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Appraisal Rights Litigation Blog

Category Archives: Market-out Exception

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Does the Appraisal Remedy Discipline Corporate Management?

Posted in Appraisal Arbitrage, Appraisal-Eligible Deals, Distinct from Fiduciary Duty Claims, Entitlement to Appraisal, Market-out Exception, Merger Price, No Proof of Wrongdoing Needed

In a March 2016 working paper, Corporate Darwinism: Disciplining Managers in a World With Weak Shareholder Litigation, Professors James D. Cox and Randall S. Thomas detail several recent legislative and judicial actions that potentially restrict the efficacy of shareholder acquisition-oriented class actions to control corporate managerial agency costs. The authors then discuss new corporate governance… Continue Reading

The Market-Out Exception: Delaware’s Unique Twist on a Commonly Used Anti-Appraisal Device

Posted in Appraisal-Eligible Deals, Arizona Appraisal Rights, Fair Value, Market-out Exception, Massachusetts Appraisal Rights, Stock Market Price

The so-called market-out exception precludes appraisal where the target’s stock trades in a highly liquid market.  In other words, appraisal is normally available to shareholders except, as the rationale goes, where the M&A target’s stock trades in such a liquid, highly efficient market that its stock price naturally reflects its fair value, and any M&A… Continue Reading

Can Appraisal Rights Be Available in an All-Stock Deal?

Posted in All-Stock Deal, Appraisal-Eligible Deals, Market-out Exception

A frequently asked question involves the availability of appraisal rights when investors are being offered only stock in the acquiring corporation in exchange for their shares. The answer is typically no.  The Delaware appraisal statute provides that appraisal rights are available in a wide range of statutorily permitted mergers.  8 Del. C. § 262(b).  However,… Continue Reading