The entertainment company that holds the rights to “American Idol” and other television programs involved in litigation over a possible acquisition cannot order the challenging shareholder to accept the undisputed portion of its potential purchase price, the Delaware Court of Chancery has ruled. The court held the company did not meet the “good cause” standard necessary to order the stock owner to agree to a partial sales price, thereby stopping the entertainment company’s accrual of interest.
Vice Chancellor Sam Glasscock III issued the letter opinion in Huff Fund Investment Partnership v. CKx. The case made headlines last year when Glasscock broke from the court’s tradition of using discounted cash flow to determine a company’s value. He ruled that entertainment conglomerate CKx Inc.’s $509 million sale price was the most relevant evaluation because no comparable transactions or reliable cash-flow projections exist.
