Valuation Underlying Controversial Stock Sale Satisfies Highest Scrutiny

BVLaw
Court Case Digests
January 28, 2020

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6531 Real Estate Agents and Managers
531210 Offices of Real Estate Agents and Brokers
breach of fiduciary duty
expert testimony, fair value, income approach, weighted average cost of capital (WACC), asset approach, breach of fiduciary duty, market approach, company-specific risk premium (CSRP), cost of equity, earnings before interest, taxes, depreciation, amortization (EBITDA), cost of debt, officer compensation, Cost of Capital Navigator, operative reality
Coster v. UIP Companies, Inc.
2020 Del. Ch. LEXIS 36; 2020 WL 429906
US
State Court
Delaware
Court of Chancery
Andy Smith, McLean Group LLC (defendants); Dr. Brett Margolin (rebuttal only, plaintiff)
McCormick

Summary

In breach of fiduciary duty action, court says stock sale passes enhanced fairness review; appraiser valuing real estate investment services company before sale is eminently qualified and knowledgeable about industry; capitalized cash flow method “generated a reliable indicator” of company’s value.

See Also

Coster v. UIP Companies, Inc.

Full Text of Court Cases
January 28, 2020

In breach of fiduciary duty action, court says stock sale passes enhanced fairness review; appraiser valuing real estate investment services company before sale is eminently qualified and knowledgeable about industry; capitalized cash flow method “generated a reliable indicator” of company’s value.