On May 20, 2026, the Second Department issued a decision in GPB Capital Holdings, LLC v. Dibre, 2026 NY Slip Op. 03150, holding that the failure to exercise best efforts constituted a breach of the covenant of the implied duty of good faith and fair dealing, explaining:
Contrary to the plaintiffs’ contention, the Supreme Court properly denied dismissal of the fourth counterclaim, alleging breach of the implied covenant of good faith and fair dealing. The fourth counterclaim alleged, among other things, that the master agreement required the parties to exercise their best efforts to obtain approval from manufacturers for the sale of the subject dealerships to the plaintiffs and that the plaintiffs purposely failed to comply with their best-efforts obligations in order that it result in a sale of the subject Dealerships to third parties. The implied covenant of good faith and fair dealing embraces a pledge that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract and is breached when a party acts in a manner that deprives the other party of the benefits of the contract. Here, accepting the facts as alleged as true, and according the defendant the benefit of every possible favorable inference, the fourth counterclaim sufficiently alleged that the plaintiffs sought to prevent performance of the agreements with the defendant or to withhold the benefits of those agreements from the defendant.
(Internal quotations and cittions omitted).