If you own shares of a Delaware company that has been merged or
consolidated, and believe that you have not been given fair value
for your shares, then you may want to consider petitioning the
Court of Chancery to appraise your shares.
How are shares appraised during a stock appraisal
proceeding?
The discounted cash flow valuation methodology is the primary
valuation method employed by the Delaware Court of Chancery in
appraisal proceedings. Under this methodology, the equity value of
the target company is projected from the target's future cash
flows and discounting them to their present value. This can require
a complex analysis, and can involve a "battle of the
experts."
Recent decisions of Towerview LLC v. Cox Radio, C.A. 4809-VCP
(Del. Ch. June 28, 2013) and in Merion Capital LP v. 3M Cogent, C.A.
6247-VCP (Del. Ch. July 8, 2013) have demonstrated that the
Court generally utilizes the discounted cash flow method when
appraising a company's shares.
