Verition Partners Master Fund Ltd. v. Aruba Networks, Inc. (Aruba III)
Delaware Supreme Court overturns Court of Chancery’s fair value determination based on unaffected market price and awards petitioners deal price minus synergies as determined by company; trial court’s analysis rested on “inapt” agency-costs theory and raised due process and fairness concerns.
Delaware Supreme Court Reproves Chancery’s Use of Unaffected Market Price in Aruba
Delaware Supreme Court overturns Court of Chancery’s fair value determination based on unaffected market price and awards petitioners deal price minus synergies as determined by company; trial court’s analysis rested on “inapt” agency-costs theory and raised due process and fairness concerns.
Reminder: Comments due on inventory guidance
In November 2018, the AICPA’s Financial Reporting Executive Committee (FinREC) issued an early working draft of inventory valuation guidance, which is part of a broader forthcoming release of the AICPA’s “Business Combinations Accounting and Valuation Guide.”
Strong agenda for ASA Fair Value Conference in New York City April 30
Nationally recognized speakers and timely topics will be featured at the 2019 ASA Fair Value Conference in New York City April 30.
Global BV News: Valuations slanted for squeezeouts in Finland
A paper examines the choices of valuation methods and their association with redemption prices in disputes concerning private-company squeezeouts.
New CEO for the ASA
After an exhaustive search, the American Society of Appraisers has named Johnnie White, CAE, CMP, as its new CEO effective April 15.
The Legend of Weighted Average Return on Assets and Benchmarking Purchase Price Allocation Data
The author's research shows that only current assets, non-competes, and customer relationships have any predictability to WACC in limited industries. In general, when intangibles have significance, their coefficients are negative, which reduces WACC and implied risk. This finding supports the claim by Lev and Gu (2008) that intangibles are important assets, which reduce, not increase risk. The concept that intangible always should have a premium above WACC is unfounded, and the premise of ARM 34 that intangibles are ancillary assets is outdated. The author suggests and alternative method to use purchase price allocation data to support the selection of premiums above WACC.
Appeals court upholds Lund buyout ruling and fair value determination
A protracted Minnesota buyout dispute involving the heirs to a local grocery store empire, Lunds & Byerlys, may have reached the end following a recent ruling from the state appeals court. The reviewing court upheld the trial court’s decision to grant the minority shareholder’s request for a buyout as well as the court's fair value determination.
Calibration With OPM in Early-Stage Enterprises: A Fair Value Update
Based on new draft guidelines, a review of how a calibration model can be established based on the initial transaction price of an investment in an early-stage enterprise. Also discussed is how such a model could be used in subsequent measurement periods to estimate the fair value of the enterprise and of equity interests in a portfolio company.
Global BVU News and Trends March 2019
Business valuation news from a global perspective.
BVU News and Trends March 2019
A monthly roundup of key developments of interest to business valuation experts.
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.
TAF releases VFR on contingent consideration
The Appraisal Foundation (TAF) has issued a Valuation in Financial Reporting (VFR) advisory on valuing contingent consideration, also known as earnouts.
Court Says ‘Fair Value’ Under State Shareholder Oppression Law Precludes Discounts
In shareholder oppression suit, court clarifies meaning of “fair value” under applicable statutory framework; court cautions not to conflate “fair value” with “fair market value”; in drafting statute, state legislature explicitly and implicitly conveys its rejection of discounting, court says.
Kolwe v. Civil and Structural Engineers, Inc.
In shareholder oppression suit, court clarifies meaning of “fair value” under applicable statutory framework; court cautions not to conflate “fair value” with “fair market value”; in drafting statute, state legislature explicitly and implicitly conveys its rejection of discounting, court says.
Ongoing saga of New York’s out-of-step position on DLOM
We’ve followed the continuing tale of New York’s inconsistent position with respect to the discount for lack of marketability in fair value proceedings (for example, see this coverage).
Contentious Lund buyout and fair value rulings survive appeal
The Minnesota appeals court recently upheld the district court’s buyout order and fair value determination related to a well-known local grocery store chain, Lunds & Byerlys.
AICPA extends comment period for inventory valuation guidance
In November 2018, the AICPA’s Financial Reporting Executive Committee (FinREC) issued an early working draft of Inventory Valuation guidance, which is part of a broader forthcoming release of the AICPA’s “Business Combinations Accounting and Valuation Guide.”
Paper says Delaware blundered in Dell and DFC Global
A paper analyzes what it calls “critical mistakes” in two Delaware Supreme Court decisions concerning appraisal rights.
Update on the AICPA’s New CVFI Credential
Insights into the upcoming Certified in Valuation of Financial Instruments (CVFI) credential being launched by the AICPA.
Work File Checklist for Documenting the Fair Value of Inventory
A practice aid based on the Mandatory Performance Framework (MPF) for the Certified in Entity and Intangibles Valuation (CEIV) credential.
‘Oh, What a Tangled Web We Weave’: Recent Developments in Delaware on Investment Bank Liability for M&A Services
Anyone who provides fairness opinions or other advice on company acquisitions or restructuring can be exposed to liability.
BVU News and Trends February 2019
A monthly roundup of key developments of interest to business valuation experts.
PwC examines SEC comment letters
You can learn a lot from the large amount of back-and-forth communications between the SEC and companies over fair value measurement issues.