Mogo Inc. v. Cricket Media Inc. - Motion to Dismiss Denied

SUPERI OR COURT OF THE STATE OF DELA WARE S HELDON K. R ENNIE J UDGE LEONARD L. WILLIAMS JUSTICE CENTER 500 NORTH KI NG STRE ET, SUITE 1 0400 WILMINGTON, DE 19801 Da te Sub mitted: November 12, 2025 Date Decid ed: February 26, 20 26 Micha el W. McDermott, Esquire Davi d B. A nth ony, Es quire Peter C. Mc Givney, Esq uire B ERGER M C D ERMOTT LLP 1105 N. Market S t., 11t h Flo or Wilm ing ton, De law are 19801 Attorneys for Pl aintiff. Kevin J. Manga n, Esquir e Zachary M urphy, Esq uire W OMBLE B OND D ICK INSON (US) LLP 1313 N. Market St., S uite 1200 Wilmingto n, Delawa re 19801 Attorney s for Defen dant. R E: M ogo, Inc., v. C ricket Me dia, Inc. C.A. No. N 25 C- 05 - 263 SKR CCL D Defe nda nt ’ s M otion to D ismi ss Pla intiff’ s Complai nt Dear Cou nsel: This l etter dec ision r esol ves Defenda nt ’ s Moti on to Dismi ss Pla int iff’ s Compl aint. For th e r easons e xpla ined belo w, the Mot ion is DENI ED. I. FA CTU AL AND P ROCEDUR AL BA CKGROU ND This action i nvolve s the alle ged nonpa yment of a de bt. O n or abou t June 21, 2019, Defe nda nt Crick et Media, Inc. (“Cricket”) execut ed a Sen ior Secu red Conve rtible Pr omissor y Note (the “ Pr omis sory Note”) in fa vo r of Plai ntif f Mogo

2 Inc. (“Mogo ”) in the amo unt of $1,77 7,940. 74. 1 As par t of the sa me issua nce, se vera l other i nvestor s (the “N oteho lders”) e nte red i nto sim ilar pr omis sory n otes (the “Note s”), to tal ing a $4,00 0,00 0 loan. 2 Cricke t, Mogo, and t he Noteho lders al so e xecuted a Secured Note Purchas e Agreement (the “Pu rchase Agreement”) un d er whic h Mogo a nd th e Note holder s rece ived a se curi ty inter est i n “[a] ll perso nal proper ty of [Cric ket], whet her prese ntl y exi sting or her eaf ter cre ate d or ac quir ed[.] ” 3 To facilitate the co lle ctive enf orcemen t of the group’ s securit y inte rest, Mo go — t he lar gest in div idua l debt hold er 4 — was desi gnat ed as the “C ollate ral Agen t” for th e Note hol ders. 5 Cric ket a lle gedl y mad e only one requ ired quarter ly payment before cea s ing payme nt on the debt. 6 The Pr omissory Note contain s two def initions of “Default ” rele vant her e. F ir st, a n “I nabi lity to Pa y De fau lt,” occur s if C ricket “admi ts in writ ing its ina bil ity to pa y debt s generall y as the y become due.” 7 Secon d, a “N onpaym en t Default,” occur s if Crick et “fa ils to pa y tim ely any of the pr incipa l, acc rue d intere st, or oth er am ounts due. .. and such fa ilur e shall co ntinu e for a peri od of 10 day s.” 8 1 D.I. 1 (hereinafter, “Compl.”), Ex. 2. At the time of the issuance, Mogo was known as Dif ference Capital Financial Inc. Compl. at ¶ 4. 2 Id., Ex. 2 at Ex. A. 3 Id., Ex. 2 at Ex. D. 4 See Id., Ex. 2 at Ex. A. 5 Id., Ex. 2 at § 7.1. 6 Id. at ¶ 25. 7 Id., Ex. 1 at § 5.3. 8 Id., Ex. 1 at § 5.1.

