Owen v. Cannon
In statutory appraisal, Chancery affirms need for tax affecting in calculating projected free cash flows for DCF model; “operative metric” under Kessler model is amount of funds available for distribution to shareholders, not actual distributions made.
Chancery Assigns Secondary Role to Post-Merger DCF
In an appraisal action, Chancery says merger price stemming from robust sales process is best indicator of value; court’s own DCF valuation “is close to the market,” but problematic projections make it more suitable as a check on the sales-derived price.
Can a Valuation Firm Serve as Expert Witness?
Chancery says defendant’s valuation expert cannot be corporate entity, i.e., its investment banker, because only a biological person may serve as an expert witness; but firm may substitute a managing director provided he first has adopted expert reports.
TWC I, L.L.C. v. Damos
Appeals court affirms fair value determination in statutory appraisal, finding trial court properly assessed expert testimony against background of seller’s financial condition and circumstances surrounding sale; purchase price was relevant consideration.
Merlin Partners LP v. AutoInfo, Inc.
Chancery agrees with company expert’s reliance on merger price as best estimate of fair value of company where DCF and comparable companies analyses lack reliable data, but court rejects downward adjustment for purported cost savings related to merger.
Giaimo v. Vitale (II)
In dissenting shareholder case, appellate court affirms application of DLOM to statutory fair value of real estate holding companies, as well as present-value discount for taxes on built-in gains (BIG).
Use of Asset-Level Deductions Hinges on Business Strategy
State’s high court strikes down district court’s fair value determination, finding reliance on prior law prohibiting use of deductions was misguided where company pursued strategy of selling off real estate and other assets at time of triggering event.
Delaware Chancery Orders Disclosure of Nonexpert Internal Valuations
In discovery dispute over prelitigation valuation-related information, Chancery orders dissenting shareholders to disclose internal assessments of stock value finding information likely is admissible reflecting “real-world” opinion of “astute” investors.
In re Dole Food Co. (Dole II)
Chancery says defendant’s valuation expert cannot be corporate entity, i.e., its investment banker, because only a biological person may serve as an expert witness; but firm may substitute a managing director provided he first has adopted expert reports.
In re Ancestry
In an appraisal action, Chancery says merger price stemming from robust sales process is best indicator of value; court’s own DCF valuation “is close to the market,” but problematic projections make it more suitable as a check on the sales-derived price.
Multimillion-Dollar Personal Goodwill Allocation Leaves Court Stunned
Court says defendants were unjustly enriched when they allocated 40% of the price a competitor paid for assets of and to settle lawsuit with their company to personal goodwill where they also received compensation for consulting services and noncompetes.
Utah Resources International, Inc. v. Mark Technologies Corp.
State’s high court strikes down district court’s fair value determination, finding reliance on prior law prohibiting use of deductions was misguided where company pursued strategy of selling off real estate and other assets at time of triggering event.
In re Dole Food Co. (Dole I)
In discovery dispute over prelitigation valuation-related information, Chancery orders dissenting shareholders to disclose internal assessments of stock value finding information likely is admissible reflecting “real-world” opinion of “astute” investors.
Potok v. Rebh
Court says defendants were unjustly enriched when they allocated 40% of the price a competitor paid for assets of and to settle lawsuit with their company to personal goodwill where they also received compensation for consulting services and noncompetes.
DE Chancery Plumbs Merger Price for ‘Speculative Value Elements’
In statutory appraisal action, Chancery scrutinizes merger price for downward or upward adjustment based on improper inclusion of synergistic value or exclusion of value stemming from business opportunities arising prior to consummation of merger.
Lack of Cash Flow Projections Compels Use of DCCF
In statutory appraisal action, Chancery agrees with experts that lack of management cash flow projections precludes use of DCF analysis, and adopts DCCF method resolving valuation disputes related to experts’ inputs and calculations.
Valuations Underpin DE Chancery’s Ruling in Going-Private Merger
DE Supreme Court affirms use of business judgment review where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor confirmed merger was favorable to minority stockholders.