Delaware Chancery Court Cites Differences in Cash-Flow Assumptions as Cause for Large Discrepancy in Value
In this appraisal action to determine fair value, petitioner Ramcell Inc. exercised its appraisal rights in asking for a statutory appraisal of the value of its 155 shares of Jackson Cellular Telephone Co. Inc. The respondent, Alltel Corp. (dba Verizon Wireless), had converted the 155 shares at a value of $2,963 per share. “Respondent’s expert opines that Jackson’s per-share value was $5,690.92 at the time of the merger. Petitioner’s expert has offered two appraisal ranges, opining that, at the high end, Jackson’s per-share value was $36,016 on the merger date.” Both parties agreed that the DCF method should be the sole method for determining the value. The Delaware Chancery Court, using that method, determined the fair value of each share at $11,464.57. The court noted that the disparity in the parties’ valuations was due to disagreements as to the inputs to the DCF model and how they should be calculated.
Ramcell, Inc. v. Alltel Corp.
In this appraisal action to determine fair value, petitioner Ramcell Inc. exercised its appraisal rights in asking for a statutory appraisal of the value of its 155 shares of Jackson Cellular Telephone Co. Inc. The respondent, Alltel Corp. (dba Verizon Wireless), had converted the 155 shares at a value of $2,963 per share. “Respondent’s expert opines that Jackson’s per-share value was $5,690.92 at the time of the merger. Petitioner’s expert has offered two appraisal ranges, opining that, at the high end, Jackson’s per-share value was $36,016 on the merger date.” Both parties agreed that the DCF method should be the sole method for determining the value. The Delaware Chancery Court, using that method, determined the fair value of each share at $11,464.57. The court noted that the disparity in the parties’ valuations was due to disagreements as to the inputs to the DCF model and how they should be calculated.
In Re Cellular Tel. P’ship Litig.
In this coordinated action involving 13 partnerships that were involved in freeze-out transactions by AT&T of minority shareholders, AT&T breached its fiduciary duties and effectuated the freeze-out through an unfair process and by paying an unfair price. The freeze-out was subject to the entire fairness standard of review. AT&T bore the burden of proving that the freeze-out was entirely fair to the minority partners. AT&T failed in that proof and thereby sought to capture future value for itself. AT&T did not employ any procedures that insured fairness to the minority partners. The lead partner of the valuation firm had a long-standing relationship with AT&T, and internal AT&T personnel influenced the outcome of the valuation. The court determined the fair value of the interest as a remedy to the situation.
Delaware Chancery Court Rejects Partnership Valuation in a Freeze-Out as Unfair to Minority Partners
In this coordinated action involving 13 partnerships that were involved in freeze-out transactions by AT&T of minority shareholders, AT&T breached its fiduciary duties and effectuated the freeze-out through an unfair process and by paying an unfair price. The freeze-out was subject to the entire fairness standard of review. AT&T bore the burden of proving that the freeze-out was entirely fair to the minority partners. AT&T failed in that proof and thereby sought to capture future value for itself. AT&T did not employ any procedures that insured fairness to the minority partners. The lead partner of the valuation firm had a long-standing relationship with AT&T, and internal AT&T personnel influenced the outcome of the valuation. The court determined the fair value of the interest as a remedy to the situation.
DCF Projections Failed to Reflect Target’s Operative Reality, Chancery Says
In joint fiduciary-appraisal action centering on Sprint’s acquisition of minority interest in related entity, Chancery says merger was entirely fair and adopts respondent expert’s DCF analysis; huge value gap is 90% due to experts’ choice of projections.
ACP Master, Ltd. v. Sprint Corp.
In joint fiduciary-appraisal action centering on Sprint’s acquisition of minority interest in related entity, Chancery says merger was entirely fair and adopts respondent expert’s DCF analysis; huge value gap is 90% due to experts’ choice of projections.
DCF Projections Failed to Reflect Target’s Operative Reality, Chancery Says
In joint fiduciary-appraisal action centering on Sprint’s acquisition of minority interest in related entity, Chancery says merger was entirely fair and adopts respondent expert’s DCF analysis; huge value gap is 90% due to experts’ choice of projections.