3 T o init iate an ac tio n for Non paymen t Def ault, however, M ogo require s the support of Not eholders hol ding at lea st two - thirds of the ou tstandi ng prin cipal amount of t he Note s. 9 Mogo i nit iated this acti on in M ay 20 25, to recov er the am ount due un der the Prom iss ory N ote. 10 The compla int asse rts a s ingle c ount fo r breach of contra ct, al leg ing various brea ches of bo th the Promi ssory Not e an d the Pur cha se Agree ment. 11 Cricket moved to d ismi ss un der Rule 12(b)(6). 12 Cen tral to this dispute is Mog o’ s allega tion that C ric ket bre ache d the P urchase A g reemen t b y faili ng to provi de infor mation regar din g the o ther Not eholder s. II. STANDARD OF REVIE W On a m otion to d ismiss u nder Super ior Co urt C ivi l Rul e 12(b)(6) “ [t]he le gal issue to be de cided is, wheth er a pla intif f ma y recover under a ny reas onab ly conce ivable set of circum stances su scep tible of proof. ” 13 Where such a mot ion i s brou ght a t the ple ading sta ge, “a tria l judge is not a r obed ga rden er emplo ying Rul e 9 Id., Ex. 1 at § 5. 10 Id. at Prayer for Relief ¶¶ 1 –4. 11 See Id. at ¶¶ 53 –59. 12 Cricket also moved to dismiss under Rule 12(b)(7), citing Mogo’ s failure to join the other Noteholders in connection with its pursuit of fees under Section 7.3 of the Purchase Agreement. D.I. 6 (he reinafter “Mot.”) 21 n.8. However, in its opposition and at oral argume nt, Mogo clarif ied that its c laim for fe es against Cric ket ar ises out of Sectio n 6.5 of the Promissory N ote. See D.I. 8 (hereinafter “Opp’n”) 21–25. Becaus e, as exp lained i n this letter opinion, Mogo has pled a claim for breach of contract, the Court need not address this issue at this time. 13 L&L Br oad. LLC v. T riad Br oad. Co., LLC, 2014 WL 1724769, at * 2 (Del. Super. Apr. 8, 2014) (quoting Slayton v. Clariant Corp., 10 A.3d 597, 601 (Del. 2010)).

4 12(b)(6) as a judic ial she ar to prune in dividua l the ories from an othe rwise hea lthi ly pled cl aim or coun terclaim.” 14 Instead, at thi s stage, “t he Cour t must con sider a cla im or cou nterclai m in its ent irety.” 15 III. ANAL YSIS The Co urt will all ow Mogo’ s s ingul ar count t o proc eed if it f inds tha t it has proper ly pled a theor y of b reach of co ntra ct. 16 In conduc ting this an alysis —r at her than leap into the nu ances of what written state ment s trig ger an “ Ina bili ty to Pay Defaul t ” or whe ther Mogo s hould be exc used from the co ntractua l require ments for a “ Nonpayme nt Default ”— the Co urt focuse s on Mogo’ s all egation th at Cricket breac hed the Pur chase Agr eemen t by refu sin g to pro vide i nformati on rega rdin g the other N otehol ders. 14 inV entiv Health Clinical, LLC v. Odonate Therapeutics, Inc., 2021 WL 252823, at *4 (Del. Super. Jan. 26, 2021). 15 Id. at *6. 16 T he Court is aware that, in some instances, pleading multiple theories of breach of contract under a single count could constitute an artful pleading tactic meant to pre serve claims that may not otherwise survive. See ET Aggr egator, LLC v. PFJE AssetCo Hldgs. LLC, 2023 WL 8535181, at *6 –8 (Del. Super. Dec. 8, 2023) (discussing concerns with another one-count complaint). However, in this instance, the Court finds that discovery under any surviving claim of breach of contra ct will likely le ad to rele vant infor mation regarding the other theories. For example, assuming each theory of breach had been pled separately, a finding that Cricket owed Mogo a duty to provide it with information about the other Noteholders would lead to the discovery of Cricket’ s payment or nonpayment of the other Notes and a dismissal of the other claims. Further assuming, for the sake of ar gument, that Cricket had not paid the other Noteholders, the interests of justice would demand allowing Mogo to resurrect a claim for Nonpayment Default afte r joining the other Noteholders. If Cricket had paid the other Noteholders, then Mogo’ s claim for a Nonpayment Default would not be barred by the majority holder requirement. In sum, Mogo’ s tactful p leading — in these ci rcumstan ces — does lit tle to ser ve strategi c pur poses.

