2017 Year in Review: The State of Appraisal in the Delaware Courts
Introduction
The first Tulane Corporate Law Institute was held in December 1988. Any discussion of appraisals then would surely have included the difficulty and frustrations encountered by law-trained judges in determining “fair value.” In that respect, not much has changed in thirty years. In the recent Ancestry appraisal case, for example, Vice Chancellor Glasscock voiced his frustration and noted that the real “burden” of proof in appraisal cases fell upon the judge.
But what has changed in thirty years is the emergence of the Delaware Courts’ emphatic reliance on deal price, at least in conflict-free, public company deals. Appraisal cases from the mid-to-late 1990s suggest no presumption in favor of deal price, relying instead on an “objective” evaluation of each side’s valuation inputs and methodologies. The Supreme Court’s recent decisions in Dell and DFC Global now leave no doubt that deal and market price matter. That is surely a welcome development for some, even if 30 years in the making. It is for that reason, in this year of appraisal, we have devoted this publication to the significant developments in the law of appraisal. We hope you will find the articles and summaries useful and informative.
Potter Anderson & Corroon LLP