Kruse v. Synapse Wireless, Inc., 2020 Del. Ch. LEXIS 238 (Del. Ch. July 14, 2020)

John Jenkins writes:

In many respects, the case presented a worst case scenario – it involved a minority squeeze-out of a private company at a price of approximately $0.43 per share with no market check or competitive sales process. Both parties pointed to valuation analyses prepared by their competing experts, which resulted in wildly divergent valuations. The petitioner’s expert opined that each Synapse share was worth $4.1876 at the time of transaction, while Synapse’s expert provided a valuation range of $0.06 to $0.11 per share. Vice Chancellor Slights acknowledged that this left him in a bind:

… As a result, with the exception of relatively minor adjustments to Synapse’s expert’s conclusions about the amount of its debt and available cash, the Vice Chancellor adopted that expert’s approach to the DCF analysis and concluded that the fair market value of the company’s shares was approximately $0.23 per share – nearly 50% below the purchase price.

via DealLawyers.com

Fir Tree Value Master Fund, LP v. Jarden Corp., 2020 WL 3885166, 2020 Del. LEXIS 237 (Del. July 9, 2020)

  • Fir Tree Value Master Fund, LP v. Jarden Corp., 2020 WL 3885166, 2020 Del. LEXIS 237 (Del. July 9, 2020)

On appeal, the petitioners argue the Court of Chancery erred as a matter of law when it adopted Jarden’s unaffected market price as fair value because it ignored what petitioners claim is a “long-recognized principle of Delaware law” that a corporation’s stock price does not equal its fair value. They also claim that the court abused its discretion by refusing to give greater weight to a discounted cash flow analysis populated with data selected by petitioners, ignoring market-based evidence of a higher value, and refusing to use the deal price as a “floor” for fair value.

We affirm the Court of Chancery’s judgment finding $48.31 as the fair value of each share of Jarden stock as of the date of the merger. There is no “long-recognized principle” that a corporation’s unaffected stock price cannot equate to fair value. Although it is not often that a corporation’s unaffected market price alone could support fair value, the court here did consider alternative measures of fair value—a comparable companies analysis, market-based evidence, and discounted cash flow models—but ultimately explained its reasons for not relying on that evidence. Finally, Jarden’s sale price does not act as a valuation floor when the petitioners successfully convinced the court that the deal price resulted from a flawed sale process, and the court found Jarden probably captured substantial synergies in the sale price.

When a market is informationally efficient in the sense that the market’s digestion and assessment of all publicly available information concerning a company is quickly impounded into the company’s stock price, the market price is likely to be more informative of fundamental value. And how informative of fundamental value an informationally efficient market is depends, at least in part, on the extent of material nonpublic information. It is a traditional Delaware view that in some cases the price a stock trades at in an efficient market is an important indicator of its economic value and should be given weight.

via Sheppard Mullin

1934年証券取引所法に関する実証分析

 今どきStigler先生、Benston先生、Manne先生だけに依拠して、情報開示の強制を否定するという議論を展開することはないと思いますが、これらの論文は、影響力の大きいというのは事実でしょう。私は、Joel Seligman, Historical Need for a Mandatory Corporate Disclosure System, 9 J. Corp. L. 1 (1983)で、これらの議論には十分反論がされていると考えているのですが、現代的な手法に基づいて実証研究を行い、当時の影響について結論を得ることができればと願っていました。この点に関する最近の論文が、最近、SSRNにポストされました。

We examine whether the Securities Exchange Act of 1934 increased the information provided in accounting disclosures. Prior research examining the effects of the Act generally relies on long- window tests and yields mixed results. We improve upon prior designs by examining return, return volatility, and trading volume reactions to earnings news during short earnings announcement windows, which mitigates concerns that our results are driven by confounding events. Further, we employ a difference-in-differences design to control for potential contemporaneous structural changes. We document that the informativeness of earnings announcements of treatment firms (that withheld disclosure before the Act) increases relative to control firms (that disclosed voluntarily before the Act). The results are pronounced for large firms (higher regulatory scrutiny) and firms that do not pay dividends (possibly facing higher agency costs), and are symmetric for positive and negative earnings news.

 本論文は、情報の有用性は、示したものの、株主(社会)厚生の改善までは示していません。その点で、有用性に限界がありますが、それまでの実証研究から一歩踏み出した結果を示している点で、大変、興味深いものだと感じました。

Scott Callahan, Darius Palia & Eric L. Talley, Appraisal Arbitrage and Shareholder Value, 3 J. Law, Fin. & Accounting, 147 (2018)

  • Scott Callahan, Darius Palia & Eric L. Talley, Appraisal Arbitrage and Shareholder Value, 3 J. Law, Fin. & Accounting, 147 (2018)

This paper considers the question of whether the 2007 reforms had the negative repercussions that critics lament, both from theoretical and empirical perspectives. Theoretically, we extend the auction-design framework developed in Choi and Talley (2017) to derive a series of comparative statics related to observable factors concerning M&A transactions and target shareholder welfare. Using this model, we demonstrate that a credible threat of an appraisal action can sometimes constitute a valuable vehicle for augmenting shareholder value, whereby the specter of later appraisal value acts as a credible type of “reserve price” in a company auction. … More significantly, our model delivers testable empirical predictions relating to how “shocks” to the appraisal remedy affect expected shareholder value. In particular, we show that under plausible assumptions as to the status quo ante, a liberalizing shock to appraisal will lead to enhanced target shareholder welfare if it is accompanied by an increase in expected merger premia for appraisal eligible deals.

