The fair value of cornfields in Dela. appraisal law

BVWireIssue #54-4
March 28, 2007

The Delaware Chancery Court may be showing a preference for academic research by two University of Pennsylvania professors, Hamermesh and Wachter.   For example, at the most recent AICPA National BV conference, V. C. Donald Parsons mentioned that several of his fellow Vice Chancellors were off studying the professors’ paper on the Implicit Minority Discount at a seminar sponsored by UPenn’s Institute for Law and Economic Research (see BVWire #51-2).  

And then V.C. Strine, in his recent “landmark” Delaware Radiology opinion, noted the “thoughtful academic paper” by the same two authors on “The Fair Value of Cornfields in Delaware Appraisal Law,” which explains why fair value must include not only the present value of a firm’s existing assets—but also the future opportunities, known or knowable at the time, to reinvest free cash flow.   For a copy of the article, click here.

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