GT publishes insights into three Delaware Chancery Court opinions
Drew Voth (Grant Thornton) wrote in the recent Business Valuation Monitor: When…setting valuation law precedent (and reminding us of preexisting precedent), no venue is more important than the Delaware Chancery Court. The sheer volume of companies incorporated in Delaware makes the state a natural venue for the majority of corporate shareholder value actions, and the [...]
Recently added to BVLaw valuation case law database
Enpat, Inc. v. Budnic, 2011 WL 768092 (M.D. Fla.)(Feb. 28, 2011) Federal court denies plaintiff’s request to pro-rate past patent infringement damages from actual prior licenses without additional evidence that the parties’ would have used a similar pro-ration during hypothetical negotiations. Experts: none Judge: Fawsett State/Jurisdiction: federal Court: U.S. district court, Florida Type [...]
New SEC private company stock rules-–and new markets for minority shareholders–offer new opportunities
Last month the SEC sent a letter stating that the agency is “moving toward easing decades-old constraints on share issues by private companies, in a sweeping review that could remake the way American start-ups raise capital,” says Jean Eaglesham in the Wall Street Journal. Learn what possible changes could alter both the liquidity and marketability [...]
Kentucky adopts majority rule in statutory FV appraisals
Like many states across the country, Kentucky first enacted a dissenters’ rights statute in 1972 as part of its adoption of the Model Business Corporation Act (MBCA). The statute entitled dissenting shareholders to the “fair value” of their shares without specifically defining the term, and was silent regarding the application of minority and marketability discounts. [...]
Buy-Sell value stands after expert is discredited in shareholder buy-out case
In re White, 2010 WL 786292 (Bkrptcy. S.D. Tex.)(March 4, 2010) The federal bankruptcy court first found that $4.9 million in executive bonuses paid by a profitable construction equipment company over a span of two years (2006 and 2007) were in fact disguised dividends. “Uncontroverted” testimony at trial established that the company paid shareholder-employee bonuses [...]
Delaware shareholder dissent case disputes “circular logic” when valuing the business
The Delaware Chancery Court found the majority owners of a large, privately owned alcohol distributor authorized a merger to “freeze out” a 15% minority shareholder by using a process that was “anything but fair.” A fairness opinion, obtained a week prior to the merger, was an “afterthought,” the court noted, “pure window-dressing” to justify the [...]
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