Rich Bodnar

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Latest Articles

JDSupra has published an article discussing recent valuation issues in five states: Louisiana, Georgia, West Virginia, Alaska, and Pennsylvania. While each decision covered is worth discussion in its own right, a comparative analysis of this kind lends itself to highlighting the similarities and differences between the states.  In particular, how (and if) each state applies various discounts, including discounts for lack of marketability and minority discounts varies.  Thus, as an example, the Louisiana case highlighted…
In late March, Michigan Law hosted Professor Hidefusa Iida to discuss appraisal rights in Japan.  Professor Iida previously published on appraisal rights in Japan, including in a 2014 article “Reappraising the Role of Appraisal Remedy.” The basics of Japanese appraisal, from Professor Iida’s article and this analysis, are similar to Delaware. Shareholders who dissent from certain major corporate actions, in particular, mergers, can – as in Delaware – demand ‘appraisal’ of their shares, meaning…
As we have noted repeatedly, appraisal is a shareholder-protective remedy.  While much of the academic and media commentary on appraisal focuses on Delaware and appraisal in the context of large public mergers, appraisal exists beyond Delaware, and in contexts far removed from headline making mergers. For example, in New York, appraisal rights are afforded to minority members of an LLC when they are involuntarily cashed out of their LLC – often referred to as a…
The Delaware Supreme Court held oral argument this morning on the Aruba appeal. The full argument can be watched here. The judges remained silent throughout the argument and did not put a single question to the lawyers, offering no insight as to what the Court might be thinking. We are standing by for a ruling and will post it here when available.…
The Cornerstone Report finds that despite concerns over “the subjectivity of DCF models,” the methodology remains the primary tool for valuing targets in a Delaware appraisal. Petitioners continue to “overwhelmingly” rely on DCF analyses (94% of the cases) while occasionally also providing a comparables analysis (35% of the cases). Respondents continue to rely on DCF analyses “in the vast majority of the cases” but also have relied on merger price, in part or entirely, approximately…
We’ve posted before about Cayman Appraisal actions. The Cayman Islands remain an active jurisdiction for appraisal actions; and with appraisal actions comes valuation questions. Cayman firm Collas Crill has issued an explanatory note on valuation methods in the Cayman Islands, discussing the discounted cash flow (DCF) and market-based approaches taken by Cayman courts. As others have noted, Cayman courts often look to Delaware court decisions for persuasive authority when dealing with their own appraisal disputes,…
The Cornerstone Report provides several data points concerning the frequency of court awards above merger price in appraisal actions as well as the size of the premiums and distinctions between results involving public and private companies.  Between 2006 and 2018, Cornerstone reports 34 appraisal cases that went to trial; 16 resulted in awards above deal price and 18 resulted in awards at or below deal price.  Across all 34 cases, on average, the premium to…
According this report from Cornerstone Research, the number of mergers where appraisal was demanded has returned to levels seen in 2012-2015, demonstrating a further decline from the spike in appraisal in 2016.  We covered the start of the reversion in 2017 previously. To begin, a caution. This is a raw numerical comparison of the number of mergers where an appraisal petition was filed across years – it does not necessarily quantify the percentage of…