This article discusses two 2020 Supreme Court decisions and eight decisions by the Court of Chancery.
In a sharp rebuke, the Delaware Supreme Court recently overturned the Court of Chancery’s confounding decision in the Aruba Networks statutory appraisal case to use the unaffected market price as the sole indicator of fair value.
A protracted Minnesota buyout dispute involving the heirs to a local grocery store empire, Lunds & Byerlys, may have reached the end following a recent ruling from the state appeals court. The reviewing court upheld the trial court’s decision to grant the minority shareholder’s request for a buyout as well as the court's fair value determination.
We’ve followed the continuing tale of New York’s inconsistent position with respect to the discount for lack of marketability in fair value proceedings (for example, see this coverage).
The Minnesota appeals court recently upheld the district court’s buyout order and fair value determination related to a well-known local grocery store chain, Lunds & Byerlys.
A paper analyzes what it calls “critical mistakes” in two Delaware Supreme Court decisions concerning appraisal rights.
An analysis that compares appraisal rights in the U.S., France, and Romania is in the University of Pennsylvania Journal of Business of Law.
Delaware appraisal decisions in recent years have effectively endorsed the concept that the price paid in an arm’s-length transaction is “fair value” when there has been a “robust” sales process. This article examines the “troubling” ruling in which the court based its appraisal solely on the unaffected market price.
It is common practice for proxy statements to contain fairness opinions that are dated weeks (or months) prior to the mailing date. Typically, they are not reviewed in the interim, which can be a problem.
With the landmark rulings in DFC Global and Dell, the Delaware Supreme Court has given its “full-throated endorsement” of market efficiencies by declaring the deal price (minus synergies) a strong indicator of statutory fair value, say two new statutory appraisal opinions from the Court of Chancery.
Delaware fair value proceedings have predominantly adopted the erroneous assumption that capital expenditures should equal the sum of depreciation and amortization in determining terminal value. Here’s an analysis of these flawed decisions.
After the petitioners in a statutory appraisal action recently lost big, they undertook a multifaceted assault on the Delaware Court of Chancery’s decision to use the unaffected market price as the indicator of value. Their motion for reargument went nowhere.
A few months ago, in a statutory appraisal case, the Delaware Court of Chancery made news when it used the unaffected market price as the indicator of fair value.
In a recent presentation by attorneys from Cadwalader, it’s clear that appraisal rights continue to be an important topic in the M&A world.
In the U.S., there has been a surge of appraisal petitions and appraisal arbitrage, but this is not the case in the EU, according to a paper by Alexandros Seretakis (Trinity College, Dublin).
Since the Delaware Supreme Court issued its landmark Dell appraisal decision (see prior coverage), the Delaware courts have issued three appraisal decisions—Aruba, AOL, and SWS—which, unlike Dell, assigned no weight to the deal price in setting fair value below the deal price.
Recent rulings from the Delaware Supreme Court make it seem as if the discounted cash flow analysis has lost its top ranking among valuation methodologies in statutory appraisals involving publicly traded companies. Not exactly.
“The Anna Karenina principle is alive and well in the Delaware courts,” according to a paper that explores statutory rights of appraisal and the search for the sometimes “elusive” concept of fair value.
The Delaware Court of Chancery recently had an opportunity to put into practice the directives the state’s high court had issued in DFC Global and Dell in terms of calculating fair value in a statutory appraisal proceeding.
Twice, in 2017, the Delaware Supreme Court struck down statutory appraisal rulings by the Delaware Court of Chancery that dismissed the importance of the market price.
Management projections are the sine qua non of a discounted cash flow analysis, and, in a recent statutory appraisal action involving the pet product giant PetSmart, the Delaware Court of Chancery found they did not cut the mustard. The court called the projections, “at best, fanciful,” and concluded the most accurate measure of fair value was the merger consideration.
The use of the Delaware block method in Tennessee recently came under attack in a case involving a closely held Nashville, Tenn.-based media company whose controlling shareholders had pursued a squeeze-out merger and later asked the trial court for a judicial appraisal of the dissenting shareholders' interest.
In a statutory appraisal action, the Delaware Court of Chancery recently found the deal price did not reflect fair value because the sales process was suboptimal. Certain other methods the parties' experts used also were inadequate to the task, the court said.
The whole is greater than the sum of its parts. Perhaps Chancellor Bouchard thought of Aristotle when he recently ruled in a statutory appraisal action that, even though the results of three common valuation techniques were unreliable indicators of value, in combination they established fair value.
In reviewing one of the Delaware Court of Chancery's most noteworthy rulings from 2015, one judge on the state Supreme Court wrote a stinging critique of the trial court's analysis.