We then test this (and related) predictions empirically using the 2007 reforms as an appraisal-liberalizing shock. First, we demonstrate (consistent with our model) that deal premia are discernibly higher in appraisal eligible transactions (even when one accounts for the tax status of the deal). Second, we use a difference-in-differences specification to consider the combined effects of the 2007 shocks (Transkaryotic and the amendment of DGCL 262(h)) on deal premia for appraisal-eligible acquisition (using appraisal-ineligible deals as 4Formally, this condition also requires the assumption that under the status quo ante, a control). We find consistent evidence that the liberalizing 2007 shocks were followed by significant increases in premia associated with appraisal eligible deals relative to the control group.

Salladay v. Lev, 2020 Del. Ch. LEXIS 78, 2020 WL 954032 (Del. Ch. Feb. 27, 2020) (Glasscock, V.C.)

  • Salladay v. Lev, 2020 Del. Ch. LEXIS 78, 2020 WL 954032 (Del. Ch. Feb. 27, 2020) (Glasscock, V.C.)

The Delaware Court of Chancery recently confirmed in Salladay v. Lev that conditioning a conflicted (but non-controller) transaction upon approval by a fully empowered, disinterested and independent special committee can restore the business judgment standard of review for the transaction (rather than the more burdensome entire fairness standard that would otherwise apply). However, the court (in an opinion by Vice Chancellor Glasscock) found that such special committee “cleansing” works only if the special committee protections are put in place prior to the commencement of discussions about what might constitute an acceptable price. In Salladay, the court held that the company chairman’s discussions with the acquirer regarding price created a price collar before the special committee was formed that set the tone for future negotiations, and therefore, the special committee’s approval of the transaction did not restore the business judgment standard of review.

via Cooley, Potter Anderson, Morris James, GD&C, S&C

𠮷本健一先生古稀記念『企業金融・資本市場の法規制』(商事法務,2020)

 𠮷本健一先生の古稀をお祝いする論文集が出版されることになりました。私も,幸運にも,論文集に参加することができました。

 教科書やご論考を拝読して勉強するだけでなく,近年では,早稲田の判例研究会にて謦咳に触れる機会を得ました。様々な要因を考慮しながら物事を突き詰めて論証する姿勢から得るものが大きかったです。本論文集が𠮷本先生から得た学恩に少しでも報いるものになれば幸いです。

 現在,Amazon.co.jpにて予約受付中目次)です。

マイナスの原油価格

 この手の画像は,後から探すことが難しいことがままあるので今のうちに集めておきます。

 

 

 この点,興味深かったのは,次のtweeetと記事です。

これ興味深いなと思ったんだけど、4月8日時点で (我が社) CME は原油先物価格がマイナスになった際の処理はテスト済みと公表しており、想定されていたのでちゃんと処理された。

Oil can trade negative on the CME’s exchange as May contract plunges below zero on NYMEX https://t.co/zBPTJW7Q6f— ふ~部長 (@foohbucho) April 20, 2020

CME Group CME, -3.65% says it has been testing negative trades for oil futures, of major energy prices fall below zero. “CME Clearing has a tested plan to support the possibility of a negative options underlying and enable markets to continue to function normally,” the exchange operator said in a note on April 8.

via WSJ

MacTeX 2020へのアップグレード

$ brew cask install mactex-no-gui

$ brew cask install texshop

$ sudo tlmgr option repository ctan

$ sudo tlmgr update --self --all

$ sudo tlmgr paper a4

$ sudo /usr/local/texlive/2020/bin/x86_64-darwin/tlmgr path add

$ sudo tlmgr repository add http://contrib.texlive.info/current tlcontrib

$ sudo tlmgr pinning add tlcontrib '*'

$ brew install gnupg

$ curl -fsSL https://www.preining.info/rsa.asc | sudo tlmgr key add -

$ sudo tlmgr install japanese-otf-nonfree ptex-fontmaps-macos  cjk-gs-integrate-macos japanese-otf-uptex-nonfree

$ sudo cjk-gs-integrate --cleanup --link-texmf

$ sudo cjk-gs-integrate-macos --force --link-texmf

$ sudo mktexlsr

$ kanji-config-updmap status

$ kanji-config-updmap-user toppanbunkyu-highsierra