Delaware’s Supreme Court will soon decide if lower courts properly determined that both Dell Inc.’s $24.9 billion management-led buyout and DFC Global Corp.’s $1.3 billion buyout were priced too low, potentially leading more companies to try appraisal litigation as an investment strategy.

In the Dell case, the state’s Chancery Court had added roughly $7 billion to founder Michael Dell and private equity firm Silver Lake Partners’ purchase price, while the DFC case saw the court add about $100 million to Lone Star Fund VIII’s purchase price.

“Over the years there has been greater certainty in the way courts looked at appraisal actions in terms of valuation methodologies. The outcomes become more predictable,” said David Margules, a partner at Ballard Spahr LLP. “Clearly the predictability of the outcome is critical to any investment strategy.”

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