Huff Fund Investment Partnership d/b/a Musashi II Ltd. v. CKx, Inc.
Delaware Court of Chancery
2013 WL 5878807 (2013)
- Written by Heather Whittemore, JD
Facts
CKx, Inc. (defendant) was an entertainment company that owned several popular television franchises. By 2011 the franchises owned by CKx were declining in ratings. That year, three private-equity firms, including Apollo, submitted bids to purchase CKx. CKx negotiated with the bidders and also reached out to other potential buyers. Eventually, CKx accepted Apollo’s bid, and CKx merged into Apollo. Though Apollo had initially bid $5 per share, its final bid for CKx was $5.50 per share. A group of CKx shareholders (the opposing shareholders) (plaintiffs) opposed the merger and exercised their appraisal rights to receive fair value for their shares. The opposing shareholders used multiple valuation methods, including a comparable-company analysis and a discounted-cash-flow analysis, to value the shares at $11.02 per share. In making their comparable-company analysis, the opposing shareholders could not find companies that were fully comparable to CKx. CKx used a discounted-cash-flow analysis to value the shares at $4.41 per share. Though the opposing shareholders and CKx used different cash-flow projections to conduct their discounted-cash-flow analyses, both parties used projections that were made by CKx during contract negotiations, meaning the projections were not made in the ordinary course of CKx’s business.
Rule of Law
Issue
Holding and Reasoning (Glasscock, J.)
What to do next…
Here's why 816,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.
