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Court of Chancery Determines Fair Value Of Stock In Appraisal Action

Henke v. Trilithic Inc., C.A. No. 13155, 2005 WL 2899677 (Del. Ch. Oct. 28, 2005). Plaintiff, who was a stockholder of Trilithic, Inc., brought an appraisal action against Defendant Trilithic under 8 Del. C. ยง262. Plaintiff was a stockholder of Defendant until it merged with an Indiana corporation on June 1, 1993. Plaintiff dissented from the merger and perfected his appraisal rights. Applying a discounted cash flow ("DCF") analysis, Plaintiff's expert appraised Trilithic's equity value as worth $6,494,526 as of the merger date and Plaintiff's 25% interest as worth $1,623,631.50. Applying a DCF analysis, comparable company analysis and subject company transaction analysis, Defendant's expert appraised Trilithic equity as worth $222,425 and Plaintiff's 25% interest as worth $55,606. The Court found that neither party fully satisfied its burden of persuasion regarding the value of Trilithic. Accordingly, the Court conducted its own independent valuation to conclude that Trilithic's equity value was $651,062.16 and Plaintiff's 25% interest was worth $162,765.54. The Court awarded pre-judgment interest at the prudent investor rate of 6.14% as established by Defendant and compounded the interest monthly. Subsequently, the Court granted in part and denied in part Plaintiff's motion for reargument. Henke v. Trilithic Inc., C.A. No. 13155, 2005 WL 2899677 (Del. Ch. Dec. 20, 2005). http://courts.delaware.gov/opinions/(shflcr452r1gon3zewev0555)/download.aspx?ID=70080 The Court held that it had misapprehended a fact affecting its decision. Accordingly, the Court modified its prior decision to hold that Trilithic's equity value was $805,586.37 and Plaintiff's 25% interest was worth $201,396.59.

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