On December 14, the Delaware Supreme Court issued its much-anticipated opinion in the appraisal proceeding from the 2013 acquisition of Dell Inc. Along with August’s DFC Global opinion, the court’s pronouncements in Dell will have lasting effects on the way that appraisal valuations play out for years to come. In particular, the case(s) will have a durable impact on (a) how courts weigh competing financial methodologies for assessing fair value, (b) how to scrutinize the bidding process and procedures, and (c) whether courts should distinguish among strategic bidders, financial bidders, and management bidders in making fair-value assessments.
The … Read more
Attacks on the authority of the Financial Stability Oversight Council (“FSOC”) to designate non-bank financial firms as systemically important, and thus subject to the Fed’s oversight, are misguided.  Such authority is essential to the long-term maintenance of financial stability, because financial intermediation will increasingly move outside the current regulatory perimeter. The most effective way for FSOC to use designation authority, however, is prospectively: to negotiate size and regulatory constraints with firms to avoid designation, because the optimal number of additional systemic firms is zero.
Historically, financial crises have been of two general types: foreign exchange and domestic banking. A … Read more