Recent Developments in Delaware Valuation Cases

BVResearch Pro
American Society of Appraisers Business Valuation Review™
Winter 2021 Volume 40, Issue 1 pp. 20-37
Gilbert E. Matthews, MBA, CFA

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valuation profession news
expert witness, discounted cash flow (DCF), delaware court of chancery, arm's length, Delaware Supreme Court

Summary

This article discusses current developments in Delaware case law as they relate to valuation. It reviews all relevant Delaware Supreme Court decisions since 2017 and all relevant Court of Chancery decisions since 2019. We discuss the emphasis being placed by the Delaware courts on using discounted cash flow for valuations in related party transactions, as well as the substantial reliance on transaction price as the valuation measure in arm's-length transactions that have a satisfactory negotiation process. We conclude with a discussion of the impact of these and prior Delaware decisions on the valuation community and comments on the role of expert witnesses.
Recent Developments in Delaware Valuation Cases
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