Valuation Gap in Delaware Appraisal Cases Analyzed by Vice President Michael Cliff

October 18, 2019

In a Law360 article, Vice President Michael Cliff analyzes appraisal cases in the Delaware Chancery Court to investigate the reasons behind widely varying valuations submitted in these cases. Dr. Cliff’s article responds to a Law360 article by Michael Maimone and Joseph Schoell, which notes this disparity and calls for experts in Delaware appraisals to submit “valuations closer to the deal price.”

To assess this situation, Dr. Cliff drew on Analysis Group’s database of Chancery Court cases between 2006 and 2018. Analyzing the relevant cases in his article, he finds that the valuations submitted by respondents’ valuations were significantly closer to the court’s determination of fair value than petitioners’. Dr. Cliff concludes that petitioners should be prepared to provide a compelling explanation if they argue that the court should not trust market evidence as a reliable indicator of fair value.

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