In re Appraisal of Jarden Corp. (I)
Court finds record shows unaffected market price is best evidence of fair value; court says company expert’s efficient market analysis and event study provide strong support for use of market price; court’s own DCF analysis generates value close to market price, thus corroborating market price.
Court of Chancery Rules Unaffected Market Price Is Best Evidence of Fair Value
Court finds record shows unaffected market price is best evidence of fair value; court says company expert’s efficient market analysis and event study provide strong support for use of market price; court’s own DCF analysis generates value close to market price, thus corroborating market price.
Kendall Hoyd & Silver v. Trussway Holdings
Delaware Court of Chancery finds DCF analysis is the best way to achieve fair value in a statutory appraisal case arising out of a contested merger; court’s analysis leans heavily on company expert’s analysis regarding contested inputs, including projections, beta, and terminal value.
Court Chooses DCF to Determine Fair Value in ‘Straightforward’ Appraisal Case
Delaware Court of Chancery finds DCF analysis is the best way to achieve fair value in a statutory appraisal case arising out of a contested merger; court’s analysis leans heavily on company expert’s analysis regarding contested inputs, including projections, beta, and terminal value.
Court Rejects Expert’s Reliance on Other Celebrity Royalty Agreements to Develop Damages Analysis
In IP case, appeals court upholds exclusion of expert testimony; one expert’s damages analysis was based on speculative assumptions as to link between increase in defendant’s revenue and infringement; second expert’s analysis was inadmissible, hinging on first expert’s unreliable opinion.
Medtronic, Inc. v. Commissioner (II)
8th Circuit says Tax Court failed to do the required comparability analysis between selected uncontrolled license arrangement and contested intercompany licenses, making it impossible to say whether CUT was the best method for calculating arm’s-length royalty rates in transfer pricing case.
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Delaware Supreme Court balks at Court of Chancery’s Dell decision
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.
2nd Circuit Affirms Nixing of Award Due to Bad Yardstick Analysis
Appeals court validates nixing of future lost profits award where expert calculated damages for a startup company based on revenues of market leader; court finds expert failed to use reasonable comparator, making his yardstick analysis legally unsound.
Washington v. Kellwood Co. (IV)
Appeals court validates nixing of future lost profits award where expert calculated damages for a startup company based on revenues of market leader; court finds expert failed to use reasonable comparator, making his yardstick analysis legally unsound.
High Court Finds Chancery’s Weighting of Values Unexplained and Inexplicable
State Supreme Court declines to create presumption for appraisal actions that deal price is best indicator of value when merger was arm’s-length transaction, but court finds Chancery’s valuation approach lacked support in record and requires revaluation.
Tax Court Favors IRS’s Cost Markup Analysis to Compute Management Fee
In a suit over fees paid by taxpayers’ operating companies to taxpayer-controlled management company, Tax Court says IRS expert’s cost markup analysis produces most credible arm’s-length management fee; this fee represents the allowable deduction amount.
Wycoff v. Commissioner
In a suit over fees paid by taxpayers’ operating companies to taxpayer-controlled management company, Tax Court says IRS expert’s cost markup analysis produces most credible arm’s-length management fee; this fee represents the allowable deduction amount.
Chancery’s fusion valuation triggers remand and some words of wisdom by Del. Supreme Court
The Delaware Supreme Court recently overturned a 2016 ruling by the Delaware Court of Chancery that arrived at fair value by weighting the results of three valuation techniques equally. The high court's Chief Justice Strine, who once headed the Chancery, found this approach was problematic and used the decision to provide valuation advice to his successor, Chancellor Bouchard, who had overseen the appraisal proceeding.
Revenue mix is key to valuing HVAC companies
There is a big swing in prices for HVAC firms—from under 10% of revenue to over 100% of revenue—depending on the mix of business.
DFC Global Corp. v. Muirfield Value Partners, L.P. (II)
State Supreme Court declines to create presumption for appraisal actions that deal price is best indicator of value when merger was arm’s-length transaction, but court finds Chancery’s valuation approach lacked support in record and requires revaluation.
High Court Finds Chancery’s Weighting of Values Unexplained and Inexplicable
State Supreme Court declines to create presumption for appraisal actions that deal price is best indicator of value when merger was arm’s-length transaction, but court finds Chancery’s valuation approach lacked support in record and requires revaluation.
CUT Method Prevails in Amazon’s Transfer Pricing War With IRS
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says ...
Court Dismisses S Corp Tax Argument in Fair Value Buyout
In statutory fair value proceeding, court adopts income-based approach reconciling key differences in expert analyses regarding historical earnings period, tax rates, and normalization for intercompany transactions; court rejects market analysis.
Market Data Approach ‘Particularly Unsuitable’ to Valuing Feature Film
Court rejects expert’s movie valuation based on percentage of cost of making it; market data approach is “particularly unsuitable” because simply averaging price of films and cost to create them does not yield information about value of particular film.
Reasonable Compensation Analysis Ignores Objective Evidence, Tax Court Says
Tax Court dismisses taxpayer expert’s reasonable compensation analysis as not helpful to trier of fact; court points to failure to consider objective evidence and detects willingness to “validate and confirm” the amounts reported on taxpayer’s returns.
CUT Method Prevails in Amazon’s Transfer Pricing War With IRS
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says.
Amazon.com, Inc. v. Commissioner (I)
In transfer pricing case, Tax Court says Amazon more accurately determined buy-in and cost-sharing payments by using CUT method to value separately three types of intangible assets; IRS’s DCF analysis results in improper enterprise valuation, court says.
Chancery Bases Fair Value Calculation on Income-Based Model
Flawed sales process makes merger price an unreliable indicator of fair value for statutory appraisal, Chancery finds; in accord with party experts, court uses discounted net income approach and adopts most of respondent expert’s inputs for its valuation.
Matter of Digeser v. Flach
Income approach, capitalization rate, expert testimony, valuation methods, fair value, minority oppression, statutory appraisal, S corporation, C corporation, normalization, market-based approach, comparable transactions ...