Impact of 2018 Delaware Chancery Court | FTI Consulting

Impact of 2018 Delaware Chancery Court

Appraisal Decisions on Transaction Valuations

Forensic & Litigation Consulting

August 14, 2019

Gavel on Book

In this white paper, FTI Consulting’s valuation expert Brent Miller dives into the impact of the 2018 Delaware Court of Chancery appraisal decisions on transition valuations, particularly how they were impacted by the outcomes of two Delaware Supreme Court decisions in two 2017 cases: Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd. and DFC Global Corp. v. Muirfield Value Partners, L.P. Learn more about the impacts of these and other rulings as well as the trends that have since developed for valuation and appraisal, including some of the major takeaways:

  • The Delaware Supreme Court may have created de facto deference to the deal price
  • Increased risks could result in continued decreases in appraisal activity
  • Potential benefits from providing more support for valuation opinions

Another critical takeaway for valuation analysts is that their valuations will be more convincing if they are able to explain the specific circumstances that led to the market overestimating or underestimating the company’s value.

“A valuation analyst who can explain to the Court how those issues contributed to a deal price that is below fair value (not just below the price it otherwise may have been able to obtain) will likely be more credible to the Court.” – Brent Miller

Download the whitepaper to learn more.

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