In re Multiplan Corp. Stockholders Litig.
This case dealt with a motion to dismiss the claims of the plaintiffs (by the defendants) in a stockholder suit against a special purpose acquisition company (SPAC). The claims were primarily that the plaintiffs’ claims were derivative, which failed to plead demand futility and that the business judgment rule applied. Many of the parties’ arguments centered around unique characteristics of a SPAC. In concluding that the entire fairness standard of review applied, the Delaware Chancery Court noted that “the fact that a reasonably conceivable impairment of public stockholders’ redemption rights—in the form of materially misleading disclosures—has been pleaded in this case.” The case was to go forward against all but two defendants.
Delaware Chancery Court Allows Breach of Fiduciary Suit to Move Forward on a SPAC
This case dealt with a motion to dismiss the claims of the plaintiffs (by the defendants) in a stockholder suit against a special purpose acquisition company (SPAC). The claims were primarily that the plaintiffs’ claims were derivative, which failed to plead demand futility and that the business judgment rule applied. Many of the parties’ arguments centered around unique characteristics of a SPAC. In concluding that the entire fairness standard of review applied, the Delaware Chancery Court noted that “the fact that a reasonably conceivable impairment of public stockholders’ redemption rights—in the form of materially misleading disclosures—has been pleaded in this case.” The case was to go forward against all but two defendants.
Expert’s Damages Calculation Based on Extensive Experience in Field Is Reliable, Court Finds
Court admits survey evidence, finding expert’s methodology conformed to accepted principles in the field and noting that technical objections go toward weight; court also admits both parties’ damages experts, finding they had extensive experience in the field and were both qualified; questions as to reliability of method “can be explored at trial.”
Geiger v. Creative Impact Inc.
Court admits survey evidence, finding expert’s methodology conformed to accepted principles in the field and noting that technical objections go toward weight; court also admits both parties’ damages experts, finding they had extensive experience in the field and were both qualified; questions as to reliability of method “can be explored at trial.”
Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLP
Court rejects plaintiff’s damages calculation related to sweeping fraud and contract breach allegations where plaintiff submitted expert report before court’s liability rulings and failed to offer revised expert report after liability trial; damages were not sufficiently tied to proven wrongs.
Plaintiff’s Overbroad Damages Calculation Prompts Court Not to Grant Award for Proven Wrongdoing
Court rejects plaintiff’s damages calculation related to sweeping fraud and contract breach allegations where plaintiff submitted expert report before court’s liability rulings and failed to offer revised expert report after liability trial; damages were not sufficiently tied to proven wrongs.
Court Looks to Owner’s ‘Proportionate’ Share in Business to Quantify Appreciation in Value
In quantifying marital portion of appreciation of owner spouse’s separate property, trial court relies on owner’s “proportionate” share in company but also considers expert testimony as to third parties’ efforts and owner’s role in generating revenue; court rejects passive factor analysis.
Herbert v. Joubert
In quantifying marital portion of appreciation of owner spouse’s separate property, trial court relies on owner’s “proportionate” share in company but also considers expert testimony as to third parties’ efforts and owner’s role in generating revenue; court rejects passive factor analysis.
Goodwill Determination Turns on Classification of Auction Business
Appeals court affirms trial court’s finding that all the goodwill in husband’s auction business is nontransferable where the husband is the only licensed auctioneer and the sole shareholder of the company and allows for expansion of concept of profession.
McCarter v. McCarter
Appeals court affirms trial court’s finding that all the goodwill in husband’s auction business is nontransferable where the husband is the only licensed auctioneer and the sole shareholder of the company and allows for expansion of concept of profession.
Glaring Unfamiliarity With Patent Law Disqualifies Expert
District court disqualifies proffered expert under all the Daubert factors, finding he lacked any understanding of patent cases and the dominant legal principles; he applied the discredited 25% rule of thumb and the entire market value rule, failed to pro ...
Info-Hold, Inc. v. Muzak LLC
District court disqualifies proffered expert under all the Daubert factors, finding he lacked any understanding of patent cases and the dominant legal principles; he applied the discredited 25% rule of thumb and the entire market value rule, failed to pro ...
Court Reproves Spouse’s Efforts to Lower Value of Community Business
California appellate court affirms trial court’s rejection of husband’s motion to value the community business at separation rather than at trial; the latter is the presumed valuation date under state law and the husband’s request was not “good cause,” bu ...
Valuation of Family Business Survives Expert’s Deviation From Industry Standards
Court of Appeals rejects husband’s claim that trial court erred in valuing interest in family business based on wife’s expert’s computation, which deviated from industry standards and included discounts (DLOM, DLOC, personal goodwill) based on expert’s ag ...
Charles v. Charles
California appellate court affirms trial court’s rejection of husband’s motion to value the community business at separation rather than at trial; the latter is the presumed valuation date under state law and the husband’s request was not “good cause,” bu ...
Russell v. Russell
Court of Appeals rejects husband’s claim that trial court erred in valuing interest in family business based on wife’s expert’s computation, which deviated from industry standards and included discounts (DLOM, DLOC, personal goodwill) based on expert’s ag ...
Hayden v. Pittendrigh
Court dismisses wife’s claim fraud against the husband, finding that she accepted $1 million for her share in the marital business, based on a limited appraisal, and waited too long after finding out the company sold for $54 million to bring her suit.
Reasonable Compensation Analysis Must Incorporate Applicable Legal Test
Tax Court finds CEO compensation reasonable under the independent investor test when return on equity approaches 20% but finds -15% return unacceptable and adjusts compensation to result in 10% return.
Kehrin v. Kehrin
Husband’s valuation expert incorrectly reduced the hard assets (cash and accounts) of an ongoing business by a personal goodwill value.
Multipak Corp. v. Commissioner
Tax Court finds CEO compensation reasonable under the independent investor test when return on equity approaches 20%, but finds negative 15% return unacceptable, and adjusts compensation to result in 10% return.
Broker vs. BV Expert Value License Bureau for Divorce: Who Is More Credible?
Divorce court adopts a broker’s net asset value for licensing bureau, finding that its lack of transferability was key applying to this approach versus a BV expert’s capitalization/excess earnings analysis.
Haynes v. Haynes
Divorce court adopts a broker’s net asset value for licensing bureau, finding that its lack of transferability was key applying to this approach versus a BV expert’s capitalization/excess earnings analysis.
Court Calls Expert Statutory Fair Value ‘Too Good to Be True’
Court reduces statutory fair value valuation of minority shareholder’s interest due to expert’s failure to account for company’s financial troubles and fraud.
Encompass Teleservices, Inc. v. Sheets
Court reduces statutory fair value valuation of minority shareholder’s interest due to expert’s failure to account for company’s financial troubles and fraud.
Is a Court-Appointed Appraiser Protected From Malpractice?
Appraiser sued for malpractice, claims quasi-judicial immunity.