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support of long term investor interests in

Appraisal Rights


Intrinsic Value Realization




The Delaware Supreme Court issued a ruling on December 14, 2017 that endorsed its interpretation of the "Efficient Market Hypothesis" as a foundation for relying upon market pricing to define a company’s “fair value” in appraisal proceedings. The Forum accordingly reported that it would resume support of marketplace processes instead of judicial appraisal for its participants' realization of intrinsic value in opportunistically priced but carefully negotiated buyouts. See:

December 21, 2017 Forum Report

 Reconsidering Appraisal Rights for Long Term Value Realization



Forum reference:

Legal journal confuses appraisal rights with class action claims


The article below incorrectly reports that the petition filed earlier that day for appraisal of Calamos Asset Management seeks a determination of fair value for payment to all shareholders. The petition, like a previously filed petition by another Calamos shareholder, states in accordance with Delaware General Corporation Law § 262 that appraisal is sought only for the benefit of shareholders who have made the required demand. For copies of the petitions, see


Source: Law360, June 8. 2017 article

Calamos Investor Seeks Stock Appraisal After Parent Buyout

By Vince Sullivan

Law360, Wilmington (June 8, 2017, 6:33 PM EDT) -- A shareholder of investment services firm Calamos Asset Management Inc. filed a petition Thursday in Delaware state court seeking appraisal of its stock in the company after the firm's parent conducted a take-private transaction.

Fair Value Investments Inc. filed the petition asking the court to determine a fair value for its 100 shares of stock in Calamos Asset Management following the February deal that saw parent company Calamos Partners LLC offer $8.25 per share for the subsidiary. Section 262 of the Delaware General Corporation Law permits shareholders to demand appraisal of their shares if they feel they were undervalued in a transaction.

“Petitioner has not accepted any consideration in connection with the merger or the tender offer for any of petitioner’s shares, agreed to a price to be paid for any of petitioner’s shares, or withdrawn its demand for appraisal with respect to petitioner’s shares,” Fair Value wrote in its filing.

According to the petition, Fair Value made its initial appraisal demand to Calamos Asset Management shortly after the merger and tender offer were announced in January in compliance with the rules of Section 262.

The deal has drawn lawsuits in Delaware from other shareholders, with a putative class action arising almost immediately following the announcement of the acquisition in January. Shareholder Brian Lerman alleges the deal is structurally coercive because founder John Calamos Sr. and others own 97 percent of the subsidiary targeted for acquisition. Since the deal does not include any provisions requiring the approval of a majority of the minority shareholders, Lerman argued the transaction could be foisted on the minority investors who have little to no recourse to stop the deal.

Preclusive deal protections, including a $2.5 million termination fee due to Calamos Partners if 15 percent of shareholders demand appraisal, also hamper the rights of minority shareholders, that suit said.

The Lerman suit alleges that Calamos Partners concocted a scheme to devalue Calamos Asset Management in the months before the tender offer was made and the ultimate deal price of $8.25 per share undervalued the subsidiary significantly.

Lerman sought to expedite his motion for a preliminary injunction to stop the tender offer from closing when he filed his suit in January, but Vice Chancellor J. Travis Laster denied that motion and allowed the transaction to go through.

In the new appraisal action, Fair Value is asking the chancery court to determine the fair value of its Class A common stock and the payment of any difference in value not just to Fair Value, but to all holders of Class A shares, along with legal costs and fees.

Representatives for Fair Value and Calamos Asset Management could not immediately be reached late Thursday for comment.

Fair Value is represented by Edward M. McNally and Patricia A. Winston of Morris James LLP.

Counsel information for Calamos Asset Management was not immediately available Thursday.

The case is Fair Value Investments Inc. v. Calamos Asset Management Inc., case number 2017-0436, in the Delaware Chancery Court.

--Additional reporting by Cara Mannion. Editing by Emily Kokoll.


© 2017, Portfolio Media, Inc.


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