In re GGP, Inc. Stockholder Litig.
Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield paid a sizable preclosing dividend followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.
The Delaware Chancery Court Erred in Dismissing Claims Regarding Appraisal Rights Disclosures in a Merger—Supreme Court Remands
Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield funded a sizable preclosing dividend which was paid by GGP to eligible shareholders, followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.
Robertson v. Hyde Park
This case was a partnership dispute where the defendant partners tried to buy out the plaintiff partners. On appeal before the New Jersey Superior Court Appellate Division, the defendants argued that the plaintiffs’ dissociation was wrongful and damages should be assessed, discounts for lack of control and marketability should be applied to the value, and the partnership value should be reduced to account for partnership outstanding debts and other amounts. The plaintiffs argued that the trial court erred by relying on the defendants’ expert’s report and not their expert’s report, refusing to increase the value by personal loans taken by the defendant partners, and failing to find that the partnership overpaid management and accounting fees. The appellate court affirmed the trial court with one exception, whether the partnership agreement disassociated properly. On that count, the appellate court determined that the disassociation was appropriate.
New Jersey Appellate Court Affirms Valuation of Shopping Mall, Disallows Any Control or Marketability Discounts, Affirms Proper Dissociation by Plaintiffs
This case was a partnership dispute where the defendant partners tried to buy out the plaintiff partners. On appeal before the New Jersey Superior Court Appellate Division, the defendants argued that the plaintiffs’ dissociation was wrongful and damages should be assessed, discounts for lack of control and marketability should be applied to the value, and the partnership value should be reduced to account for partnership outstanding debts and other amounts. The plaintiffs argued that the trial court erred by relying on the defendants’ expert’s report and not their expert’s report, refusing to increase the value by personal loans taken by the defendant partners, and failing to find that the partnership overpaid management and accounting fees. The appellate court affirmed the trial court with one exception, whether the partnership agreement disassociated properly. On that count, the appellate court determined that the disassociation was appropriate.
In Wrongful Dissolution, New York’s High Court Approves FMV Valuation
In wrongful partnership dissolution, New York high court finds, under applicable statute, exiting partner’s interest may be valued under FMV standard of value; where exiting partner’s interest is minority interest, DLOM and minority discount may apply.
Congel v Malfitano (II)
In wrongful partnership dissolution, New York high court finds, under applicable statute, exiting partner’s interest may be valued under FMV standard of value; where exiting partner’s interest is minority interest, DLOM and minority discount may apply.
Unilateral Partnership Dissolution Exacts Steep Price From Wrongdoer
New York appellate court says trial court erred when it declined to apply minority discount in determining “value” of minority shareholder’s interest in partnership where shareholder wrongfully dissolved partnership and buyout was not a fair value proceed ...
Congel v Malfitano (I)
New York appellate court says trial court erred when it declined to apply minority discount in determining “value” of minority shareholder’s interest in partnership where shareholder wrongfully dissolved partnership and buyout was not a fair value proceed ...
Expert Fee Dispute Devolves Into Malpractice Claim
In fee dispute, appeals court affirms trial court’s rejection of disgruntled client’s attempt to defend against accounting firm’s suit with allegations of malpractice; client failed to offer expert testimony to support attack on appraiser’s valuation.
Cohen & Company v. Breen
In fee dispute, appeals court affirms trial court’s rejection of disgruntled client’s attempt to defend against accounting firm’s suit with allegations of malpractice; client failed to offer expert testimony to support attack on appraiser’s valuation.
Plan Confirmation Hinges on Property Valuation
The Bankruptcy Court finds the debtor’s reorganization plan is not feasible because it fails to provide enough funds to pay in full the primary creditor’s secured claim; the plan rested on an improperly low valuation of the property that makes up the majo ...
In re Civic Partners Sioux City, LLC
The Bankruptcy Court finds the debtor’s reorganization plan is not feasible because it fails to provide enough funds to pay in full the primary creditor’s secured claim; the plan rested on an improperly low valuation of the property that makes up the majo ...
Court’s Discount Rates Don’t Overvalue Business Interests
Trial court did not overvalue husband’s interests in various businesses since it applied a DLOC whenever the husband did not have a 100% interest in the company and a DLOM that was consistent with expert testimony, state Court of Appeals finds.
Halliday v. Halliday
Trial court did not overvalue husband’s interests in various businesses since it applied a DLOC whenever the husband did not have a 100% interest in the company and a DLOM that was consistent with expert testimony, state Court of Appeals finds.
Chiu v. Chiu
New York court rejects application of discount for lack of marketability in fair value appraisal proceeding.
New York Court Rejects DLOM in Fair Value Proceeding
New York court rejects application of discount for lack of marketability in fair value appraisal proceeding.
Expert’s Market Valuation Tested Under Frye Standard
Court admits expert testimony under state rule similar to the Frye standard regarding wide range of fair market value indicators for subsidiaries.
Statutory Fair Value of Real Estate Holding Company Includes Transaction Costs, Taxes
Court considers whether statutory fair value appraisal should include transactional costs and tax effects of selling a company’s sole asset, a commercial office building.
Brynwood Co. v. Schweisberger
Court considers whether statutory fair value appraisal should include transactional costs and tax effects of selling a company’s sole asset, a commercial office building.
8000 Maryland, LLC v. Huntleigh Financial Services, Inc.
Court admits expert testimony under state rule similar to the Frye standard regarding wide range of fair market value indicators for subsidiaries.
Additional Support Based on Stock Options Considered
The California Court of Appeals, Fourth District affirmed the lower court’s decision to consider an award of additional child support based on stock option income until the option becomes exercisable. It rejected the wife’s argument that the additional ch ...
In re the Marriage of Kathleen Gaffney v. David Fyffe
The California Court of Appeals, Fourth District affirmed the lower court’s decision to consider an award of additional child support based on stock option income until the option becomes exercisable. It rejected the wife’s argument that the additional ch ...
Florida Sunrise, LTD v TRI-M Investments of South Florida, Inc
Florida Sunrise, the landlord, appeals a final judgment entered in favor of its former tenant on a counterclaim. We reverse, in part, solely as to the damage award.
Do Minority Discount and DLOM Apply in ‘Fair Value’ Analysis?
Are discounts for lack of control and marketability appropriate in a “fair value” analysis, i.e., in the context of withdrawing limited partners (and, by analogy, dissenting shareholders)?
East Park Ltd. Partnership v. Larkin, et al.
Court considers whether discounts for lack of marketability and control apply to “fair value” analysis ...