Delaware Supreme Court dissent blasts Chancery in option valuation case

BVWireIssue #166-3
July 27, 2016

Last year, the Delaware Court of Chancery issued a memorable ruling over a company’s valuation of options to buy some spinoff subsidiaries. The court ruled in favor of the option holders and criticized the company and its valuation experts over a “new low” in terms of “motivated” valuations. The company appealed.

Blistering dissent: The Delaware Supreme Court has affirmed the decision, but one judge has given an equally memorable dissenting opinion and did not mince words about her disapproval of the Chancery’s factual findings (Cdx Holdings, Inc. v. Fox, 2016 Del. LEXIS 334 (June 6, 2016)).

More details of the case will appear in the September issue of Business Valuation Update. An extended discussion of the case and the full court opinion will be available at BVLaw in September as well. For a digest of the Chancery’s decision, Fox v. CDX Holdings, 2015 Del. Ch. LEXIS 194 (July 28, 2015), click here.

Extra: Speaking of options, there will be a webinar today, July 27, Valuation of Options and Option-Like Instruments, with Oksana Westerbeke and Jared Hannon, who are both with Grant Thornton.

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