Appraisal After Dell
The Corporate Contract in Changing Times: Is the Law Keeping Up? (U. Chicago Press) (2018 Forthcoming)
36 Pages Posted: 5 Jan 2018
Date Written: January 2, 2018
This Essay examines the state of appraisal in Delaware after the Delaware Supreme Court’s decisions in DFC Global (July 2017) and Dell (December 2017). In these two cases, the Supreme Court reversed Chancery Court rulings that “fair value” exceeded the deal price. In doing so the Supreme Court strongly signaled that deal price should receive presumptive weight as long as the deal process is good. The question then becomes how good the deal process must be in order to gain deference to the deal price. In Dell, the Chancery Court found that the deal process was good enough to satisfy fiduciary duties but not good enough to warrant deference to the deal price. The Supreme Court revisited (and in some instances, mischaracterized) key facts from the record to conclude that the Chancery Court’s ruling constituted an “abuse of discretion.” This Essay concludes with implications for practitioners and courts. An earlier version of this Essay is titled Using the Deal Price for Determining "Fair Value" in Appraisal Proceedings.
Keywords: mergers & acquisitions, appraisal, Delaware, corporate law
JEL Classification: G30, G34, K22
Suggested Citation: Suggested Citation