Flop film poses unique valuation challenge
A recent bankruptcy-related case in front of the California Court of Appeal raises important questions about how one quantifies the value of a dated piece of art, a film, for which there never was a market in the first place.
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.
New Jersey Court Finds Defendant’s Actions Justify DLOM in Forced Buyout
In New Jersey fair value determination, following precedent, court finds defendant’s conduct justifies use of a marketability discount because he was oppressing shareholder who created “extraordinary circumstances” necessitating forced buyout; court rejec ...
Parker v. Parker
In New Jersey fair value determination, following precedent, court finds defendant’s conduct justifies use of a marketability discount because he was oppressing shareholder who created “extraordinary circumstances” necessitating forced buyout; court rejec ...
Holder v. Howe
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.
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.
Chancery says bids in squeeze-out merger are not comparable
The Delaware Court of Chancery recently cut short a challenge to a going-private merger when it dismissed the plaintiffs' complaint. The plaintiffs unsuccessfully argued the defendants breached their fiduciary duties when they favored the controller's lower bid over a third-party bidder's higher offer.
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.
In re OM Group, Inc. Stockholders Litig.
Per business judgment rule, court dismisses shareholder complaint that board members breached fiduciary duties by rushing to sell entire company where financial advisor had stated separate sales of company’s various business units would maximize value.
Shareholder Approval ‘Cleanses’ Potential Undervaluation
Per business judgment rule, court dismisses shareholder complaint that board members breached fiduciary duties by rushing to sell entire company where financial advisor had stated separate sales of company’s various business units would maximize value.
In re Books a Million Stockholders Litig.
Court says special committee’s accepting controlling shareholder’s lower bid over third-party’s higher offer is not sign of bad-faith dealing but of reality that “buyers of corporate control will be required to pay a premium” to acquire the whole company.
Chancery Recognizes Reality of Control Premium in Third-Party Offers
Court says special committee’s accepting controlling shareholder’s lower bid over third-party’s higher offer is not sign of bad-faith dealing but of reality that “buyers of corporate control will be required to pay a premium” to acquire the whole company.
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 Rejects Deal Price Based on Unquantifiable ‘Sales Process Mispricing’
For statutory appraisal, Chancery says sales process related to management buyout “functioned imperfectly as a price discovery tool” and gives no weight to final merger price; court relies exclusively on DCF analysis to derive fair value of the company.
Delaware Supreme Court Judge Boos Chancery's Option Valuation Case Analysis
In reviewing one of the Delaware Court of Chancery's most noteworthy rulings from 2015, one judge on the state Supreme Court wrote a stinging critique of the trial court's analysis.
In Unusual ESOP Case, 5th Circuit Validates FMV Computation
5th Circuit upholds district court’s liability and remedy findings in ESOP case; lower court’s weighting and averaging of valuation results offered by parties’ experts to compute amount of overpayment “was founded in established valuation methodology.”
5th Circuit backs district court's fair market value determination in ESOP dispute
The district court's determination of overpayment was a function of the contract price and the stock’s fair market value on each of three transaction dates. For its FMV determination, the court considered the testimony of three noted valuation experts retained by the plaintiffs, the DOL, and the defendants respectively. Different experts used different methods, different assumptions, different estimates, and they reached different conclusions. But they all used multiple approaches to produce several FMV estimates on the transaction dates. To arrive at a final value determination, or range of values, they all averaged or weighted the results.
In re Appraisal of Dell Inc.
For statutory appraisal, Chancery says sales process related to management buyout “functioned imperfectly as a price discovery tool” and gives no weight to final merger price; court relies exclusively on DCF analysis to derive fair value of the company.
Perez v. Bruister (II)
5th Circuit upholds district court’s liability and remedy findings in ESOP case; lower court’s weighting and averaging of valuation results offered by parties’ experts to compute amount of overpayment “was founded in established valuation methodology.”
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.
Additional Valuation Information Worthless? Delaware Chancery Thinks So
Asked to probe the value of the disclosures and by extension the fairness of the settlement to the absent class members, the Chancellor used the occasion to detail the problems related to disclosure settlements. He noted the Chancery’s historical practice of approving such settlements, even though they frequently were of marginal value to the plaintiffs. He considered this past attitude of the court one of the causes for the explosion of deal litigation “beyond the realm of reason."
High Court Finds Trial Court’s Damages Assessment Unsound
State high court strikes down trial court’s damages assessment because it included values from a business valuation when the applicable law required an analysis of the entire loss suffered by a corporation owing to a partner’s breach of fiduciary duty.
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.
Mississippi high court sets record straight on assessing economic damages
A Mississippi trial court’s cavalier approach to determining economic damages in a dispute involving allegations of breach of fiduciary duty and usurpation of a business opportunity triggered a petition with the state Supreme Court to clarify the applicable measure of damages. The trial court used the wrong standard and accounting procedures for calculating the loss to the plaintiff, the Supreme Court decided.