This case involves two American companies that held a combined majority interest in a California-based mobile telephone company. The two companies sought an outside investor to infuse additional capital into one of the companies. The companies approached a wealthy billionaire who was the chairman of an American telecommunications company with operations (through subsidiaries) throughout North America. The billionaire expressed an interest in acquiring 100% of the company that needed capital, but the two companies insisted on retaining a minority interest in the company and on participating in any “upside” that might result from a future public offering of its shares. After several months of negotiations, both parties entered into several agreements, under which the billionaire’s company invested over $80 million into the company and acquired more than half of the interest in the company. The two companies retained the combined, left over indirect interest in the company. As a result of the transaction, the parties held their interests in the company through a newly formed liability company. One of the agreements made in connection with the investment in the company contained a provision that if the billionaire consolidated his North American telecommunications interests into one entity, the two companies would have the right to exchange their units in the new entity for equity shares of the new entity. The billionaire consolidated his telecommunications interests and the two companies got the right to exchange their units in the new entity for shares of the company that was a spin-off of the billionaire’s company. The exchange never happened. According to a purchase agreement that the parties made some years later, the two companies sold their units to the billionaire’s spin-off company for cash. The purchase agreement had a clause which released the billionaire’s company (and its affiliates, shareholders and agents) from all causes of action and lawsuits arising out of the agreement and resulting from the ownership interest in the new entity or their having taken or failed to take any action in any capacity on behalf of the new entity in connection with the business of the new entity. The two companies filed a lawsuit, claiming that they had been given inaccurate financial information about the spin-off company that fraudulently induced them to sell their interest in the new entity. The two companies claimed that if they had exchanged their shares in the new entity for shares in the spin-off company instead of selling them for cash, they would have received nearly half a million in stock in the spin-off company.