4 ms·

True!

glenstein 2y ago
Hold on, I feel like everyone's missing that theres a real argument here. I think the key point was: >They are just judging if anything reaches the point where shareholders were legally harmed, which still gives a lot of gray area to the acquiring company. This distinguishes the lawsuit failing from the idea that a fair price was paid. The competing contentions are (a) fair price vs (b) unfair but beneath threshold of legally punishable harm.
- michaelmrose 2y ago
  (c) no fair price can possibly be determined but the burden of proof lies with the claimant (d) a court has no idea what a fair price would look like but made a finding of fact based on expert testimony despite being poorly situated to evaluate it
  - fedestair 2y ago
    (e) the court in question answers to Delaware which is in the business of siding with any company that incorporates there.
- rayiner 2y ago
  Note that this is a civil suit, so the concept of a “threshold of legally punishable harm” doesn’t apply. There’s no “punishment,” and the plaintiff doesn’t need to meet the high standards (proof beyond a reasonable doubt, etc.) for imposing a punishment. Under Delaware law, there’s two standards for evaluating this kind of claim. When there is no conflict of interest, the court applies the “business judgment rule,” which is similar to what you seem to be thinking—it gives corporate officers wide latitude. But when there is a conflict of interest, the court applies the “entire fairness” standard, which requires both fair dealing and a fair price. And a fair price means what it sounds like—it’s what an objective businessman would consider a fair price under the circumstances. It doesn’t need to be the best price, but it must be within the range of fair. And to establish a fair price, the court relies on evidence from financial valuation experts. It’s a rigorous standard that’s hard to meet.
  - kelnos 2y ago
    > And to establish a fair price, the court relies on evidence from financial valuation experts. I generally find expert testimony to be suspect. Anyone can be trotted forward as an expert, rattle off their credentials, and say whatever they feel like saying, depending on who is paying them to testify. And financial valuation is not a science; there is of course plenty of math involved that takes into account hard, objective numbers, but a good chunk of it is opinion, too, as no one an know the future. Having said that, the Delaware Chancery Court of course has more experience in these matters than any other state's courts, so I am of the opinion that they're less likely to be duped by "experts", but sill... it can and does happen.
    - ethbr1 2y ago
      The way to improved expert testimony would be to tie it to professional licensure in a stricter-than-practice way. Ofc, that wouldn't help for software... because no licensure.
      - inetknght 2y ago
        I'm of the opinion that software should have licensure, given the degrading quality of software.
        ethbr1 2y ago
        I'd say given the lack of professional consequences for unethical behavior. ;)
      - bumby 2y ago
        NCEES has brought back the controls systems professional engineering licensure. This is the same license that civil engineers use to stamp designs for example. Of course, the license doesn’t mean anything if everyone falls under an industrial exemption. I’d be in favor of safety-critical software requiring a PE stamp.
    - rayiner 2y ago

True!

Hold on, I feel like everyone's missing that theres a real argument here. I think the key point was: >They are just judging if anything reaches the point where shareholders were legally harmed, which still gives a lot of gray area to the acquiring company. This distinguishes the lawsuit failing from the idea that a fair price was paid. The competing contentions are (a) fair price vs (b) unfair but beneath threshold of legally punishable harm.

michaelmrose 2y ago
(c) no fair price can possibly be determined but the burden of proof lies with the claimant (d) a court has no idea what a fair price would look like but made a finding of fact based on expert testimony despite being poorly situated to evaluate it
- fedestair 2y ago
  (e) the court in question answers to Delaware which is in the business of siding with any company that incorporates there.
rayiner 2y ago
Note that this is a civil suit, so the concept of a “threshold of legally punishable harm” doesn’t apply. There’s no “punishment,” and the plaintiff doesn’t need to meet the high standards (proof beyond a reasonable doubt, etc.) for imposing a punishment. Under Delaware law, there’s two standards for evaluating this kind of claim. When there is no conflict of interest, the court applies the “business judgment rule,” which is similar to what you seem to be thinking—it gives corporate officers wide latitude. But when there is a conflict of interest, the court applies the “entire fairness” standard, which requires both fair dealing and a fair price. And a fair price means what it sounds like—it’s what an objective businessman would consider a fair price under the circumstances. It doesn’t need to be the best price, but it must be within the range of fair. And to establish a fair price, the court relies on evidence from financial valuation experts. It’s a rigorous standard that’s hard to meet.
- kelnos 2y ago
  > And to establish a fair price, the court relies on evidence from financial valuation experts. I generally find expert testimony to be suspect. Anyone can be trotted forward as an expert, rattle off their credentials, and say whatever they feel like saying, depending on who is paying them to testify. And financial valuation is not a science; there is of course plenty of math involved that takes into account hard, objective numbers, but a good chunk of it is opinion, too, as no one an know the future. Having said that, the Delaware Chancery Court of course has more experience in these matters than any other state's courts, so I am of the opinion that they're less likely to be duped by "experts", but sill... it can and does happen.
  - ethbr1 2y ago
    The way to improved expert testimony would be to tie it to professional licensure in a stricter-than-practice way. Ofc, that wouldn't help for software... because no licensure.
    - inetknght 2y ago
      I'm of the opinion that software should have licensure, given the degrading quality of software.
      - ethbr1 2y ago
        I'd say given the lack of professional consequences for unethical behavior. ;)
    - bumby 2y ago
      NCEES has brought back the controls systems professional engineering licensure. This is the same license that civil engineers use to stamp designs for example. Of course, the license doesn’t mean anything if everyone falls under an industrial exemption. I’d be in favor of safety-critical software requiring a PE stamp.
  - rayiner 2y ago