Court’s Damages Model for SEP Infringement Fails Apportionment Rules
Federal Circuit invalidates infringement award where trial court’s damages model failed to filter out value to the patent in suit accruing from its being essential to wireless standard and failed to adjust its Georgia-Pacific analysis for standardization.
Commonwealth Sci. & Indus. Research Organisation v. Cisco Sys.
Federal Circuit invalidates infringement award where trial court’s damages model failed to filter out value to the patent in suit accruing from its being essential to wireless standard and failed to adjust its Georgia-Pacific analysis for standardization.
Inclusion of Inflated Purchase Price Does Not Doom Damages Calculation
District court finds expert’s damages calculation in securities case is not unreliable simply because it incorporates inflated purchase; expert also performed an event study and regression analysis to assess the effect of misrepresentation on inflated pri ...
In re Novatel Wireless Securities Litigation
District court finds expert’s damages calculation in securities case is not unreliable simply because it incorporates inflated purchase; expert also performed an event study and regression analysis to assess the effect of misrepresentation on inflated pri ...
Tax Court Favors Expert With Greater Industry Experience in Valuing Telecomm Company
Tax Court finds taxpayer’s expert, a CPA/ABV with substantial experience in the telecommunications business, more persuasive in valuing a 25% interest in a private wireless company using four traditional BV approaches plus a distribution-yield analysis.
Ringgold Telephone Co. v. Commissioner
Tax Court finds taxpayer’s expert, a CPA/ABV with substantial experience in the telecommunications business, more persuasive in valuing a 25% interest in a private wireless company using four traditional BV approaches plus a distribution-yield analysis.
Three Specific Elements for Goodwill Impairment Claims
Federal court dismisses class action complaint in securities fraud litigation for lack of specific allegations regarding the failure to recognize and report material impairment to goodwill values.
City of Sterling Heights Police & Fire Retirement System v. Vodafone Group Public Limited Co.
Federal court dismisses class action complaint in securities fraud litigation for lack of specific allegations regarding the failure to recognize and report material impairment to goodwill values.
Valuation Upheld Against Party That Fails to Use Independent Valuation Sources
Verizon Inc. had offered to buy MCHC’s majority holder, Palmer Wireless Holdings (Palmer), if Verizon’s initial public offering was successful and if Palmer could acquire 100% of the stock in all of the companies it held.
Montgomery Cellular Holding Co., Inc. v. Dobler
Verizon Inc. had offered to buy MCHC’s majority holder, Palmer Wireless Holdings (Palmer), if Verizon’s initial public offering was successful and if Palmer could acquire 100% of the stock in all of the companies it held.
Analysis Leads Chancery Court to Seek Its Own Valuation
The issue in this appraisal action was the value of the shares of two cellular companies (Janesville and Sheboygan).
In re U.S. Cellular
The issue in this appraisal action was the value of the shares of two cellular companies (Janesville and Sheboygan).
Available Line of Credit Evidences Ability to Pay
The California Court of Appeal considered whether Zaxis had the ability to pay a punitive damages award. The appellate court noted that while Zaxis had a negative net worth for accounting purposes, it had available $19 million cash on hand and a $50 million credit line.
Zaxis Wireless Communications, Inc. v. Motor Sound Corporation, et al.
The California Court of Appeal considered whether Zaxis had the ability to pay a punitive damages award. The appellate court noted that while Zaxis had a negative net worth for accounting purposes, it had available $19 million cash on hand and a $50 million credit line.
Skokos v. Skokos
At issue is the valuation of the marital property and the admittance of expert testimony.
Court Finds Valuation From Certified Expert Reliable
The valuation issue in this appeal of a marital dissolution property distribution concerns the couple's interest in two cellular telephone companies, one located in Little Rock ("Little Rock ...
Capitalization of Earnings Method Sans Discounts Upheld in Fair Market Value Determination
One of the primary issues in this marital dissolution appeal was the valuation of 310 shares of Cattron, Inc. stock, a radio communications company. In its analysis, the Pennsylvania Superio ...
Verholek v. Verholek
At issue is the valuation of husband's 310 shares of Caltron, Inc. and wife's expert's testimony about this valuation.