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 [...]
Did Shannon Pratt implant the implied minority discount “weed” at the Delaware Chancery Court?
The IMD first appeared in Delaware Chancery cases in 1992 and 1995, but didn’t become entrenched until LeBeau v. M.G. Bancorporation (1998 Del. Ch. LEXIS 9), when the majority shareholders hired Shannon Pratt. In arguing for the application of the IMD, the dissenters pointed to an excerpt from Pratt’s Valuing a Business (3rd ed.1996), which [...]
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