Kelly, golden and hahn discuss how blockchain share. Merion capital lp and merion capital ii lp, bmc software, inc. Bmc software,3 which upheld the standing of appraisal arbitrageurs to bring appraisal actions with respect to shares purchased after the record date for the stockholder. Delaware court of chancery rejects sharetracing standing.
The stockholder in that case faced a unique problem because cede refused to make its appraisal demand on its behalf, so merion was forced to have its holdings in bmc stock. Ul by going to court and arguing that a fair deal price should have been much higher. Brattle principal torben voetmann and senior associate sujay dave have authored a law360 article on the merion capital lp and merion capital ii lp v. A person unfairly gets a benefit by chance, mistake, or anothers misfortune for which the one enriched has not paid or worked and morally and ethically should not keep. Vice chancellor glasscock s opinion in merion capital lp v. Discounted cash flow valuation dcf delaware docket.
Immediately prior to the merger, petitioners owned 7,629,100 shares of bmc common stock. Chancery court confirms standing of record holder as of. Delaware judge rules against hedge funds in bmc buyout. This appraisal action stems from a takeprivate merger between respondent bmc software, inc.
Both decisions were based on what the court considered to be the plain language of the. Bmc stock was originally traded on nasdaq under the symbol bmcs and on the new york stock exchange with symbol bmc, but the. Chancery decision demonstrates when to skip appraisal law360. Lowenstein sandler appraisal rights litigation blog. Receive free daily summaries of new opinions from the delaware court of chancery. In bmc software, petitioner merion capital lp merion sought appraisal for 7.
Possibility of buying into an appraisal claim reaffirmed. Oct 25, 2019 merion capital lp and merion capital ii lp v. Recent opinions highlight different appraisal valuation methods. Bmc is a software companyone of the largest in the world at the time of the mergerspecializing in software for information technology. Wachtell lipton represents the respondent in the ancestry case. Chancery court holds that merger price that resulted from. Court of chancery accepts merger price in appraisal action. Merion, one of the petitioners in this appraisal action, purchased its shares of ancestry after the record date for that transaction.
Using the deal price for determining fair value in appraisal proceedings guhan subramanian february 6, 2017 draft. Chancery court holds that merger price that resulted from a. Recent delaware rulings support practice of appraisal. The october 21, 2015 decision, merion capital lp and merion capital ii lp v. Nov 11, 2015 the october 21, 2015 decision, merion capital lp and merion capital ii lp v. Delaware court decisions on appraisal rights highlight. Oct 28, 2015 on october 21, 2015, the delaware court of chancery issued a posttrial opinion in an appraisal action in which it yet again found that the merger price was the most reliable indicator of fair value. Cases addressed in this episode include appraisal issues, merion capital lp v. Upon a petition for appraisal of stock pursuant to 8 del.
Chancery court confirms standing of record holder as of appraisal. On september, 20, petitioners merion capital lp and merion capital ii lp commenced this action by filing a verified petition for appraisal of stock pursuant to 8 del. Vice chancellor glasscocks opinion in merion capital lp v. In a pair of memorandum opinions written by vice chancellor glasscock and decided on january 5, 2015, the court of chancery of the state of delaware, in in re appraisal of, inc. Bmc software was brought by merion capital, a selfdescribed eventdriven investment fund that specializes in appraisal arbitrage. Bmc that were purchased after the record date for a goingprivate merger. Justia us law case law delaware case law delaware court of chancery decisions 2016 merion capital l. Merion, the beneficial owner of the shares, requested its broker to direct the nominee record holder of its shares to demand appraisal with respect to the purchased shares on. I presided over a fourday trial in this matter from march 16 to march 19, 2015. In fiscal years 2011 to 20, bmc, one of the largest software companies in the world, saw a steady decrease in its revenue.
The delaware court of chancery issued companion opinions clarifying delawares standing requirements for appraisal petitions under 8 del. Bmc software s lessons for expert witnesses law360, new york february 23, 2016, 11. Bmc offers saasbased and onpremise software and services in areas including cloud computing, it service management, automation, it operations, and mainframe. Apr 10, 2015 in bmc software, merion capital sought appraisal, through its broker, with respect to shares of bmc purchased after the record date of a goingprivate transaction. Summaries and analysis of recent delaware court decisions concerning businessrelated litigation. Michael sirkin mike sirkin has substantial trial experience, including with valuation issues, having represented respondents bmc software, lender processing services, and solera holdings in three of the largest appraisal trials in history. The court reaffirmed this holding in in re appraisal of inc. Court of chancery reaffirms possibility of buying into. Bmc software opinion and the lessons learned for experts when opining on fair value in delaware in this action, which was the largest statutory appraisal action in the delaware court of chancery since 2010, dissenting shareholder merion capital. Jan 07, 2015 in two separate rulings on january 5, 2015 in re appraisal of. Oct 26, 2015 merion capital lp and merion capital ii lp v. Merion, the beneficial owner of the shares, requested its broker to direct the nominee record holder of its shares to demand. The parties submitted posttrial briefing and i heard posttrial oral argument on june 23, 2015.
Justia us law case law delaware case law delaware court of chancery decisions 2015 merion capital lp and merion capital ii lp v. Bmc is a software companyone of the largest in the world at the. The stockholder in that case faced a unique problem because cede refused to make its appraisal demand on its behalf, so merion was forced to have its holdings in bmc stock withdrawn from the fungible mass at dtccede. On january 5, 2015, the delaware chancery court issued its ruling in merion capital lp v. This trend is likely to continue, in the wake of two recent decisions, in re appraisal, inc. Ballantine, minority controlling stockholders, in re kkr financial holdings llc shareholder litigation, in. Petitioners merion capital lp and merion capital ii lp collectively, merion are selfdescribed eventdriven investment funds, 5 or, in the words of the respondent, hedge funds that specialize in appraisal arbitrage. I discuss this issue briefly in connection with a discussion of the information rights conveyed to stockholders in section 262e below, and more fully in merion capital lp v. Bmc and two delaware corpora tions formed by a consortium of private equity buyers solely for the purpose of taking bmc privateboxer parent company inc. Hsu v odn holding corporation 2017 voting agreement.
In re appraisal of dell inc the continuing relevance of deal price. Jan 29, 2015 in a pair of memorandum opinions written by vice chancellor glasscock and decided on january 5, 2015, the court of chancery of the state of delaware, in in re appraisal of, inc. Merion capital lp urged a delaware chancery judge on tuesday to reprice its holdings in bmc software inc. Hedge fund scores win for appraisal arbitrage strategy reuters. On october 21, 2015, the delaware court of chancery issued a posttrial opinion in an appraisal action in which it yet again found that the merger price was the most reliable indicator of fair value. In this case, the broker refused to initiate an appraisal action and merion capital transferred record ownership of the shares into its own name and made a direct appraisal demand. In ancestry, the court held that the plain language of the statute does not enact any burden on the beneficial shareholder to show that the shares were not voted in favor of the merger. Get free access to the complete judgment in merion capital lp v.
Recent delaware rulings support practice of appraisal arbitrage. Synergies made the difference in clearwire stockholders. Merion capital lp and merion capital ii lp, bmc software. In bmc software, merion and an affiliated fund for simplicity, collectively referred to as merion purchased shares of bmc software, inc. Bmc and two delaware corporations formed by a consortium of private equity buyers solely for the purpose of taking bmc privateboxer parent company inc.
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