5 Where, as he re, “ a m oti on t o dism is s hi nges on t he in terpreta tion of a con trac t, a tria l co urt m ay only gra nt the mot ion if t he defen dants’ inter pret atio n of t he contr act is ‘the only reason abl e cons tructio n as a m atte r of law.’” 17 Even if the co urt consi ders one par ty’ s interpr eta tion of a c ontra ct t o be m ore rea sonable, it is error on a 12(b)(6) motio n, “ to se lect the ‘ more reasonable ’ inter pre tati on as legally c ontr olling.” 18 Mogo p osits that a reasonable readin g of either Section 2. 2 or 5.1 of the Purchase Agreeme nt create s an o blig ati on f or Cricke t t o take actions t hat Mog o reaso nably re quests. 19 Sect ion 2.2 of t he Pu rcha se Agree ment s tates, in r ele vant part: [Cri cket] shall execute a nd delive r to [Mogo]. . . at any time and fro m time to time, all financing st atements, assignm ents, cont inuation financ ing state ments, termina tio n sta tements a nd other d ocumen ts an d instr ume nts, in form reas onab ly satisf actory to the Purcha sers and in any ev ent consi stent wi th t he te rms of t his A gree me nt, a nd [C ricket] shal l take all other acti on consi sten t with the te rms of thi s Agree men t, as [M ogo] m ay re as ona bly reque st, to perfect a nd contin ue pe rfe cte d, mainta in the prio rity o f or pro vide n otice of the se cur ity intere st of [Mogo ], for the bene fit of the [No teh older s], in the C ollater al. 20 Sect ion 5.1 of the P urchase A greeme nt re ads: Until a ll of t he No tes ha ve been indefeas ibly pai d in full i n ca sh or [conve rted], [Cric ket ] sha ll: . .. exec ute suc h fur ther i nstrume nts and docum ents, an d take suc h furth er ac tion, a s [M ogo] shal l reaso nabl y 17 LGM Hldgs., LLC v. Schur der, 340 A.3d 1 134, 1 1 43 (Del. 2025) (quoting VLIW T ech., LL C v. Hewlet t -Packar d Co., 840 A.2d 606, 615 (Del. 2003)). 18 Id. at 1 144 (quoting Appr iva S’holder Litig. Co., LLC v. EV3 Inc., 937 A.2 d 1275, 1292 (Del. 2007)). 19 Opp’n 16–19. 20 Compl., Ex. 2 at § 2.2.

6 reque st fr om time t o time to gi ve effec t to this Agr eement and ca rry ou t the tra nsac tions conte mplated he reb y. 21 Alter natively, Mogo c laims tha t there is a n implie d obli gation to provide i nformati on abou t the other Note holder s. 22 Cric ket conte nds th at the com mitm en t in Se ctio n 2. 2 is limite d by langua ge requir ing it to act only “to perfect a nd co ntinue perfe cted, ma intain t he pr ior ity o f or prov ide no tice of the sec urity in tere st of [M ogo], for the bene fit of the [Note hol der s] in the col lateral. ” 23 As to S ection 5.1, whi ch C ricke t label s the “ Furt her Assura nce s Clause,” 24 it ar gues that M ogo’ s reque sts for inf orm atio n “la cked r ea sona bl e necessity,” b ecause Mogo coul d have loc ated the N otehol der s or col lateral i tself. 25 The Co urt agree s tha t the la nguage of Sect ion 2.2 is a more l imited as suran ce that Cr icke t will ac t to insur e that the Noteholde rs’ sec uri ty int ere st rema ins perfe cted. How ever, Sectio n 5.1, by its plain term s, provide s a b road er assu rance that Cr icket w ill “ take suc h fur ther act ion as [M ogo] shall re aso nable req uest . . . to give ef fect to [the P urcha se Agre eme nt] a nd car ry out t he tra nsactions c onte mpl ated here by.” 26 None of the same lim iting lang uage is prese nt t her e, su gges ting tha t t he inte nt wa s to provi de a ssura nce bey ond t ho se ass ociated w it h Sec tio n 2.2. 21 Id., Ex. 2 at § 5.1. 22 Opp’n at 18–19. 23 Compl., Ex. 2 at § 2.2. 24 Mot. at 16. 25 Id. at 20. 26 Compl., Ex. 2 at § 5.1.

