Chancery Bases Fair Value Calculation on Income-Based Model

Business Valuation UpdateVol. 23 No. 2
BVLaw Case Update
February 2017

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6022 State Commercial Banks
522110 Commercial Banking
shareholder dissent/oppression
beta, discount rate, expert testimony, size premium, capitalization of net income, management projections, market approach, merger price, growth rate, guideline company method, capital asset pricing model (CAPM), equity risk premium (ERP), arm's length, comparable transactions method
Dunmire v. Farmers & Merchants Bancorp of W. Pa.
2016 Del. Ch. LEXIS 167
November 10, 2016
US
State Court
Delaware
Court of Chancery
Joseph L. Hopkins (petitioners); Daniel R. Van Vleet (respondent)
Bouchard

Summary

Flawed sales process makes merger price an unreliable indicator of fair value for statutory appraisal, Chancery finds; in accord with party experts, court uses discounted net income approach and adopts most of respondent expert’s inputs for its valuation.

See Also

Chancery Bases Fair Value Calculation on Income-Based Model

Court Case Digests
November 10, 2016

Flawed sales process makes merger price an unreliable indicator of fair value for statutory appraisal, Chancery finds; in accord with party experts, court uses discounted net income approach and adopts most of respondent expert’s inputs for its valuation.