A class of minority shareholders in a US technology company filed suit in the Delaware Chancery Court to contest the merger price at which its shares were acquired by the majority shareholder, a European multinational corporation.
Central to the dispute was the contention that the European parent company used transfer pricing to tunnel profits of the US subsidiary to itself via management fees and trademark royalties to reduce retained earnings and decrease projected free cash flows.
Rebel Curd was engaged as an expert witness by counsel representing the class of minority shareholders to opine on the reasonableness of the transfer pricing policies adopted by the majority shareholder. Ms. Curd submitted an expert report and a rebuttal report focused on the duplicative nature of many services covered by the management fees and the absence of benefit by the US corporation from the license to a heretofore unknown trademark in the US market. The matter settled before trial, resulting in a premium of almost 250% over the merger price for the class of minority shareholders.
Rebel Curd was supported in this engagement by Robin Hart and Killian Maloney.
