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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.



For a printable copy of this report, click here.

Forum Report: Dell Appraisal Rights


Rights to Payment for Waiving Appeal of Dell Appraisal Decisions

Questions raised about rights of all claimants

Determining the interests of all claimants

In the Forum’s reports of investor interests in Dell’s settlement with T. Rowe Price a couple of months ago,[1] it had been assumed that Dell would provide a copy of their agreement defining the specific terms they are required to make available to all other claimants. They have not yet done so.

Questions raised about rights of all claimants

This unusual challenge raises important questions about what claimants should expect and about who is obligated to do what, not only in the this case but in future appraisal cases.

Ø  What are the terms that Dell is required to offer other claimants? The only information available about the terms of settlement has been what was verbally summarized by counsel for Dell and T Rowe Price in their private conference with the court when they requested approval,[2] and what was subsequently reported in SEC filings by Dell and T Rowe Price.[3] Taken together, these sources provide only a general indication that Dell paid T Rowe Price $28 million, or approximately $.88 per share, for a waiver of rights to appeal the court’s determination of the amount Dell was required to pay the petitioners managed by T Rowe Price. The settling parties argue that other claimants should be able to get this extra $.88 per share only if they give up rights to what the court has determined they are due, so that Dell would give a claimant only the $13.75 offer price plus the $.88 “settlement” payment. This position is of course inconsistent with the logic of a settlement that reportedly accepts a court’s decision instead of rejecting it, and is clearly not supported by any documentation of the settlement or by the SEC filings. The limited evidence instead supports the extra $.88 per share payment in consideration of a claimant’s agreement to waive appeal of the court’s decision about the amount Dell must pay that claimant, meaning that Dell would pay the $.88 per share in addition to whatever amount the court determined was due.[4]

Ø    Should an appraisal petitioner be allowed to settle without providing the written agreement to other petitioners, possibly to all claimants, or at least to the court?  As indicated, Dell and T Rowe Price have rejected repeated requests for copies of the agreement, and counsel for T Rowe Price has stated that the court has not been given a copy.[5] Dell has been encouraged to reconsider its position, but if they do not provide the agreement voluntarily we will have to consider asking the court to compel disclosure.[6]

Ø  Who is responsible for supporting the interests of non-petitioner claimants? Whether or not the court’s Consolidation Order appointing Grant & Eisenhofer as Lead Counsel should make the firm responsible for the interests of all claimants in any settlement, the firm has indicated that in this case it will not be representing any parties other than its directly contracted T Rowe Price clients in matters relating to this settlement.[7] Other petitioners have of course formally “appeared” in the case with counsel and therefore have the ability to be heard by the court, but non-petitioning claimants in appraisal proceedings have not appeared and must therefore depend on the petitioners to address their interests. Delaware courts have referred to this reliance upon petitioners in appraisal cases as being generally similar to the reliance upon lead plaintiffs in class actions, but the processes are not identical and the rules for petitioner responsibilities in appraisal proceedings are not well defined. Under these circumstances, the Forum is advising its delegate Cavan petitioner to support the interests of all claimants not represented by Grant & Eisenhofer in their rights to consider a fair settlement offer, and in doing so to test new standards for the conduct of appraisal proceedings.

Determining the interests of all claimants

Anyone with a claimant interest in the Dell case – or with a broader investor interest in the fair process of other appraisal cases – is encouraged to offer advice about what we should be considering.

Cavan has also engaged a leading expert on investor rights, Cornish F. Hitchcock of the Hitchcock Law Firm PLLC, as special counsel to guide our attention to relevant interests and regulatory considerations. As many of you know from his activities with past Forum programs and with the Council of Institutional Investors, Mr. Hitchcock’s expertise and wisdom can be relied upon to assure our understanding of the issues that need to be addressed.

I will of course welcome your questions and comments.

GL – September 19, 2016

Gary Lutin

Chairman, The Shareholder Forum

575 Madison Avenue, New York, New York 10022

Tel: 212-605-0335



[6] See September 14, 2016 Shareholder Forum letter to Stuart M. Grant of Grant & Eisenhofer as counsel for settling T. Rowe Price petitioners and John D. Hendershot of Richards, Layton & Finger as counsel for Dell (1 page, 160 KB, in PDF format); Mr. Grant responded only by confirming receipt, and Mr. Hendershot reported he would require more time to respond.

[7] See the September 14, 2016 letter referenced above in footnote #6.



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.