## Facts

- EMS Corp. was a holding company whose control was contested among stockholders and insiders; the dispute centered on warrants originally held by Banker’s Trust (the BT Warrants) later acquired by Edward M. Miller.
- Prior proceedings (not revisited on remand) found Miller’s acquisition of the BT Warrants resulted from a usurpation of a corporate opportunity belonging to EMS and Citicorp Venture Capital, Ltd. (CVC), and was part of a broader scheme involving deceptive tactics and misuse of EMS information.
- An EMS director and president worked with Miller to steer the BT Warrants to Miller while purportedly acting for EMS in discussions concerning the warrants.
- The Delaware Supreme Court remanded with instructions to determine the price at which EMS or CVC could have purchased the BT Warrants in 1998.
- On remand, the Court of Chancery treated historical transaction pricing as unreliable because the sale environment was distorted by Miller’s wrongful conduct, requiring a hypothetical valuation of fair market value as of 1998.
- The parties presented competing expert valuations:
  - Defendants’ expert applied comparable-company multiples (revenue, EBIT, and EBITDA) and produced a per-warrant-share value around $41.02.
  - Plaintiffs’ expert relied heavily on discounted cash flow, but used management discussions and projections developed after the agreed valuation date, raising concerns about hindsight.

## Issues

1. What was the fair market price at which EMS or CVC could have purchased the BT Warrants in 1998, assuming a market not distorted by Miller’s usurpation and related misconduct?
2. Which valuation methods and inputs were appropriate as of the 1998 valuation date, and how should the court treat post-date information and other potentially unreliable assumptions?

## Decision

- The Court of Chancery determined the relevant measure was the BT Warrants’ 1998 fair market value derived from standard valuation techniques, not the price produced by the tainted transaction in which Miller acquired them.
- The court evaluated both sides’ expert work, rejecting hindsight-driven inputs and scrutinizing assumptions, projections, and comparables.
- The court did not adopt either expert’s valuation wholesale; it reached an independent, judicially determined hypothetical price to implement the equitable remedy for the usurped corporate opportunity.

## Legal Principles

- When wrongdoing distorts an acquisition process, equity may require valuation based on a hypothetical untainted market rather than reliance on the actual transaction price.
- In a corporate-opportunity remedy, the court may determine the price the corporation (or the beneficiary) reasonably would have paid absent the breach, using fair market valuation as of the relevant date.
- Standard valuation techniques, including discounted cash flow and market-multiple approaches, may be used, but inputs must be anchored to information available at the valuation date and should exclude hindsight.
- The Court of Chancery may weigh expert testimony selectively and make an independent valuation when expert analyses reflect unreliable assumptions or methodological flaws.

## Conclusion

On remand, the Court of Chancery valued the BT Warrants as of 1998 by constructing a fair market, untainted hypothetical purchase price using standard valuation methods, declining to treat Miller’s tainted acquisition price or either party’s expert figure as determinative.


Agranoff v. Miller, 791 A.2d 880 (Del. Ch. 2001)