The disparity in value was attributable to the differing treatment of a million liquidation preference in favor of the holders of Orchard preferred stock.
Under the company’s Certificate of Designations, a liquidation preference would be owed to the holders of Orchard preferred stock upon (i) a liquidation, (ii) a sale or exclusive license of all or substantially all of the company’s assets leading to liquidation, or (iii) a sale of control of the company to an unrelated third party.
The dividend structure usually has rights attached to it, such as whether the shares participate in enterprise earnings.
were cashed out by Orchard’s controlling stockholder, Dimensional Associates, LLC.
That is the purpose of this simple website—to learn something and grow. Book Value Per Share for Preferred Stock: Note: When you attempt to compute the ‘Liquidation Value of Preferred Stock’, you should realize that some companies have preferred stock issues outstanding that give the right to significant liquidation premiums, which may substantially exceed the par value of such shares.
Through this post I am going to show you how to compute book vale per share of companies, step-by-step. First of all, you probably knew already that there are two types of share in a company, they are: (1) preferred stock; and (2) common stock. The effect of such liquidation premiums on the book value of common stock can be quite material. Here are Lie Dharma Putra’s financial information: Back to the formula.
The court in this case issued its post-trial decision in an appraisal arising out of a merger where the common stockholders of The Orchard Enterprises, Inc.
The court’s opinion clarifies, but has also created some uncertainty around, how liquidation preferences of preferred stock affect such appraisals, and has led many to question previous assumptions about how liquidation preferences are to be factored into appraisal values.
Terms of the preferred stock are described in the articles of association.