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 ...
Ambiguous expert report prompts order to revalue minority interest
A recent Wisconsin case illustrates that a shareholder agreement in place is no guarantee for a smooth buyout of the minority shareholder. The case also includes a caution to experts to strive for clarity in their expert reports.
New Jersey court applies DLOM in forced buyout: Defendant’s conduct created ‘extraordinary circumstance’
In adjudicating a New Jersey family dispute that escalated into an oppressed shareholder action, the trial court recently found the oppressing shareholder had created a situation that mandated the application of a discount for marketability (DLOM) in order to achieve a “fair and equitable” outcome.
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 ...
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.
Challenge to new Section 2704 regulations is shaping up
The accounting, valuation, and legal professions are hard at work to defeat the Treasury Department's proposed Section 274 regulations. The new regs would curtail, if not entirely eliminate, valuation discounts in family-controlled entities.
Parties’ Valuation Contract Precludes Review of Minority Discount
In share buyback case where parties agree to retain joint appraiser, whom they know from past appraisals of company, and commit to be bound by appraiser’s valuation, court declines to consider seller’s challenge to appraiser’s use of minority discount.
Expert’s Poor Grasp of Valuation Issues Undercuts Shareholder Suit
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.
Curran v. Curran
In share buyback case where parties agree to retain joint appraiser, whom they know from past appraisals of company, and commit to be bound by appraiser’s valuation, court declines to consider seller’s challenge to appraiser’s use of minority discount.
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.
Zelouf Court Reasserts Its Objection to DLOM
New York court rejects majority owners’ post-trial objection to prior ruling against DLOM based on unlikelihood of sale of the business; court is guided by fairness, noting “a DLOM here would be the economic equivalent of imposing a minority discount.”
Expert’s Solid DCF and Industry Research Sway Court
Court discredits respondent expert’s capitalization of earnings calculation and market-based analysis, noting “severe deficiencies” and instead adopts petitioner expert’s valuation but applies DLOM to entire equity value, not just goodwill.
Multimillion-Dollar Personal Goodwill Allocation Leaves Court Stunned
Court says defendants were unjustly enriched when they allocated 40% of the price a competitor paid for assets of and to settle lawsuit with their company to personal goodwill where they also received compensation for consulting services and noncompetes.
Zelouf International Corp. v. Zelouf (II)
New York court rejects majority owners’ post-trial objection to prior ruling against DLOM based on unlikelihood of sale of the business; court is guided by fairness, noting “a DLOM here would be the economic equivalent of imposing a minority discount.”
Wright v. Irish (Hudson Valley Clean Energy, Inc.)
Court discredits respondent expert’s capitalization of earnings calculation and market-based analysis, noting “severe deficiencies” and instead adopts petitioner expert’s valuation but applies DLOM to entire equity value, not just goodwill.
Potok v. Rebh
Court says defendants were unjustly enriched when they allocated 40% of the price a competitor paid for assets of and to settle lawsuit with their company to personal goodwill where they also received compensation for consulting services and noncompetes.
May Court Disregard Shareholder Agreement in Judicial Buyout?
Appeals court finds in judicial buyout, district court properly updated stock price listed in shareholder agreement and could disregard experts’ market approach values, but it erred when it abandoned the contract’s terms as to the manner of the payment.
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.
Piche v. Braaten
Appeals court finds in judicial buyout, district court properly updated stock price listed in shareholder agreement and could disregard experts’ market approach values, but it erred when it abandoned the contract’s terms as to the manner of the payment.
Hanusin v. Hanusin
In a divorce case involving a closely held corporation, the appeals court finds trial court was justified to credit a 2004 stock purchase agreement instead of a 2012 settlement when valuing husband’s shares; the buyout was a true arms-length transaction ...
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.