Category

Appraisal

23 October 2020

Delaware Supreme Court Holds That Appraisal Actions Do Not Constitute “Securities Claims” Covered by D&O Policy

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The Delaware Supreme Court reversed a decision of the state’s Superior Court, holding that an appraisal action arising from Vista Equity Partners’ acquisition of Solera Holdings, Inc. (Solera) did not fall within the definition of a “Securities Claim” for the purposes of coverage under Solera’s primary and excess directors’ and officers’ insurance policies (D&O Policies). The decision cautions that such policies should be carefully reviewed on a periodic basis, and that would-be buyers should do the same during diligence.

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12 October 2020

Delaware Supreme Court Reaffirms Import of Deal Value in Resolving Appraisal Petitions

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The Delaware Supreme Court recently reaffirmed that, absent significant market or process concerns, deal price should be a significant (if not outcome-determinative) factor in the appraisal of Delaware corporations.

In 2017, Sibayne Gold, Ltd. (Sibayne) acquired Stillwater Mining Co. (Stillwater) in a reverse triangular merger that entitled the holder of each Stillwater share to $18 of merger consideration at closing. Petitioners, former Stillwater stockholders, perfected their appraisal rights — a judicial determination of the “fair value” of their holdings — and argued that a flawed deal process made the $18 per share deal price unreliable. This included an increase in commodity prices between signing and closing that increased Stillwater’s value by nine percent.

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