Cayman firm Collas Crill has posted this informative analysis of a recent Cayman Grand Court (the first instance court in the Cayman Islands) decision involving questions of discovery and procedure in Cayman appraisal (sometimes known as “fair value” proceedings or dissenters’ rights proceedings). Per Collas Crill, the Grand Court refused to reinvent the wheel when it came to Cayman appraisal, and rejected attempts by the respondent-company to broaden dissenter-side appraisal discovery in Cayman, while reinforcing that dissenters need, and are entitled to significant discovery to provide their fair value analysis.
As Collas Crill summarizes, “the decision is important because it reinforces that the unique procedural features of s.238 litigation are crucial mechanisms to address the significant informational disadvantages faced by dissenters and their experts, and to ensure that the court has all the evidence necessary to properly determine fair value. The Ruling is another reminder that the court will be skeptical of attempts by companies to limit or restrict the information they are required to provide the dissenters and the experts. Another important feature of the Ruling is the court’s reinforcement of previous decisions which held that it will not discriminate between different types of shareholders, and the court is not concerned with what motivated a dissenter to purchase shares.”
Readers of this blog may know that Cayman appraisal and Delaware appraisal differ in their discovery burdens, as depositions in Cayman are rare to unheard of, and dissenter-focused discovery in Cayman is generally much narrower (insofar as it occurs at all) than in the process followed by many US states.