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Appraisal Rights Litigation Blog

Appraisal Amendments to Become Effective on August 1

Posted in Dollar Amount of Appraisal Rights Filings, Interest on Appraised Value, Prepayment of Merger Consideration, Short-Form Merger

Now that the amendments to the Delaware appraisal statute have been signed into law, the new provisions will apply to all M&A agreements entered into on or after August 1.  Here is a link to the rule as revised, showing the new terms (only Sections 8-11 relate to appraisal).  As we have posted previously, the statute, as amended, now (i) sets a floor for appraisal proceedings based on the quantum or dollar size of shareholdings and (ii) permits M&A targets to prepay dissenters in an amount of their choosing to halt the interest clock on the amount prepaid.  As we’ve observed before, investors may welcome the opportunity to redeploy any such prepayments to the next appraisal case, thus indirectly solving the liquidity problem that has prevented some shareholders from exercising appraisal in the first place.