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Courts of course should always be last resort, after all, there could be fraud (e.g. if the CEO was deliberately hiding some information that would have increas
by tomp 10y ago
Courts of course should always be last resort, after all, there could be fraud (e.g. if the CEO was deliberately hiding some information that would have increased the market price).
But the problem with this ruling is, that it's ridiculous - the court's argument is basically that the "fair value" is above what PE paid because PE wanted to make a profit! It basically contradicts the whole idea of the market (buying something if you think it's worth more than the current price)!
- TheCoelacanth 10y agoIn a market, typically things are sold voluntarily. These are people who were forced to sell.
- scotty79 10y agoExactly, you are abandoning market and its prices once you say "those stocks are just pieces of paper now, we'll give you few bucks for each so you won't sue us"
- rayiner 10y agoThe appraisal right makes sense for smaller companies, even in the absence of fraud. There, you can have a majority shareholder come in and force a minority to sell based on a lowball valuation. There are no competing PE offers or public exchange prices to use as a reference in that scenario, so the appraisal right at least ensures an independent look at the purported valuation.
- cortesoft 10y agoIt isn't ridiculous, it is the law: https://www.sec.gov/Archives/edgar/data/878280/000119312508204014/dex99f.htm https://www.sec.gov/Archives/edgar/data/878280/0001193125082... The PE firms bought the company knowing this could, and probably would, happen. It is factored into the price they are willing to pay.