Appraisal rights action has broad implications
Abstract: This article discusses a court case that provides insight into how to value common stock in a going-private transaction. The primary discrepancy between the parties’ experts was whether to subtract a liquidation preference from the value of equity before allocating value to common shares. The court ruled not only on the dissenting shareholders’ arguments, but also on several other noteworthy valuation matters — in a way that demonstrated its disdain for what it considered subjective, speculative and academically inferior analyses of fair value. In Re: Appraisal of Orchard Enterprises, Inc., WL 2923305, July 18, 2012 (Delaware Court of Chancery).