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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:

Conglomerate sues legal counsel for failing to explain procedures that could have blocked litigation claims of unfair buyout


For a report of the initiation of claims reported below, and for the complaint filed at the time, see


Source: Law360, August 17. 2017 article

Paul Weiss Accused By Financial Co. Of Bad Merger Advice

By Emma Cueto

Law360, New York (August 17, 2017, 8:41 PM EDT) -- A financial services company issued a summons Wednesday in New York state court against Paul Weiss Rifkind Wharton & Garrison LLP, accusing the firm of giving bad advice about Delaware law ahead of a merger that opened the company up to potential liability, including a class action lawsuit.

HC2 Holdings Inc. said that Paul Weiss’ advice caused the company to set up its tender offer for Schuff International Inc. stock, and a subsequent merger, in a way that ensured the deal would be subject to the much stricter “entire fairness” standard, not the much more relaxed “business judgment rule,” the company said in its summons.

“Defendants’ failure has caused and will continue to cause HC2 to incur significant legal expense and potential liability in defending an action challenging the merger,” the summons said.

HC2 made its tender offer for Schuff stock in 2014, according to the summons. Paul Weiss represented the company during the sale, according to the summons, but HC2 claims that the firm and two of its partners, Jeffrey D. Marell and Raphael M. Russo, who are also named in the suit, did not properly advise HC2 about Delaware law.

The attorneys should have told HC2 to get a recommendation from a special committee of the Schuff board and make the tender offer conditional on approval by Schuff shareholders, the summons said. HC2 argued that by not doing this,  Paul Weiss had exposed the company to accusations that the deal was unfair and to claims that HC2 breached its fiduciary duties.

The company said it had already had to pay significant legal expenses as a result of the alleged bad advice, including defending itself from a class action filed in November 2014 in Delaware state court.

A Paul Weiss spokesperson told Law360 on Thursday, "The case is meritless and we will defend it vigorously."

Counsel for HC2 Holdings did not respond Thursday to a request for comment.

HC2 is represented by Eric R. Levine, Eric Heichel and Peter Reiser of Eiseman Levine Lehrhaupt & Kakoyiannis PC.
Counsel information for Paul Weiss was not available Thursday.

The case is HC2 Holdings Inc. v. Paul Weiss Rifkind Wharton & Garrison LLP et al., case number 655404/2017, in the Supreme Court of the State of New York, County of New York.

--Editing by Bruce Goldman.

© 2017, Portfolio Media, Inc.


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