Appraisal Rights Litigation Blog

Appraisal cases increasingly focus on how markets react to merger news and what one learns from that.  Recent cases that have looked to “unaffected” merger price – that is, the price of a share of the target company before the merger announcement – in part because of the fundamental truth that mergers are market moving events. So are the breakup of mergers. The case of Fresenius and Akorn, pending before Vice Chancellor Travis Laster, while…
Appraisal rights are creatures of statute, and as a result, for the most part, the conditions for appraisal are laid out by the legislature. Many statutes provide for appraisal rights in instances where there is a “merger” – what one might traditionally understand as an entity purchasing another entity, or purchasing all the stock of another entity. But merger-esque corporate actions can come in numerous flavors and types, and not all of them will carry
Not really, and definitely not in the way Delaware does, at least according to this 2013 analysis. Hong Kong lacks a general appraisal remedy; instead, at least for public companies, the takeover must be evaluated by an independent advisor and those finding made available to shareholders. Considering Canadian and Cayman Islands appraisal rules, we see great diversity across appraisal regimes worldwide, even among jurisdictions that have a common legal-ancestor (English common law). **Lowenstein Sandler…
Appraisal sits in a somewhat odd area between what is traditionally understood as ‘class’ litigation – i.e., when a person or persons seeks to represent an entire group of all ‘similarly situated’ persons.  This is the model of the vast majority of securities litigation, consumer fraud litigation, mass tort, and other claims.  The benefit to the representative-plaintiff is that the potential damages are aggregated, even where a single persons damages would be minuscule and not…
While some of the largest businesses in the United States are corporations (i.e., incorporated entities under a state’s corporations law), many businesses today are also formed as Limited Liability Companies, LLCs for short. An LLC is a creature of state statute; Delaware, California, Florida (among many other states) have LLC statutes allowing for the creation of this often modular business form. LLCs have “members” who own interests in the LLC. Do members have appraisal rights?…
In “Appraisal Arbitrage: In Case of Emergency, Break Glass” – a student note published in the Notre Dame Law Review (93 Notre Dame L. Rev. 2191) – the author lays out a case for why appraisal, including appraisal arbitrage, remains critical to the overall scheme of shareholder protection. As the author observes, many a critique of appraisal focus on the “who” of recent appraisal cases, focusing their attention on the appraisal arbitrage strategy and…
The Review of Securities & Commodities Regulation recently published “The Shift in Delaware Appraisal Litigation” (full article $$$), suggesting, as have other authors, that Delaware appraisal has moved to a realm where process questions are central to the appraisal analysis. This will be little surprise to readers of this blog; while appraisal is distinct from fiduciary claims, recent cases have focused increasingly on a search for process issues, and the absence of issues with…
Probably – at least according to this analysis posted on the Harvard Corporate Governance Forum.  The analysis provides extensive discussion of Norcraft and Solera**, two recent decisions we’ve also noted. The authors conclusion will be familiar to regular readers of this blog: “appraisal decisions likely will continue to focus on many of the same issues that courts examine when considering breach of fiduciary duty claims in the merger context as well as assessing whether…
State legislature somewhat regularly make amendments and updates to their corporate laws, including laws regarding appraisal.  We’ve covered Delaware updates before, including the 2018 and 2016 amendments. North Carolina, another state with appraisal rights, made updates to its appraisal laws as well this year.  Senate Bill 622, signed into law in June, took effect as of October 1. North Carolina’s amendment extends appraisal rights to non-voting shares of a corporation, which is a change that…
Earlier this year, a Florida appeals court adopted the Trulia decision from Delaware – In re Trulia, Inc. Stockholder Litigation, 129 A.3d 884 (Del. Ch. 2016) being a key Delaware case regarding the approval of merger related class action settlements. Before Trulia, class actions challenging mergers could (and often did) resolve via something called a “disclosure only settlement” – that is, the target company resolved the class action by making additional disclosures related to the…