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Aruba Appraisal: Delaware Supreme Court Rejects Chancery Court’s Exclusive Reliance on Trading Price in Determining “Fair Value” Under DGCL § 262

Posted by on Wednesday, October 21, 2020 in Delaware Corporate Law Bulletins, En Banc, Volume 73.

Robert S. Reder & Martin Shepherd | 73 Vand. L. Rev. En Banc 239 (2020) |

“Consistent with DFC and Dell, Aruba II reaffirmed the important, if not dispositive, role that deal price usually plays in determining ‘fair value’ for purposes of DGCL § 262. One cannot ignore the fact that the Chancery Court retains broad discretion under DGCL § 262 to consider ‘all relevant factors,’ and the Supreme Court will not lightly find that the Chancery Court abused its discretion in determining ‘fair value.’ Nonetheless, as Aruba II demonstrates, the Chancery Court must provide a clear and compelling justification before it can fully or even partially discount deal price or other market-based data abundantly supported by the record in favor of its own analysis.”

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Robert S. Reder and Martin Shepherd