Valuation of Damage Claims: An Application of Corporate Finance

Michel, Allen; Shaked, Israel

doi:10.1111/j.1468-5957.1992.tb00636.x

Cited by 5 publications

(2 citation statements)

References 10 publications

(4 reference statements)

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“…Judges are frequently asked to assess asset values in bankruptcy, M&A, securities, tax and other litigation (LeClair, 1990; Michel and Shaked, 1992; Beatty et al, 1999; and Sharfman, 2003). Because judicial valuation determines the shareholders' terminal payoffs, it not only affects share values, but it also affects how shareholders behave in anticipation of shareholder litigation.…”

Section: Introductionmentioning

confidence: 99%

Robustness of Judicial Decisions to Valuation‐Method Innovation: An Exploratory Empirical Study

Chen

Yee²,

Yoo

2010

Business Fin & Account

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Section: Introductionmentioning

confidence: 99%

Robustness of Judicial Decisions to Valuation‐Method Innovation: An Exploratory Empirical Study

Chen

Yee²,

Yoo

2010

Business Fin & Account

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“…As small business valuation is challenging and often subjective (Ang, 1992; Koeplin, Sarin, & Shapiro, 2000), minority shareholders could benefit from the assistance of a valuation expert because convincing valuation estimates are hard to produce (Michel & Shaked, 1992). Yet, it is not always clear whether hiring an expert is worthwhile because investors can use the same information as the experts do and could draw the same conclusion on the private firm's value (Elnathan et al., 2010).…”

Section: Introductionmentioning

confidence: 99%

Does a leopard change its spots? Auditors and lawyers as valuation experts for minority shareholders in the judicial appraisal of private firms

Saastamoinen

Savolainen

2020

Business Fin & Account

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Agency theory suggests that minority shareholders in private firms are vulnerable to shareholder oppression, which necessitates shareholder protection. This paper investigates a form of shareholder protection, the special representative of minority shareholders, which is used in Finland and Sweden. The special representative is a valuation expert, typically an auditor or a lawyer, who assists minority shareholders in shareholder dissent cases which require judicial appraisal of the minority interest in a firm. The different codes of conduct associated with these professions may manifest themselves in their performance as valuation experts. We examine a comprehensive data set of judicial valuation cases of Finnish private firms, in which the judge learns the valuation estimates of the controlling shareholder, the minority shareholder and the special representative and then issues a verdict on the fair price of the firm's shares.Our findings indicate that the special representative benefits minority shareholders by reducing the gap between the minority shareholders' and the judge's valuation estimates. Our results also suggest that the special representative's professional background may affect how he or she values the company. We find that special representatives who are auditors propose more conservative valuation estimates than lawyers do.

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Cost of Capital

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Valuation of Damage Claims: An Application of Corporate Finance

Cited by 5 publications

References 10 publications

Robustness of Judicial Decisions to Valuation‐Method Innovation: An Exploratory Empirical Study

Robustness of Judicial Decisions to Valuation‐Method Innovation: An Exploratory Empirical Study

Does a leopard change its spots? Auditors and lawyers as valuation experts for minority shareholders in the judicial appraisal of private firms

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