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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.

Matter of Digeser v. Flach

Income approach, capitalization rate, expert testimony, valuation methods, fair value, minority oppression, statutory appraisal, S corporation, C corporation, normalization, market-based approach, comparable transactions ...

Court Dismisses S Corp Tax Argument in Fair Value Buyout

In statutory fair value proceeding, court adopts income-based approach reconciling key differences in expert analyses regarding historical earnings period, tax rates, and normalization for intercompany transactions; court rejects market analysis.

Chancery relies on income approach to determine fair value in problematic bank merger

In a statutory appraisal action, the Delaware Court of Chancery recently found the deal price did not reflect fair value because the sales process was suboptimal. Certain other methods the parties' experts used also were inadequate to the task, the court said.

Judicial Appraisal Lacks Valuation Evidence and Gets Dinged on Appeal

Appeals court scraps judicial appraisal, finding it was not based on competent evidence; in valuing dissenting shareholder’s interest in auto dealership, trial court ignored expert opinions but failed to detail methodology supporting its valuation.

Lally Orange Buick Pontiac GMC, Inc. v. Sandhu

Appeals court scraps judicial appraisal, finding it was not based on competent evidence; in valuing dissenting shareholder’s interest in auto dealership, trial court ignored expert opinions but failed to detail methodology supporting its valuation.

Chancery Relies on ‘Simple and Powerful’ DCF for Fair Value

Chancery finds gap separating fair value determinations of three valuation experts in a merger involving a privately held company “alarmingly” wide; court says only the DCF, “a simple and powerful concept,” achieves a reliable indicator of fair value.

Chancery Achieves Fair Value by Blending Three ‘Imperfect Techniques’

Court says uncertainty about company’s future performance and viability limits reliability of values derived from DCF and multiples-based comparable company analyses as well as deal price; court blends three “imperfect techniques” to determine fair value.

High Court Dissent Rebukes Chancery’s Analysis in Option Valuation Case

In medical company valuation case, high court affirms award to option holders based on deference owed to trial court’s findings of historical fact; dissent says Chancery’s dismissal ...

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.

In re ISN Software Corp. Appraisal Litig.

Chancery finds gap separating fair value determinations of three valuation experts in a merger involving a privately held company “alarmingly” wide; court says only the DCF, “a simple and powerful concept,” achieves a reliable indicator of fair value.

Chancery Relies on ‘Simple and Powerful’ DCF for Fair Value

Chancery finds gap separating fair value determinations of three valuation experts in a merger involving a privately held company “alarmingly” wide; court says only the DCF, “a simple and powerful concept,” achieves a reliable indicator of fair value.

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 re DFC Global Corp.

Court says uncertainty about company’s future performance and viability limits reliability of values derived from DCF and multiples-based comparable company analyses as well as deal price; court blends three “imperfect techniques” to determine fair value.

Chancery Achieves Fair Value by Blending Three ‘Imperfect Techniques’

Court says uncertainty about company’s future performance and viability limits reliability of values derived from DCF and multiples-based comparable company analyses as well as deal price; court blends three “imperfect techniques” to determine fair value.

Why Del. Chancery rejects merger price in 'Dell' statutory appraisal action

It decided to give no weight to the final merger price—$13.75 per share, and a special $0.13 dividend issued to all shareholders—but rely exclusively on its own post-transaction DCF analysis to determine the fair value of the company. In so doing, the court deviated from a number of Chancery decisions—several issued in 2015—that found the deal price was the most reliable indicator of the company’s fair value.

Cdx Holdings, Inc. v. Fox (Fox II)

In medical company valuation case, high court affirms award to option holders based on deference owed to trial court’s findings of historical fact; dissent says Chancery’s dismissal of board members’ valuation testimony evinces Chancery’s hindsight bias.

High Court Dissent Rebukes Chancery’s Analysis in Option Valuation Case

In medical company valuation case, high court affirms award to option holders based on deference owed to trial court’s findings of historical fact; dissent says Chancery’s dismissal ...

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.

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.

Chancery Lauds Advisor’s ‘Heroic’ Efforts at Credible DCF

In joint fairness/statutory appraisal action, Chancery finds defendants’ fraud defeated financial advisor’s ability to produce reliable DCF, notwithstanding advisor’s “heroic” efforts to create “the most credible and reliable projections in the case.”

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 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.

Discovery Evidence Casts Doubt on Valuator’s Independence

Appeals court affirms fair value determination in statutory appraisal, finding trial court properly assessed expert testimony against background of seller’s financial condition and circumstances surrounding sale; purchase price was relevant consideration.

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