Appraisal Rights Litigation Blog

Appraisal rights can offer investors critical protections against corporate actions that do not provide shareholders fair value. Investors often recognize this – as we recently posted, proxy voting guidelines suggest investors vote in favor of appraisal. And then there are the Corporate Governance Principles [.pdf] of the Los Angeles County Employees Retirement Association (LACERA), which list appraisal rights as one of the corporate structures that LACERA finds important in companies it invest in, writing…
Like most states, Maryland law affords certain protections to minority stockholders, including “objecting stockholder rights” (also known as “appraisal rights” or “dissenter rights” in other jurisdictions) under the Maryland General Corporation Law (“MGCL”) pursuant to §§ 3-201 et seq.  However, unique to Maryland is the ability for a Maryland corporation to eliminate a stockholder’s appraisal rights by charter provision under MGCL § 3-202(c)(4). One might ask: Why would a stockholder ever invest in a corporation…
The Taft-Hartley Proxy Voting Guidelines for 2019 have been released by Institutional Shareholder Services. The guidelines, which many institutional investors follow, suggest that shareholders vote “for proposals to restore or provide shareholders with the right of appraisal.” As we’ve covered before, there is meaningful academic work tying the existence of, and exercise of appraisal rights, to increased value for shareholders, and that is in line with the proxy guidelines suggestion.…
Law professors who filed an amicus brief in support of petitioners in the Aruba case have provided a useful summary of their arguments in this blog post from the Harvard Law Corporate Governance Forum. With market efficiency issues increasingly intersecting with more traditional valuation and process issues in appraisal cases, this amicus could be particularly relevant to the Delaware Supreme Court as it considers the Aruba appeal. For more on Aruba, see our multiple posts
On March 27, 2019, at 10 a.m., the Delaware Supreme Court will hold argument in the Aruba Networks appraisal case. We’ve covered the Aruba decision before, along with some of the impact the case has had on the appraisal landscape. Little doubt the argument before the Delaware Supreme Court will be enlightening to anyone interested in appraisal; we’ll have a further update after the argument.…
The vast majority of publicly announced mergers are approved by shareholders, certainly more than 90% no matter how you reasonably slice the data.  One way to view this data is that shareholder votes are perfunctory rubber stamps; but another is to view the merger process as self-selecting – a publicly announced merger is one that acquirer and target believe will receive shareholder approval.  In the latter case, the threat of failure is the motivating factor…
No. At least according to Vice Chancellor Slights III in the case In re Xura, Inc. Stockholder Litigation, C.A. No. 12698-VCS (Del. Ch. Dec. 11, 2018).  While it is true that in many circumstances appraisal is the exclusive remedy… not always! Xura highlights that the facts of each case matter and that an investor needs to think about the full suite of their potential claims and options in any merger dispute. For more on Xura,…
In 2017, Rwanda amended its companies act and introduced appraisal rights for minority shareholders [.pdf].  A recent article in the New Times provides an overview of, and reflects on, the efficacy of Rwandan appraisal.  The parallels between Rwandan appraisal (as described in the links provided) and Delaware appraisal are notable: appraisal is offered to dissenting shareholders who would otherwise be forced to accept certain major corporate actions (such as a merger); the dissenting shareholder must…
Probably not.  But this interesting analysis on the possibility of crypto asset mergers certainly allows for the possibility. We’ve covered blockchain and appraisal before, including the possibility of having shares put onto a blockchain, allowing for easier tracing, counting, voting, and other improvements over the current system of fungible bulk; but this is something different.  If one crypto asset (one blockchain community effectively) ‘merges’ with another, it could be a rule of the crypto asset…