When an insured is pursuing a representation and warranty insurance (“RWI”) claim, a critical consideration is whether diminution in value damages (“DIV Damages”) can be asserted as Loss covered by the RWI policy.[1] This article, being published in four parts, discusses Delaware M&A damages law regarding DIV Damages and describes how an insured can pursue them as part of an RWI claim.
This is Part II of this article; it addresses the evolution of cases involving DIV Damages calculated using a discounted cash flow methodology (“DCF Methodology”) under Delaware M&A damages law. Part I of this article addressed (i) the principal differences between DIV Damages calculated using a multiple of EBITDA methodology (“MOE Methodology”) and DIV Damages calculated using a DCF Methodology and (ii) the evolution of cases involving DIV Damages calculated using an MOE Methodology under Delaware M&A damages law.
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©2025. Published in Business Law Today, July 16, 2025, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.