In what may have an impact upon the Court’s selection of arbitrators under the Delaware Rapid Arbitration Act, the Court of Chancery considered and denied a motion to disqualify an appraiser in the case of AM General Holdings LLC v. The Renco Group, C.A. No. 7668-VCN (Del. Ch. May 29, 2015).
The basis of the motion to disqualify was based upon what Renco considered to be a conflict by virtue of the Court-appointed appraiser (Valuation Research), which was appointed in November 2014 subject to a conflicts check, previously performing work for clients of counsel to MacAndrews AMG, Paul, Weiss, Rifkind, Wharton & Garrison LLP.
In denying the motion, the Court made reference to a litany of cases applying the standard for disqualification of arbitrators either ex post or ex ante a decision being made. Here, the Court found that Renco failed to meet its burden that the alleged conflict would cast doubt on the appraiser’s impartiality, and further found that adequate disclosures by Valuation Research had been made.