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"Management meetings" cannot be used in evidence - welcome clarity in fair value proceedings

In the recent Cayman Islands case of In the matter of Trina Solar Limited (25 July 2017) the Honourable Justice Nick Segal, was asked to grant an order directing that a meeting take place between members of the Company’s management team and the valuation experts known as a “management meeting”, so that the expert could obtain information for his report as to the fair value of the shares of the Company.

It was held that:

1. A management meeting could only take place if careful safeguards were in place, namely that: (a) The meeting, like an experts’ meeting, is to be treated as a without prejudice meeting and is to be convened for the purpose of assisting the experts to understand the evidence filed and matters relevant to their valuation; (b) Nothing said in the meeting will be admissible as evidence (unless the parties agree to waive the without prejudice privilege).

2. The Court had particular regard to the rule that a company cannot be a witness or be compelled to give evidence by a proper officer or agent. To ensure the integrity of this well established rule it was necessary that neither the Company, nor its management was being required to give evidence at the meeting.

The decision as to this issue provides welcome clarity to the status and admissibility of management meetings and ensures robust case management. It was also held that:-

3. Dissenting shareholders were not required to give discovery under the Grand Court Rules.  This is because information relating to the dissenting shareholders' investment in the Company, third party valuation reports and the dissenting shareholders’ internal analyses were not relevant to the determination of fair value of a publicly listed company's shares.

 

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