Salzberg v. Sciabacucchi, 2020 Del. LEXIS 100 (Del. Mar. 18, 2020)

RLF writes:

In the highly anticipated decision of Salzberg v. Sciabacucchi, No. 346, 2019 (Del. Mar. 18, 2020), the Delaware Supreme Court, reversing the Delaware Court of Chancery’s decision, confirmed the facial validity of provisions in the certificates of incorporation of Blue Apron Holdings, Inc., Stitch Fix, Inc., and Roku, Inc. requiring all claims under the Securities Act of 1933 (the “’33 Act”) to be brought in federal courts (“Federal Forum Provisions”). Similar provisions have been adopted by dozens of Delaware corporations and are intended to address the inefficiencies of multi-jurisdictional ’33 Act litigation in light of the increasing number of ’33 Act claims filed in state, rather than federal, courts.

via Richards, Layton & Finger

See also Opinion

Manichaean Capital v. SourceHOV Holdings, 2020 Del. Ch. LEXIS 38 (Del. Ch. Jan. 30, 2020)

In fulfilling the statutory mandate to account for “all relevant factors” bearing on “fair value,” Delaware courts consider a range of evidence that often includes (i) “market evidence,” such as a company’s unaffected trading price or the “deal price” following an appropriate “market check” and (ii) “traditional valuation techniques,” such as a comparable company, comparable transaction or DCF analysis. In this case, however, the parties and their experts agree that the circumstances surrounding the Business Combination disqualify market evidence as reliable inputs for a fair value analysis. Accordingly, the valuation presentation from both sides focused on DCF. In my view, that focus was well placed.

SourceHOV’s deal process (or lack thereof) undermines any reliance on deal price as an indicator of fair value. Moreover, as a private company, SourceHOV’s equity was not traded in an efficient market, so its unaffected market price is also an unreliable indicator of fair value. Without reliable market evidence of fair value, the parties were left to focus on “traditional valuation methods” to appraise SourceHOV. This, of course, places the spotlight squarely on their competing valuation experts. In other words, as I see it, this case has played out as the quintessential “battle of the experts.”

Both experts agree there are no sufficiently comparable companies or transactions with which to perform either a trading multiples or a transaction multiples analysis. Given that other valuation techniques do not fit here, both experts also agree that a DCF analysis is the only reliable method to calculate SourceHOV’s fair value. In light of the experts’ agreement, and seeing no reason to disagree, I am satisfied that a DCF analysis is the only reliable indicator of SourceHOV’s fair value. (footnotes omitted)

via Lowenstein Sandler, DealLawyers

In re Appraisal of Panera Bread Company

In re Appraisal of Panera Bread Company, 2020 Del. Ch. LEXIS 42 (Jan. 31, 2020) (Zurn, V.C.)

In this appraisal action, I must determine the fair value of each share of the subject company on the closing date of its acquisition. I find that the process by which the company was sold bore several objective indicia of reliability, which were not undermined by flaws in that process. I therefore find that the deal price is persuasive evidence of fair value, and give no weight to other valuation metrics. I deduct some synergies, but find others were not adequately proven. I undergo that synergies analysis solely to fulfill my statutory mandate, rather than to effectuate any transfer of funds between the parties, because the company prepaid the entire deal price and has no recourse for a refund under the appraisal statute.

via Columbia, S&C,

Over 60 Leading Finance Economists Ask SEC to Revise the Shareholder Voting Draft Reform

We share the Commission’s concerns about concentration in the proxy advisory market. Yet, we disagree with the following proposed remedies: 1) forcing proxy advisors to share their opinions with managers ahead of time and 2) treating opinions on proxies as proxy solicitations. By increasing the cost of opining on proxy statements such proposals will only discourage new entry into the proxy advisory market and exacerbate the problem of market concentration in this sector.

 SECによる規則提案に対するパブリック・コメントです。会社法研究者だけでなく、経済学者も名を連ねています。

See also Amendments to Exemptions from the Proxy Rules for Proxy Voting Advice

United States v. Blaszczak, 2019 U.S. App. LEXIS 38662, 2019 WL 7289753 (2d Cir. Dec. 30, 2019)

The court held that the “personal benefit” test for insider trading established by the Supreme Court in Dirks v. SEC does not apply to wire and securities fraud under Title 18 of the U.S. Code. Additionally, the court held that confidential government information constitutes “property” for the purposes of federal fraud statutes. The ruling will make it easier for the government to prosecute insider trading even when there is no clear benefit to the source who provided the information. (footnote omitted)

via TheCorporateCounsel.net, GD&C, S&C, Milbank, Akin Gump, WF&G, Andrew Vollmer, Alison Frankel, John C. Coffee Jr.

Insider Trading Prohibition Act

 Insider Trading Prohibition Actなる法律が米国の連邦下院を通過したらしいです。この手の法律は、散発的に提案されるので、気に留めていなかったのですが、下院の投票が410対13という情報を得て、少し調べてみました。govtrack.usによると法律として成立する可能性は、1%程度のようです。一応、調べた範囲内で有用だと思ったリンクを纏めておきます。

 改正法案の内容は、既存の判例法理を基礎にしたものなので、ある程度意図を理解できるのですが、細かい点で既存の判例法理との差異がありそうです。印象としては、判例法理よりも禁止の幅が広いように思えます。どうでしょうか。

See also Columbia, CGS&H, Paul Hastings, Merritt B. Fox