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Appraisal Rights Litigation Blog

Category Archives: Record Date

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Academics Propose New Reforms for Appraisal

Posted in Appraisal Arbitrage, Appraisal-Eligible Deals, Award Premium, Dollar Amount of Appraisal Rights Filings, Interest on Appraised Value, Merger Price, Number of Appraisal Rights Filings, Record Date

We’ve posted before about the article by Professors Charles Korsmo and Minor Myers analyzing the recent surge in appraisal activity.  These co-authors have prepared a new draft article to be published in the Delaware Journal of Corporate Law, proposing reforms for appraisal litigation.  Based on their latest research the authors stand by their prior conclusion… Continue Reading

Korsmo & Myers Article Analyzing Surge in Appraisal Activity Now Published

Posted in Appraisal Arbitrage, Dollar Amount of Appraisal Rights Filings, Merger Vote, Number of Appraisal Rights Filings, Record Date

We have blogged before (see here) about a then-forthcoming law review article by Professors Charles Korsmo (Associate Professor at Brooklyn Law School) and Minor Myers (Associate Professor at Brooklyn Law School) analyzing the value-creation resulting from the increased use of appraisal arbitrage.  The authors’ paper has now been published in the final 2015 issue of… Continue Reading

Analyzing the Observed Increase in Appraisal Arbitrage

Posted in Appraisal Arbitrage, Equity Risk Premium, Interest on Appraised Value, Record Date

The July 2015 article “Appraisal Arbitrage – Is there a Delaware Advantage?” by Gaurav Jetley and Xinyu Ji of the Analysis Group analyzes the extent to which economic incentives have improved for appraisal arbitrageurs in recent years, which the authors believe helps explain the “observed increase” in appraisal activity.  The article concludes that appraisal arbitrageurs… Continue Reading

Delaware Chancery Court (Reluctantly) Dismisses Appraisal Challenge Based on Re-titled Stock Certificates

Posted in Appraisal Arbitrage, Consummation of Merger, Continuous Holder Requirement, Notice of Demand for Appraisal, Record Date

The Chancery Court granted summary judgment in favor of Dell against a number of stockholders who duly noticed their appraisal demands but whose stock certificates had been retitled before the effective date of the merger to their own custodians’ nominees. As is typical for an appraisal challenge, DTC certificated the dissenting stockholders’ shares into the… Continue Reading

A Painful Lesson in Failing to Perfect Appraisal Rights

Posted in Merger Vote, Notice of Demand for Appraisal, Record Date, Waiver of Appraisal Rights

As reported in USAToday, T. Rowe Price, the third largest shareholder in Dell, Inc., has been pursuing an appraisal case to recover more than the $13.75 per share merger price. However, it has now come to light that T. Rowe actually voted “for” the 2013 take-private deal by the company’s founder, thus threatening its ability to… Continue Reading

“Shareholder Litigation That Works”

Posted in Appraisal Arbitrage, Number of Appraisal Rights Filings, Record Date

Professors Korsmo and Myers have once again lauded the benefits of appraisal litigation and chastised its critics for pressuring the Delaware bar council to reconsider its recent decision not to limit or eliminate appraisal arbitrage.  In their latest piece, the authors reaffirm their findings that appraisal cases comprise that rare form of shareholder suit “where… Continue Reading

Deal Lawyers Lobby Delaware Bar to Reconsider Its Refusal to Limit or Eliminate Appraisal Arbitrage

Posted in Appraisal Arbitrage, Number of Appraisal Rights Filings, Record Date

As we’ve previously posted, the Corporation Council of the Delaware bar had taken up the question of whether to ban or curtail appraisal arbitrage, and more recently decided to take no such action after determining that the practice had no discernable negative effects on mergers and acquisitions and, if anything, continued to protect shareholder value. … Continue Reading

Delaware Bar Finds That Appraisal Remedy Protects Investors

Posted in Appraisal Arbitrage, Number of Appraisal Rights Filings, Record Date

We posted earlier this week regarding a white paper written by the Council of the Corporation Law Section of the Delaware state bar, which was issued alongside the Council’s proposed amendments to Delaware’s appraisal statute.  The Council had considered amendments to address the practice of appraisal arbitrage, but ultimately did not make any recommendations to eliminate… Continue Reading

Delaware Bar Committee Decides Not to Eliminate or Limit Appraisal Arbitrage

Posted in Appraisal Arbitrage, Number of Appraisal Rights Filings, Record Date

We posted last week about new legislative amendments to the appraisal remedy proposed by the Council of the Corporation Law Section of the Delaware state bar association, an influential group of Delaware lawyers.  The amendments were accompanied by an explanatory white paper explaining the rationale behind those recommendations that the Council made, and of note,… Continue Reading

Delaware Bar Committee Introduces Proposed Legislative Amendments to Appraisal Remedy

Posted in Appraisal Arbitrage, Dollar Amount of Appraisal Rights Filings, Interest on Appraised Value, Number of Appraisal Rights Filings, Record Date

The Corporation Council of the Delaware bar released proposed amendments to Delaware’s General Corporation Law last week.  Among the various proposals, ranging from fee-shift provisions to forum-selection clauses in corporate bylaws, the committee proposed two changes to Delaware’s statutory appraisal remedy: first, to bar appraisals by shareholders holding 1% or less of the outstanding stock of… Continue Reading

Lawyers Who Lost Ancestry.com Ruling Call for Legislative Reform of the Appraisal Rights Statute

Posted in Appraisal Arbitrage, Merger Vote, Record Date

We recently posted about the two related January 5, 2015 arbitrage decisions, in which the Delaware Chancery Court refused to impose share-tracing requirements or other obligations on beneficial stockholders and reaffirmed that only record owners bear the burden to no-vote their shares and otherwise perfect their appraisal rights. This week the lawyers defending Ancestry.com, whose… Continue Reading

Delaware Chancery Reaffirms Appraisal Arbitrage Strategy

Posted in Appraisal Arbitrage, Fair Value, Merger Vote, Notice of Demand for Appraisal, Record Date

In two separate rulings on January 5, 2015 — In re Appraisal of Ancestry.com., Inc., and Merion Capital LP v. BMC Software, Inc., both by Vice Chancellor Glasscock — the Delaware Chancery Court reaffirmed the legitimacy of the appraisal arbitrage strategy and refused to impose share-tracing requirements or other obligations on the beneficial stockholder, continuing… Continue Reading

Forthcoming Law Review Article Lauds Value Creation Resulting from Surge in Appraisal Activity Due to Increased Use of Arbitrage

Posted in Appraisal Arbitrage, Merger Vote, Record Date

In a forthcoming law review article expected to be published in 2015 in the Washington University Law Review, “Appraisal Arbitrage and the Future of Public Company M&A,” Charles Korsmo (Associate Professor at Brooklyn Law School) and Minor Myers (Associate Professor at Brooklyn Law School) report their findings showing a large uptick in the number of… Continue Reading

Are There Arbitrage Opportunities With Appraisal Rights?

Posted in Appraisal Arbitrage, Merger Vote, Notice of Demand for Appraisal, Record Date

An interesting question first addressed many years ago has just resurfaced: can a shareholder seek appraisal rights for shares it acquires after the merger is announced and even after the record date that is set for voting on whether to approve the proposed M&A transaction? Historically the Delaware court said yes, subject to certain other… Continue Reading