7 “Fur ther a ssura nces prov isions are a ‘m echa nism for conf irming ex isting righ ts and obligat ions,’ bu t the y can not ‘ be use d to creat e new contr actual comm itme nts or to r eso lve ambi gui ties. ’” 27 Both Cr icke t and Mo go cite c asel aw th at they a rgue co ntro ls the ap plicatio n of Sect ion 5.1 to this disp ute. One case cited by Mogo, R TN Invest ors, is par ticular ly instruct ive. 28 The loan agr eement i n that ca se requir ed th e deb tor to f urni sh t he cre ditor “ such other inf orm ati on, in suc h for as t he [cred itor] ma y reason ably re quest fr om time t o time.” 29 When t he debtor f ail ed to provi de the req ueste d financ ial state men ts t he cour t consider ed thi s alo ngs ide o ther breac hes and co nclude d tha t the c red itor, cou ld not rea sonably be expec ted to cont inue its own pe rfor ma nce. 30 Here, S ec tion 5. 1 provi des a br oad promi se that Cric ket will “e xec ute s uch furthe r instr ume nts a nd do cum ent s, an d take such furt her acti on, a s [Mogo] shal l reas onab ly re quest fr om time t o ti me t o gi ve eff ect to [the Pu rchase Agreeme nt] a nd to carr y out the tran sact ions contem plated hereb y.” 31 Although this langu age does not ex plic itly use the word “inf orma tio n,” the Co urt is n ot per sua ded tha t the absence 27 Lighthouse Behavioral Health Solutions, LLC v. Milestone Addiction Counseling, LLC, 2023 WL 3486671 (Del. Ch. May 17, 2023)(quoting Hawkins v. Daniel, 273 A.3d 792, 828–29 (Del. Ch. 2022)). 28 RTN Investors, LLC v. RETN, LLC, 201 1 WL 862268 (Del. Super. Feb. 10, 201 1). The other case Mogo cited in support of this point, Comerica Bank, relied on interpretation of a contractual provision defining certain information as the property of the party seeking it. Comerica Bank v. Global Payments Dir ect, Inc., 2014 WL 3779025, at **8–9 (Del. Ch. Aug. 1, 2014). 29 RTN In vestors, 2011 WL 862268 at *10. 30 Id. at *15. 31 Compl., Ex. 2 at § 5.1.

