Court Of Chancery Rejects Market In Appraisal Determination

Posted on April 23, 2010 by Edward M. McNally

Global GT LP v. Golden Telecom Inc., C.A. 3698 (April 23, 2010)

This is an interesting appraisal decision for 2 reasons.  First, the Court declined to use the price set in the market as a strong indicator of value notwithstanding recent decisions in Delaware that had been inclined to do so. The Court was not satisfied that in the case of this company with its dominant stockholders announcing that they would only support the deal on the table that there was a real market check.

Second, the Court's analysis of how to do a discounted cash flow valuation again illustrates its preference for expert opinion based on a knowledge of the industry involved.

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