Delaware Chancery Court Once Again Defers to Merger Price in Appraisal Proceeding (Part 1)

Under Delaware law, stockholders of a corporation acquired in certain mergers or consolidations who satisfy applicable statutory requirements are entitled to an appraisal by the chancery court of the "fair value" of their stock in the acquired company. Because an appraisal petitioner need not own the appraised stock at the time a merger agreement is signed, and because of the above-market interest generally available under the appraisal statute, opportunistic hedge funds in recent years have increasingly used appraisal as an investment strategy, buying large numbers of shares in target corporations after the announcement of mergers for the sole purpose of pursuing appraisal. As a result, there has been a marked upsurge in appraisal litigation of late.

Click here to read Part 2 of this article published on March 22, 2017.

About Potter Anderson

Potter Anderson & Corroon LLP is one of the largest and most highly regarded Delaware law firms, providing legal services to regional, national, and international clients. With more than 100 attorneys, the firm centers its practice on corporate and alternative entity law and litigation, commercial litigation, bankruptcy, intellectual property, labor and employment, and real estate.