Huff Fund Investment Partnership v. CKx, Inc.
Huff Fund Investment Partnership (Huff Fund) brought an appraisal action in Delaware Chancery Court against CKx in connection with the June 2011 acquisition of CKx by an Apollo Group private equity fund. At the time, CKx owned a number of entertainment properties, including American Idol, So You Think You Can Dance, and Elvis Presley Enterprises. Following a thorough sales process, CKx agreed to an offer of $5.50 per share. In its suit, an expert for Huff Fund contended that CKx was actually worth more than $11 per share.
On behalf of CKx, Analysis Group Senior Advisor Jeffrey Cohen provided expert testimony related to the value of CKx as of the time of the merger. An Analysis Group team led by Managing Principal Michael Cliff supported Mr. Cohen and provided consulting and litigation support to CKx counsel Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Following a three-day trial, Vice Chancellor Sam Glasscock III ruled that the value of CKx was equal to the offer price of $5.50 per share. In reaching his decision, Vice Chancellor Glasscock noted that the deal price was the best indicator of value because the sales process was “thorough, effective, and free from any spectre of self-interest or disloyalty.”
Huff Fund subsequently appealed the decision to the Delaware Supreme Court, where a five-judge panel affirmed Vice Chancellor Glasscock's findings and their underlying rationale. The decision marked a notable shift in appraisal disputes toward an increased consideration of deal price and market price. The ruling was covered in a number of media outlets, including Reuters, National Law Review, and Law360.