Delaware Business Litigation Report

Delaware Supreme Court Explains Setoff And Recoupment

Finger Lakes Capital Partners LLC v. Honeoye Lake Acquisition LLC, No. 42, 2016 (November 14, 2016)

This decision explains the difference between a defendant’s right of setoff and recoupment. The key difference is that the right of setoff arises out of an independent transaction, while recoupment must be based on the same facts that support the main claim. Another difference concerns the statute of limitations.  Setoff is subject to a three-year statute of limitations, while time-barred claims can be considered for recoupment when they arise out of the same factually-related transaction as the plaintiff’s claim.   

Share