Delaware Court of Chancery Clarifies Appraisal Rights of Beneficial Owners Acquiring Shares Post-Record Date

The Delaware Court of Chancery has ruled that, for purposes of perfecting appraisal rights, a beneficial owner of stock, held of record by a nominee, that acquires its interest after the record date set for a merger need not establish whether such shares may have been voted at the direction of a prior beneficial owner. In re Appraisal of Transkaryotic Therapies, Inc., C.A. No 1554-CC (Del. Ch. May 2, 2007).  The decision may result in an increase in the number of appraisal actions filed by hedge and other investment funds, which often purchase shares following the announcement of a deal.

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