June 13, 2017

Appraisal: DFC Global Oral Argument

The outcome of the DFC Global appraisal case that’s currently before the Delaware Supreme Court may have a significant impact on deal litigation for years to come – and it may be the most closely watched appraisal case of all time.

The Supreme Court heard oral arguments in the case on June 7th, and Steve Hecht recently blogged about some of the questions raised by the Court during the course of that argument.  Here are some nuggets from the blog:

– The court asked DFC Global why they did not introduce an economics expert to corroborate the reliability of the merger price as the measure of the company’s fair value; the Chief Justice said that by not doing so, they didn’t offer much help to the Chancellor in his evaluation of the merger price and the process of wading through the respective valuation experts’ reports.

– The court asked the stockholders why their valuation expert didn’t open up his own private equity shop if he really believed in the valuation delta between merger price and his own valuation, which came out nearly two times higher than the merger price.

If you’re interested in watching the oral argument (about 50 minutes), it’s available here.

John Jenkins