In appraisal rights claims, the price paid in a merger may not represent “fair value,” especially when the deal involves related parties. This article summarizes a recent Delaware Chancery Court case, where the judge concluded that a deal price is only as reliable as the process that was used to negotiate the transaction. In the absence of a “competitive and fair auction,” the court will rely on other business valuation methods instead.
John Douglas Dunmire v. Farmers & Merchants Bancorp of Western Pennsylvania, Inc., 2016 Del. Ch., C.A. No. 10589-CB, Nov. 10, 2016