Courts are often reluctant to meddle in valuation agreements

Description

Abstract: When disputes over valuations lead to litigation, courts usually don’t hesitate to weigh in — except when the parties have agreed to a third-party valuation. This article details a recent case decided by the Delaware Chancery Court. Affirming the absence of a breach of the implied covenant of good faith and fair dealing, the court declined to offer judicial relief to investors who took issue with specific aspects of an independent valuation. A sidebar describes three possible levels of judicial review for valuations.