposed schedule for resolution of those fees and costs within ten days of the date of the Memorandum Opinion.
A copy of the Memorandum Opinion issued September 11, 2017 by the Court of Chancery is attached as Exhibit 99.1 to this Current Report. A copy of the press release we issued on September 11, 2017 regarding the Memorandum Opinion is attached as Exhibit 99.2 to this Current Report.
WARNING CONCERNING FORWARD LOOKING STATEMENTS
THIS CURRENT REPORT CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE WORDS SUCH AS “BELIEVE,” “EXPECT,” “ANTICIPATE,” “INTEND,” “PLAN,” “ESTIMATE,” “WILL,” “MAY” AND NEGATIVES OR DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS, INCLUDING SOME WHICH ARE BEYOND OUR CONTROL. FOR EXAMPLE,
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THIS CURRENT REPORT STATES THAT THE COURT OF CHANCERY FOUND THAT WE ARE ENTITLED TO AN ORDER REQUIRING COMDATA TO SPECIFICALLY PERFORM UNDER THE MERCHANT AGREEMENT, AND AWARDED DAMAGES TO US AND AGAINST COMDATA FOR THE DIFFERENCE BETWEEN THE HIGHER TRANSACTION FEES WE HAVE PAID TO COMDATA SINCE FEBRUARY 1, 2017 AND WHAT WE SHOULD HAVE PAID DURING THIS PERIOD UNDER THE FEE STRUCTURE IN THE MERCHANT AGREEMENT, PLUS PRE- AND POST- JUDGMENT INTEREST UNDER APPLICABLE LAW. COMDATA MAY APPEAL THE COURT
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