Reference no: EM131389759
In early 1984, Royal Dutch Petroleum Company (Royal Dutch), through various subsidiaries, controlled approximately 70 percent of the outstanding common shares of Shell Oil Co. (Shell).
On January 24, 1984, Royal Dutch announced its intention to merge Shell into SPNV Holdings, Inc. (Holdings), which is now Shell Petroleum, Inc., by offering the minority shareholders $55 per share. Shell's board of directors, however, rejected the offer as inadequate. Royal Dutch then withdrew the merger proposal and initiated a tender offer at $58 per share.
As a result of the tender offer, Holdings' ownership interest increased to 94.6 percent of Shell's outstanding stock. Holdings then initiated a short-form merger. Under the terms of the merger, Shell's minority stockholders were to receive $58 per share. However, if before July 1, 1985, a shareholder waived his right to seek an appraisal, he would receive an extra $2 per share. In conjunction with the short-form merger, Holdings distributed several documents to the minority, including a document entitled ‘‘Certain Information About Shell'' (CIAS).
The CIAS included a table of discounted future net cash flows (DCF) for Shell's oil and gas reserves. However, due to a computer programming error, the DCF failed to account for the cash flows from approximately 295 million barrel equivalents of U.S. proved oil and gas reserves. Shell's failure to include the reserves in its calculations resulted in an understatement of its DCF of approximately $993 million to $1.1 billion or $3.00 to $3.45 per share.
Moreover, as a result of the error, Shell stated in the CIAS that there had been a slight decline in the value of its oil and gas reserves from 1984 to 1985.
When properly calculated, the value of the reserves had actually increased over that time period. Shell's minority shareholders sued in the Court of Chancery, asserting that the error in the DCF along with other alleged disclosure violations constituted a breach of Holdings' fiduciary ‘‘duty of candor.'' Was the error in the DCF material and misleading?
|
Create a new product that would appeal to your market
: Product topic research on is: iPhone (Apple) Include: references with website page please. 1) Create a new product that would appeal to your market.
|
|
Which strategies do you think are the most successful
: Compare Super Bowl ads over the last few years. Discuss what types of strategies were used. Have the strategies changed over time? If so, why do you think they have? If not, why not? Which strategies do you think are the most successful?
|
|
Are the shareholders correct in given contention
: The shareholders argued that the market value should not be considered because McDonough controlled 70 percent of Endicott's stock and the stock had been delisted from the New York Stock Exchange. Are the shareholders correct?
|
|
Justifications for their theory
: Supply side theorists claimed all of the following justifications for their theory, except:
|
|
Was the error in the dcf material and misleading
: Shell's minority shareholders sued in the Court of Chancery, asserting that the error in the DCF along with other alleged disclosure violations constituted a breach of Holdings' fiduciary ‘‘duty of candor.'' Was the error in the DCF material and m..
|
|
Corporate social responsibility or sustainability practices
: Milton Friedman stated in his famous article in the New York Times in 1970 that “the social responsibility of business is to increase profits.” Do you agree? If not, do you prefer that multinational corporations adopt a focus on corporate social resp..
|
|
Discuss about the justice legal opinions
: Based on your current understanding of the U.S. Supreme Court and its justices, do you believe that the political predispositions of justices affect their legal opinions? Why or why not?Should the personal, political viewpoints of U.S. Supreme Cour..
|
|
Jabong value proposition to its customers and suppliers
: What is Jabong's value proposition to its customers and suppliers? Is there an inherent contradiction? How does (or how can) Jabong resolve that?
|
|
What is the responsibility of the internal auditor
: What is the responsibility of the internal auditor with respect to fraud? Which of the following organizational policies most effectively prevents such an occurrence?
|