DFC Global Corp. v. Muirfield Value Partners, L.P. (II)
State Supreme Court declines to create presumption for appraisal actions that deal price is best indicator of value when merger was arm’s-length transaction, but court finds Chancery’s valuation approach lacked support in record and requires revaluation.
High Court Finds Chancery’s Weighting of Values Unexplained and Inexplicable
State Supreme Court declines to create presumption for appraisal actions that deal price is best indicator of value when merger was arm’s-length transaction, but court finds Chancery’s valuation approach lacked support in record and requires revaluation.
ACP Master, Ltd. v. Sprint Corp.
In joint fiduciary-appraisal action centering on Sprint’s acquisition of minority interest in related entity, Chancery says merger was entirely fair and adopts respondent expert’s DCF analysis; huge value gap is 90% due to experts’ choice of projections.
DCF Projections Failed to Reflect Target’s Operative Reality, Chancery Says
In joint fiduciary-appraisal action centering on Sprint’s acquisition of minority interest in related entity, Chancery says merger was entirely fair and adopts respondent expert’s DCF analysis; huge value gap is 90% due to experts’ choice of projections.
Tax Court Introduces Formula to Value Donated Remainder Interest
Tax Court rules for IRS in disallowing deduction for charitable contribution involving remainder interest in leased property; requisite appraisal summary omits vital information, and court’s valuation formula shows donor made gross valuation misstatement.
RERI Holdings I, LLC v. Commissioner (RERI I)
Tax Court rules for IRS in disallowing deduction for charitable contribution involving remainder interest in leased property; requisite appraisal summary omits vital information, and court’s valuation formula shows donor made gross valuation misstatement.
Trustee Liable for Inadequate ESOP Valuation Vetting
Court finds ESOP trustee liable for allowing overpayment for company shares; trustee rushed transaction and failed to scrutinize financial advisor’s valuation ignoring red flags related to projections, use of control premium, beta, rounding up of values.
ESOP Trustee Evaded Fiduciary Duties by Delegating Valuation
Court finds ESOP trustee liable for causing plan to overpay; trustee “delegated” valuation to ESOP valuator without inquiring into valuation components, including projections, and without exploring “glaring” gaps (industry analysis) in valuation report.
Misunderstanding of Facts Results in Overvaluation of Fuel Supply Rights
Debtor’s fuel supply rights had value either in form of an implied contract, customer relationship, or simply an income stream, court says; court does not assign specific value but finds appraiser overstated its value due to misunderstanding of key facts.
Court rejects experts' fair value determinations in Minnesota buyout case
The plaintiff is the “prevailing party,” a Minnesota district court recently decided, allowing the minority owner of a well-known family business to sell her share for over $40 million. The valuation trial featured high-caliber experts who disagreed about every input and assumption underlying their discounted cash flow analyses.
Brundle v. Wilmington Trust N.A. (II)
Notwithstanding errors related to the court’s liability and damages determinations, the court rejects trustee’s motion for reconsideration as an inappropriate effort to introduce new legal theories and a late attempt to present a competing damages methodo ...
Court Defends Earlier ESOP Liability and Damages Rulings
Notwithstanding errors related to the court’s liability and damages determinations, the court rejects trustee’s motion for reconsideration as an inappropriate effort to introduce new legal theories and a late attempt to present a competing damages methodo ...
Majority Says EBITDA Valuations Buttress Damages Award
In business tort case involving unprofitable entity trying to market a trade secret, court upholds damages award; experts’ EBITDA valuations were based on commonly used method and numerous data sources, and experts linked data to conclusions, court says.
Pike v. Tex. EMC Mgmt., LLC
In business tort case involving unprofitable entity trying to market a trade secret, court upholds damages award; experts’ EBITDA valuations were based on commonly used method and numerous data sources, and experts linked data to conclusions, court says.
In Big Buyout Ruling, Minnesota Court Rejects DLOM in Calculating Fair Value
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.
Lund v. Lund (I)
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.
In re Appraisal of SWS Group, Inc.
In statutory appraisal, Chancery relies solely on DCF analysis, noting the instant case involving a bank holding company raises a unique situation in terms of management projections and whether and how to account for creation of excess regulatory capital.
Chancery’s DCF Upends Appraisal Arbitrage Strategy
In statutory appraisal, Chancery relies solely on DCF analysis, noting the instant case involving a bank holding company raises a unique situation in terms of management projections and whether and how to account for creation of excess regulatory capital.
Proxy Disclosed Sufficient Valuation Data to Allow Informed Vote on Merger
Chancery says proxy gave disinterested shareholders sufficient information about valuation analysis underlying financial advisor’s fairness opinion to enable informed vote, and it dismisses breach-of-fiduciary-duty claims under business judgment rule.
In re PetSmart, Inc.
In statutory appraisal, Chancery decides to “defer” to deal price, citing a robust sales process and well-functioning market; petitioners’ DCF analysis was not a useful valuation tool where it was based on, “at best, fanciful” management projections.
‘Fanciful’ Projections Make DCF an Unreliable Tool in Appraisal Proceeding
In statutory appraisal, Chancery decides to “defer” to deal price, citing a robust sales process and well-functioning market; petitioners’ DCF analysis was not a useful valuation tool where it was based on, “at best, fanciful” management projections.
Another ESOP trustee in trouble over valuation
For the second time in March 2017, a court found an ESOP trustee liable for causing the plan to overpay. The most recent decision chronicles in exhaustive detail how the trustee failed the plan in terms of ensuring that no more than fair market value would be paid for the seller’s shares.
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 ...
Chancery Says Solid Sales Process Lends Credibility to Deal Price
In appraisal action, Chancery says final merger consideration best represents fair value, noting sales process led to “meaningful price discovery”; court says with DCF too much depends on assumptions; small changes may have outsize impact on value range.
ESOP trustee’s failure to vet valuation causes significant overpayment
Inadequate trustee performance was at the center of a recent case, featuring a nontraditional ESOP structure. The court found that, if the trustee had engaged with the underlying valuation, it would have discovered numerous weaknesses and prevented the ESOP from overpaying for the company stock.