8 of t hat wor d limit s Cricket’s comm itment t o comply wit h reason able reque sts, inclu ding thos e for info rmation regardi ng other Note hol ders. Cric ket p oints to t hree case s t o argue that Sect ion 5. 1 c annot be inte rpre ted to incl ud e an obli gation to prov ide such info rmat ion. Ho wever, each of thos e ca s es invol ve far m ore oner ous reque sts tha n a me re requ est for infor ma tion: o ne in vol ve d an attempt t o force a comm ercially unreasona ble lease; 32 a nothe r sought to for ce a party t o drop a non frivolou s lawsuit; 33 a nd the third atte mpted to s hift a c ontractual obliga tion to a nother party. 34 The re quest her e is disti ngu isha ble. Mog o is the “ Coll ateral Agent ” fo r t he othe r Noteholder s. 35 Shoul d Mog o need to foreclos e on the C ollatera l, it must deter min e how to appl y the procee ds it hold s for the bene fit o f th ose Not eholders. Without know ing who the c urrent N ote hol der s are or ho w to con tac t the m, Mogo coul d not rea sona bly fulfill it s role un der the Purcha se A greeme nt. 32 See Liberty Pr op. L.P. v. 25 Massachusetts A ve. Pr op. LLC, 2008 WL 1746974, at 17 (Del. Ch. Apr. 7, 2008), aff ’d, 970 A.2d 258 (Del. 2009) (“T o get its desired end, Republic has to convin ce me that 25 Mass had a contr actual du ty to enter a le ase that n o co mmercial l essor would have accepted simply to facilitate Republic’ s exercise of its option. I am not convinced.”). 33 See Liberty Pr op. L.P. v. 25 Massachusetts A ve. Pr op. LLC, 2009 WL 224904, at *6–7 (Del. Ch. Jan. 22, 2009) (“More fundamentally, I think it strains the contractual words to turn Republic's refusal to abandon a non- frivolou s claim for spe cific performance of its Option right into a r efusal to t ake acti on to ef fect a con tractu ally co ntempl ated trans action.”). 34 See Lighthouse Behavioral Health Solutions, LLC v. Milestone Addic tion Counseling, LLC, 2023 W L 3486671 (Del. Ch. May 17, 2023) (“Neither the further assurances clause nor the cooperation clause imposes the obligation to obtain patient consents on Lighthouse.”). 35 Compl., Ex. 2 at § 7.1.

9 Cric ket also arg ues that the reques t is u nrea sona ble becau se M ogo co uld h ave used th e s igna ture pa ge of the P urchase Agr eeme nt 36 and a S che dule of P urchaser s 37 to loca te the Note hol ders i tself. While th ose docume nts lis t the name s of the original purch asers, they do not i nclu de con tact inf ormatio n or indic ate whethe r the N otes have be en tra nsfe rred ove r the la st six year s. 38 It is po ssible tha t, with en ough dilige nce, Mo go cou ld unila terally l ocate the ori gin al hol der s and ve rif y any subse que nt transf ers. Howeve r, M ogo barga ined for S ect ion 5.1 to av oid t he nece ssi ty of suc h a search. As the debtor, Cric ket has signifi cantly g reater acce s s to inform ation a bou t who is rec eiv ing (o r not rece ivin g) payme nt s. A r equ est for Cric ket t o provide the infor ma tio n it has, in acco rdan ce with its cont ractual comm itme nt, is no t unrea sonable. Sect ion 5.1 d oes not req uire Cricket to “ scour the Earth ” for the N oteholder s. Howe ver, in con necti on with it s comm itm ent to take such f urther ac tio n as M ogo reas onab ly re quests t o fulfill the pur pose s of t he Purcha se Agree ment, Cricket does have a contra ctual duty to provid e the inf ormation it posse sses rega rding other Note hol ders. Mogo al leges tha t Cri cket h as failed to do so. 39 This con sti tute s a we ll - 36 Id., Ex. 2 37 Id., Ex. 2 at Ex. A. 38 Opp’n 21 n.7. 39 Compl. at ¶ 51.

10 plead ed theory of b reach, whic h has pla usi bly dama ged Mogo by impr operl y limi ting its a bility to pursue c laim s for non payment. Because M ogo ha s pl ed a cla im that su rviv es under Rul e 12(b) (6), the C ourt will not, at thi s time, set abo ut pr uning Mogo’ s alter nat ive t heo rie s fo r b reach of contract. Accordingly, t he Mot ion is DENIED. IV. CONC LUS ION For the re asons set f orth ab ove, the M ot io n to D i sm is s i s DE NIE D. IT IS S O ORDERED THIS 26th D A Y O F FE B RUAR Y 2 02 6. _ ___ ___ ___ _ ___ __ ___ _ S he l d o n K. R e n ni e, J u d g e