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Bocek v. JGA Assocs., LLC

Court rejects expert’s loss of business opportunity and lost earnings calculations, finding capitalization of earnings method is inappropriate for valuing company with unstable earnings and lost salary projections are based on “incomplete use” of data.

Value Determination Accords With Parties’ Contract, Chancery Says

Court says valuation firm’s determination of value of defendants’ put units accords with agreement to which plaintiff and defendants committed themselves; since contract does not provide for judicial review, court won’t “second-guess” valuator’s judgment.

Uncertainty Over Key Inputs Compromises DCF, Chancery Says

Chancery favors merger price, without synergy adjustment, over DCF-generated value, noting uncertainties over key inputs such as projections, equity risk premium, terminal growth rate as well as the “wildly divergent” DCF results of the parties’ experts.

PECO Logistics, LLC v. Walnut Inv. Partners, L.P.

Court says valuation firm’s determination of value of defendants’ put units accords with agreement to which plaintiff and defendants committed themselves; since contract does not provide for judicial review, court won’t “second-guess” valuator’s judgment.

Rubin v. Bedford

Appeals court affirms soundness of going private merger; court says plaintiffs failed to point to better offer and their expert lacked formal accounting, economics, and valuation training and displayed a light grasp of issues related to company’s value.

Adjusted Merger Price Superior to Other Valuation Methods

In appraisal arbitrage case, Chancery finds merger price adjusted for synergies is best indicator of fair value of company; dissenter’s DCF value rests on unsound management projections and its comparable transactions analysis uses too few data points.

Merion Capital LP & Merion Capital II LP v. BMC Software

Chancery favors merger price, without synergy adjustment, over DCF-generated value, noting uncertainties over key inputs such as projections, equity risk premium, terminal growth rate as well as the “wildly divergent” DCF results of the parties’ experts.

Chancery Decries Accounting Firm’s Compromised Valuation

Chancery says major accounting firm’s merger-related appraisal represents “new low”; to achieve client’s goal of zero corporate tax liability, firm abandoned sound prior approaches and simply copied another accounting firm’s report and called it its own.

Chancery Adopts Merger Price Sans Cost Savings Reduction

Chancery agrees with company expert’s reliance on merger price as best estimate of fair value of company where DCF and comparable companies analyses lack reliable data, but court rejects downward adjustment for purported cost savings related to merger.

Fox v. CDx Holdings

Chancery says major accounting firm’s merger-related appraisal represents “new low”; to achieve client’s goal of zero corporate tax liability, firm abandoned sound prior approaches and simply copied another accounting firm’s report and called it its own.

LongPath Capital, LLC v. Ramtron International Corp.

In appraisal arbitrage case, Chancery finds merger price adjusted for synergies is best indicator of fair value of company; dissenter’s DCF value rests on unsound management projections and its comparable transactions analysis uses too few data points.

Merlin Partners LP v. AutoInfo, Inc.

Chancery agrees with company expert’s reliance on merger price as best estimate of fair value of company where DCF and comparable companies analyses lack reliable data, but court rejects downward adjustment for purported cost savings related to merger.

High Company-Specific Risk Adjustment Distorts Valuation

In a buyout case, the court finds that, in reselling company, defendants undervalued rollover equity interest by double counting risks specific to the company in order to avoid triggering windfall provision in prior sales agreement favorable to plaintiff.

Charron v. Sallyport Global Holdings, Inc.

In a buyout case, the court finds that, in reselling company, defendants undervalued rollover equity interest by double counting risks specific to the company in order to avoid triggering windfall provision in prior sales agreement favorable to plaintiff.

Industry Characteristics Bolster Reliance on Net Asset Value

In fight over plan confirmation, court finds nature of industry supports debtors’ reliance on net asset value approach to value Chapter 11 dry bulk shipper but not to the exclusion of more traditional methods; however, court rejects use of DCF.

In re Genco Shipping & Trading Ltd.

In fight over plan confirmation, court finds nature of industry supports debtors’ reliance on net asset value approach to value Chapter 11 dry bulk shipper but not to the exclusion of more traditional methods; however, court rejects use of DCF.

Valuations Underpin DE Chancery’s Ruling in Going-Private Merger

DE Supreme Court affirms use of business judgment review where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor confirmed merger was favorable to minority stockholders.

Valuations Underpin DE Chancery’s Ruling in Going-Private Merger

DE Chancery adopts business judgment review standard where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor demonstrate merger was favorable to minority stockholders.

Kahn v. M&F Worldwide Corp.

DE Supreme Court affirms use of business judgment review where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor confirmed merger was favorable to minority stockholders.

Chancery Trusts DCF to Home In on Common Stock Value

Court of Chancery finds the defendant directors proved “entire fairness” despite a management incentive plan and large liquidation preference that rendered the sales process unfair to common stockholders and left them with no proceeds; defendant expert’s ...

In re Trados Inc.

Court of Chancery finds the defendant directors proved “entire fairness” despite a management incentive plan and large liquidation preference that rendered the sales process unfair to common stockholders and left them with no proceeds; defendant expert’s ...

In re MFW Shareholders Litig.

DE Chancery adopts business judgment review standard where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor demonstrate merger was favorable to minority stockholders.

Yet Again, Delaware Looks to DCF in Appraisal Action

PNC Financial Services Group Inc. (PNC), the parent of PFPC Holding Corp. (Holding), had planned to take Holding’s subsidiary, PFPC Worldwide Inc. (PFPC), public via an initial public offering (IPO), but the opportunity did not arise.

Court Rejects DCF Approach Where Inputs Are 'Untethered to Reality'

In this appraisal action, the only valuation issue was the value of only one of the merged company’s assets.

Andaloro v. PFPC Worldwide, Inc.

PNC Financial Services Group, Inc. (PNC), the parent of PFPC Holding Corp. (Holding), had planned to take Holding's subsidiary, PFPC Worldwide, Inc. (PFPC), public via an initial public offering (IPO), but the opportunity did not arise.

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