Flaws in North Carolina Court’s Appraisal of Reynolds American
The wrong valuation date, a faulty reliance on other cases and the disregard of projections highlight the court’s opinion in a shareholder dissent case involving two tobacco giants.
North Carolina court looks to deal price for fair value in tobacco merger
The importance of Delaware appraisal jurisprudence beyond state borders was on display in a recent fair value decision out of North Carolina related to a merger involving the tobacco giant Reynolds.
Reynolds American Inc. v. Third Motion Equities Master Fund Ltd.
In appraisal action involving merger of public (tobacco) company, court, guided by key Delaware court decisions, says deal price best reflects fair value and represents upper limit; contemporaneous valuations based on comparable companies, precedent transactions, and DCF support use of deal price.
North Carolina Court Says Deal Price Represents Upper Limit of Tobacco Company’s Fair Value
In appraisal action involving merger of public (tobacco) company, court, guided by key Delaware court decisions, says deal price best reflects fair value and represents upper limit; contemporaneous valuations based on comparable companies, precedent transactions, and DCF support use of deal price.
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Synergy deduction purely academic in new Delaware appraisal ruling
In a statutory appraisal case that involved the sale of a publicly traded company to a privately held entity, the Delaware Court of Chancery recently decided the deal price was a reliable indicator of fair value and a downward adjustment for synergies was justified.
In re Panera Bread Company
In appraisal action involving sale of public company, court says sale process had “objective indicia of reliability,” justifying use of deal price for fair value determination; synergy deduction is appropriate to account for value from anticipated cost and tax-related savings due to merger.
Court Considers Deal Price Persuasive Indicator of Fair Value and Approves Synergy Deduction
In appraisal action involving sale of public company, court says sale process had “objective indicia of reliability,” justifying use of deal price for fair value determination; synergy deduction is appropriate to account for value from anticipated cost and tax-related savings due to merger.
Bankruptcy Court highlights comparables selection in assessing experts’ valuations
A meaningful comparable company analysis requires careful selection of comparable companies, the Bankruptcy Court recently emphasized in a case in which it ruled on the debtor’s proposed reorganization plan.
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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.
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.
Chancery relies on income approach to determine fair value in problematic bank merger
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.
Persuasive’ Defense Expert Testimony Defeats ESOP Overpayment Claims
Court says defense expert opinion provides “credible and persuasive” support for court’s conclusion that ESOP financial advisor produced sound fairness and valuation opinions prior to contested transaction; there was no overpayment for stock at issue.
Defense expert testimony supports ESOP valuation and fairness opinions
A recent ESOP decision involving allegations of breach of fiduciary duty and engaging in a prohibited transaction turned on whether the ESOP trustee’s financial advisor had performed proper due diligence and issued defensible fairness and valuation analyses.
Chancery Achieves Fair Value by Blending Three ‘Imperfect Techniques’
Court says uncertainty about company’s future performance and viability limits reliability of values derived from DCF and multiples-based comparable company analyses as well as deal price; court blends three “imperfect techniques” to determine fair value.
Persuasive’ Defense Expert Testimony Defeats ESOP Overpayment Claims
Court says defense expert opinion provides “credible and persuasive” support for court’s conclusion that ESOP financial advisor produced sound fairness and valuation opinions prior to contested transaction; there was no overpayment for stock at issue.
Fish v. GreatBanc Trust Co.
Court says defense expert opinion provides “credible and persuasive” support for court’s conclusion that ESOP financial advisor produced sound fairness and valuation opinions prior to contested transaction; there was no overpayment for stock at issue.
Chancery achieves fair value with three imperfect valuation techniques
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 re DFC Global Corp.
Court says uncertainty about company’s future performance and viability limits reliability of values derived from DCF and multiples-based comparable company analyses as well as deal price; court blends three “imperfect techniques” to determine fair value.
Chancery Achieves Fair Value by Blending Three ‘Imperfect Techniques’
Court says uncertainty about company’s future performance and viability limits reliability of values derived from DCF and multiples-based comparable company analyses as well as deal price; court blends three “imperfect techniques” to determine fair value.
More Valuation Data Do Not Ensure Fair Class Action Settlement
In stockholder class action, Chancery declines to approve settlement that requires plaintiffs to agree to broad release of claims in exchange for additional valuation-related information, finding it fails to meet applicable “fair and reasonable” standard.
In re Trulia Stockholder Litig.
In stockholder class action, Chancery declines to approve settlement that requires plaintiffs to agree to broad release of claims in exchange for additional valuation-related information, finding it fails to meet applicable “fair and reasonable” standard.