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July 13, 2015
Yvette Austin Smith and Brattle Team Prevail in DE Chancery Court Valuation Ruling

Brattle principal Yvette Austin Smith recently provided successful valuation testimony in a combined breach of fiduciary duty and appraisal matter before the Delaware Court of Chancery in the case Owen vs. Lynn Cannon et al.

Ms. Austin Smith submitted an expert report and testified on behalf of the plaintiff. In the opinion issued on June 17, 2015, the Court accepted her testimony, which reaffirmed the Court’s view on tax-affecting S-corporations in the context of valuation. Chancellor Bouchard found that the fair value of the plaintiff’s shares was almost double that of the value proffered by the defendant’s expert and just below 80% of the value as determined by Ms. Austin Smith.

In its opinion, the Court identified two primary factors driving the difference in value between the two experts: 1) the correct tax rate to apply to an S-corporation and 2) the appropriate set of management projections. Ms. Austin Smith prevailed on both factors.

Brattle principal Peter Fox-Penner submitted a second expert report and testified as an energy industry expert. The Brattle team was supported by principal Torben Voetmann and senior associate Nicholas Powers.