Litigation support: the case of Infratil versus Natural Gas Corporation

Description

Litigation support: the case of Infratil versus Natural Gas Corporation: Abstract

Litigation support: the case of Infratil versus Natural Gas Corporation is a case study by David Emanuel.

This case requires input into an arbitration where the arbitrator is required to determine a « fair and reasonable price » when a shareholder voted against a major transaction and the majority voted in favour. This gave the shareholder the right to be bought out at a « fair and reasonable price ».

Teaching objectives

• The notion of capital market efficiency and its importance as a basis for using a share price-oriented analysis to determine a “fair and reasonable price,” or in any dispute resolution
• Issues of liquidity (the pricing of liquidity, discounts on sales of blocks of shares, and the practical measurement of liquidity)
• Rights issues versus private placements
• Measurement of “abnormal” returns or price changes
• The relevant date(s) for determining the “fair and reasonable price” or the period over which “abnormal” price changes are computed
• Some technical issues associated with cash flows (dividends and new investments) affecting shareholders over the relevant period
• The relevance of alternative approaches to determine a “fair and reasonable price,” for example, discounted cash flow approaches

Additional information

Teaching notes are available for teachers only. Contact the HEC Montréal Case Centre for more information.