Samvit Ramadurgam v. Destiny XYZ Inc.
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Background
Gibson Dunn & Crutcher LLP retained BRG on behalf of a cofounder of an investment company being squeezed out of the company. The engagement involved evaluating the fairness of the transaction price by critiquing the defendant’s valuation and developing an independent valuation.
Our Approach
Eric Madsen served as the plaintiff’s testifying valuation expert. His analysis identified significant flaws in the defendant’s valuation, including treatment of the company’s announced share giveaway and the valuation of its SAFEs (simple agreements for future equity).
Outcome
The Delaware Chancery Court ruled in the plaintiff’s favor, finding the squeeze-out unfair and the transaction price materially understated. The court imposed a constructive trust that effectively restored the value of the plaintiff’s approximately one-third ownership interest in the company, which controls an investment fund with a public market capitalization of approximately $700 million. The opinion also credited Mr. Madsen’s analysis, stating that it “usefully identified the value drivers that the [defendant’s valuation] report discounted or missed.”
BRG Team
Eric Madsen, Megan Jack, Quinn Burnett, Kimiko Hayashi
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