Attorneys Examine Court’s Rejection of Transaction Price as Best Measure of Fair Value

Business & securities litigation counsel Martin Crisp (New York) and private equity partner Jason Freedman (San Francisco) co-authored an article that examines the Delaware Court of Chancery’s recent post-trial opinion that rejects the transaction price as the best measure of fair value in In re Appraisal of Dell Inc. The authors state that the Dell opinion reminds merger parties that although deal price may be the best indicator of fair value in most instances, it is not determinative. The Delaware Court of Chancery will scrutinize the transaction process to evaluate whether it is a reliable measuring stick for assessing fair value. Even if that process would pass muster under a traditional fiduciary duty analysis, it may not be deemed the best measure of value.

The article was published in the International Law Office Corporate Finance/M&A Newsletter on Sept. 28.