A paper analyzes what it calls “critical mistakes” in two Delaware Supreme Court decisions concerning appraisal rights. In both cases, the Supreme Court insisted that it did nothing more than apply “established principles of corporate finance,” but, in analyzing the financial ideas and concepts at play, the Supreme Court made four serious errors, say the authors. They contend that the Supreme Court ignored the differences between how public markets price risk and how private parties (particularly financial sponsors) price risk. Among the other mistakes is that the Supreme Court “treated company valuation as a mechanical, arithmetical calculation, downplaying the essential role of human judgment.” The paper, “The Flawed Corporate Finance of Dell and DFC Global,”
is by Charles Korsmo
(Case Western Reserve University School of Law) and Minor Myers
(Brooklyn Law School). Digests and full opinions of both cases are available at BVLaw.
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