Carlyle Wins Complete Trial Victory in Earnout Dispute, Defeating Hundreds of Millions in Damages Claims and Securing $7 Million Judgment

Paul, Weiss won a rare and significant trial victory in the Delaware Court of Chancery on behalf of The Carlyle Group and related entities and individuals in an earnout dispute brought by Suresh Katta, the founder and former CEO of Saama Technologies, which Carlyle acquired in 2021. Carlyle prevailed on all claims, winning $7.3 million in damages from Katta for his misconduct in what is likely the first time a buyer defendant has both defeated earnout claims and won damages on a counterclaim in the Court of Chancery.

Katta sought hundreds of millions of dollars in damages on various theories, including nearly $100 million for Carlyle’s refusal to make an earnout payment Katta claimed he was owed. In the operative complaint, filed in January 2025, he alleged that Carlyle tricked him into agreeing to a reduced upfront purchase price by promising nearly $70 million in post-transaction payments the investment firm never intended to make. In a highly unusual approach for a buyer defendant in an earnout dispute, Paul, Weiss “flipped the usual script of so-called earnout litigation,” as Bloomberg Law reported, and filed counterclaims against Katta after uncovering extensive evidence of Katta’s misconduct in his bid to achieve the earnout. The team sought a declaratory judgment that no earnout was owed and requested damages for the harm Katta caused to Saama.

Following a five day trial in March 2026 Vice Chancellor Lori Will found that Carlyle’s objection to making the earnout payment was “substantively correct” and made in good faith, and that Katta was “singularly focused on the earnout,” leading him to manipulate contracts, offer unprecedented discounts, and sell products that did not yet exist in pursuit of his goal, “culminat[ing] in an unsustainable trajectory that impaired Saama’s product business.” As the court held, this “was not a flawed business strategy; it was bad faith.” Accordingly, the court entered judgment in Carlyle’s favor on Katta’s claims and granted Carlyle $7.3 million for Katta for his bad-faith efforts to secure the payment.

The Paul, Weiss team included litigation partners Andrew Gordon, Geoffrey Chepiga, Tiana Voegelin and Daniel Mason, and counsel Sabrina Hendershot.