The Supreme Court has ordered extensive disclosure in a case where shareholders had asked for appraisal of their shares following Argo Group’s take-private deal.

The move reaffirms that in Bermuda, dissenting investors can seek a judicial appraisal of fair value following a merger.

In a ruling issued last week by the Commercial Court, Puisne Judge Shade Subair Williams rejected Argo’s proposed limits on disclosure and approved a broad discovery order — including internal board materials and a five-year review period — for the appraisal proceedings.

In November 2023, Brookfield Reinsurance made a deal to acquire Argo in a $1.1 billion all-cash transaction, which was approved by shareholders.

Afterwards, several dissenting investors exercised their right to ask the court to appraise their shares.

The court recorded that shareholders dissenting to the decision should be entitled to seek a broad record when challenging the fair value of their shares.

“The plaintiffs invite this court to hand down a ruling which recognises a standard approach to discovery in fair share valuation cases brought under s. 106(6) of the CA 1981,” the judgment read, setting out the plaintiffs’ position. “They encourage this court to endorse directions which recognise a broad duty on a company in share valuation cases to make full discovery of all relevant documents in its possession, custody or power.”

The court approved a five-year lookback period for disclosure, rejecting arguments that discovery should only include the two years before the valuation date.

The ruling pointed to concerns that shorter periods may distort the analysis of the shares’ value, particularly for insurance companies.

“The shorter lookback period put forward by the company of April 2021 to April 2023 clearly sits in the Covid-19 period,” the ruling noted in summarising the plaintiffs’ valuation expert, warning that reliance on that time frame could “provide an unreliable picture of the business’s actual longer-term potential”.

The ruling reflects Bermuda courts’ continued reliance on Cayman Islands jurisprudence in appraisal actions.