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The Shareholder Forumtm

special project of the public interest program for

Fair Investor Access

Supporting investor interests in

appraisal rights for intrinsic value realization

in the buyout of

Dell Inc.

For related issues, see programs for

Appraisal Rights Investments

Fair Investor Access

Project Status

Forum participants were encouraged to consider appraisal rights in June 2013 as a means of realizing the same long term intrinsic value that the company's founder and private equity partner sought in an opportunistic market-priced buyout, and legal research of court valuation standards was commissioned to support the required investment decisions.

The buyout transaction became effective on October 28, 2013 at an offer price of $13.75 per share, and the appraisal case was initiated on October 29, 2013, by the Forum's representative petitioner, Cavan Partners, LP. The Delaware Chancery Court issued its decision on May 31, 2016, establishing the intrinsic fair value of Dell shares at the effective date as $17.62 per share, approximately 28.1% more than the offer price, with definitive legal explanations confirming the foundations of Shareholder Forum support for appraisal rights.

Each of the Dell shareholders who chose to rely upon the Forum's support satisfied the procedural requirements to be eligible for payment of the $17.62 fair value, plus interest on that amount compounding since the effective date at 5% above the Federal Reserve discount rate.

Note: On December 14, 2017, the Delaware Supreme Court reversed and remanded the decision above, encouraging reliance upon market pricing of the transaction as a determination of "fair value." The Forum accordingly reported that it would resume support of marketplace processes instead of judicial appraisal for the realization of intrinsic value in opportunistically priced but carefully negotiated buyouts.


The following court order, filed an hour before the report below was distributed, requires Grant & Eisenhofer and T Rowe Price to respond to discovery demands relating to charges for legal services, and establishes a schedule for completing discovery and briefing in about two months:


For a printable copy of this report, click here.

Forum Report: Dell Appraisal Rights


Conclusions from Investigation of Reported Settlement

Response of Lead Counsel

Fair opportunity to consider a settlement that may not exist

Business view of Lead Counsel’s bill for $1.45 per share

The only thing that has been learned about the Dell settlement with the ineligible T Rowe Price petitioners since Tuesday’s Forum report[1] about what we “need to know” is that we are not likely to get any information without court orders to require disclosure. We therefore need to consider whether those efforts would be justified.

Response of Lead Counsel

Responding to my Monday letter,[2] Stuart Grant of Grant & Eisenhofer (“G&E”) told me by telephone yesterday morning that he would not provide the requested copy of the written agreement for the settlement he had negotiated with Dell on behalf of his T Rowe Price clients, stating that the agreement was confidential. In response to my view that we should be able to review what the Court approved, he stated that the Court had not been given a copy, and had relied upon only the verbal explanations he and Dell’s counsel had provided during the June 27 teleconference.[3]

Mr. Grant also stated that he considers my Forum reports of these issues to be “misleading and destructive.” I therefore invited him to send me a statement of any views he wants to offer, and assured him that they would be presented without editing.[4] Nothing has been received, but anything Mr. Grant wishes to submit in the future will of course be presented and posted publicly on the Forum website.

Fair opportunity to consider a settlement that may not exist

The surprising report that no written agreement was provided to the court raises obvious questions on many levels about what, if anything, was actually settled.

As a practical business matter, though, eligible claimants may not need to concern themselves with the details of the supposed settlement. We can assume that Dell did in fact pay $28 million to T Rowe Price, since both of them report that amount in SEC filings.[5] If the purpose of that payment really was to eliminate risks of eligibility appeals that most professionals considered virtually worthless, we can assume that Dell will take the initiative itself to offer significantly more than that $.88 per share to persuade all the eligible claimants that they should give up their much more valuable rights to appeal.

If Dell does not make such an offer to eligible claimants during the next week or two, it should simply be left to the court to determine why it was asked to approve a payment that appears to be for purposes other than the stated termination of rights to appeal. This inquiry could of course be important to the public interests that concern the court, but it is unlikely to result in any direct financial benefit to eligible claimants.

Business view of Lead Counsel’s bill for $1.45 per share

Our attention to the reported settlement between Dell and T Rowe Price supports the view that G&E has served its T Rowe Price clients well, but has served the other appraisal claimants only to the extent that their interests coincided with those of T Rowe Price.

While the lawyers in the case may develop complicated arguments about the $1.45 per share that G&E wants to charge the non-client eligible claimants as their appointed Lead Counsel, the business analysis is very simple:

§    G&E has chosen to provide services and opportunities to its clients that have not been provided to the non-client claimants the firm was obligated to serve as Lead Counsel.

§    As reported in many pages of court filings, G&E had repeatedly refused to satisfy the obligations of Lead Counsel established by the Court’s Consolidation Order, and will not provide any support of its charges.[6]

We can assume that G&E will in any event be well paid by its T Rowe Price clients, even if only for their negotiation of the miraculous $28 million settlement. Beyond that, as astute lawyers G&E can be expected to have rights under their engagement contract to require full payment of the fees they should have earned in reliance upon the affidavits T Rowe Price had signed for their petitioners verifying that they had “not voted in favor” of the transaction. And if G&E had been aware that they could not rely upon those stated voting positions that were presented to court, we would not need to be sympathetic to their loss of fees.

Based on this business analysis, there should no longer be any need for us to learn more about G&E’s charges or about what T Rowe Price is paying them, or to be distracted by any other information demands that will delay the final resolution of the case and a distribution of payments to eligible claimants. If the Magnetar or Global petitioners that are already engaged in motions relating to the fee application adopt this business analysis to argue that the court should not impose any G&E charges on the eligible claimants, I will recommend the Cavan petitioner’s support of their position.

GL – July 14, 2016

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335





This project was conducted as part of the Shareholder Forum's public interest  program for "Fair Investor Access," which is open free of charge to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The management of Dell Inc. declined the Forum's invitation to provide leadership of this project, but was encouraged to collaborate in its progress to assure cost-efficient, timely delivery of information relevant to investor decisions. As the project evolved, those information requirements were ultimately satisfied in the context of an appraisal proceeding.

Inquiries about this project and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.