Right Of First Refusal Narrowly Construed

In Prairie Street Capital, Inc. v. Afek et al., Prairie Street Capital, Inc. (“Plaintiff”) alleged that defendants breached Plaintiff’s contractual rights to exercise a right of first refusal option (the “ROFR Option”) upon the occurrence of a trigger event. The United States District Court of the Southern District of New York (the “Court”) held that Plaintiff’s broad interpretation of the ROFR Option triggers did not provide a sufficient factual basis to establish a breach of contract, upholding that rights of first refusal are to be narrowly construed under New York law.

Plaintiff filed suit against several defendants and each defendant moved separately to dismiss the relevant claims for failure to state a claim.