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While there are many areas of appraisal up for debate, and actively being debated in the Delaware courts, sometimes there’s an easy one.  When a company engages in a merger, under the DGCL, the Company must timely notify shareholders of their appraisal rights if those rights exist. What a company cannot do – as its alleged the Defendant in Anurag Mehta v. Mobile Posse Inc. et al. did – is conduct a merger in secret,…
Yes – at least according to Professors Korsmo and Myers. In this piece from the HLS Forum on Corporate Governance, the Professors argue that the Aruba decision continued a trend of the Delaware Supreme Court misapplying certain modern finance concepts, starting most glaringly in Dell and DFC, and with Aruba only slowly turning the ship back towards a truer course. The Professors argue that the decision makes four errors: (1) failing to differentiate between how…
Sometimes!  Appraisal is almost always an issue for the shareholders of the target, or seller, corporation.  But, in very rare instances, the shareholders of the acquiring corporation may have appraisal rights.  Enter the 2005 case of Proctor & Gamble and Gillette.  In 2005, Procter & Gamble (P&G) announced a multibillion dollar merger with Gillette, to be consummated a stock-for-stock reverse triangular merger.  A P&G merger sub would merge into Gillette, giving P&G control of Gillette. …
A recurring topic in appraisal litigation (and merger litigation more generally) is that potential buyers, and in particular those who are most engaged with the company get a “look under the hood” that general investors do not.  But this simplistic analogy may actually understate the informational advantage of a buyer compared to the market at large.  Shareholders often are left in the dark – until a merger is announced, often as a fait accompli –…
From Deallawyers.com, observing that the decision can be read as a pretty direct rebuke to the lower Court, and focusing on the Delaware Supreme Court’s finding that the lower court decision appeared “results-oriented.” From Bloomberg Law, arguing that Aruba harms appraisal arbitrage (despite rejecting unaffected stock price), but concluding that “ . . . the court’s decision, which narrowly applied to the facts in the Aruba case, raises questions because it doesn’t settle…
“Appraisal after Dell” by Professor Guhan Subramanian has been published in the book “The Corporate Contract in Changing Times: Is the Law Keeping up?”  While the book covers a number of topics in recent corporate law, including challenges to Delaware primacy, activism, and disclosure-only settlements with respect to mergers, it also covers the oft-changing world of appraisal via Professor Subramanian’s article.  In “Appraisal after Dell” the Professor argues that Dell and other recent cases have…