The National Law Review has covered Mobile Posse, a case we’ve posted on before. The NLR analysis describes the Mobile Posse decision, writing:
“The Court denied all but one of defendants’ motions, finding numerous deficiencies in the notice process and finding that the merger was not entirely fair.”
“The Court was not persuaded that a supplemental notice could serve as a replicated remedy, and in any event, the supplemental notice contained incorrect and internally inconsistent instructions. The supplemental notice provided stockholders with an incorrect time period for submitting their demand for appraisal, and it also provided the stockholders with the wrong procedures for enforcing their appraisal rights.”
Mobile Posse highlights an important aspect of Delaware appraisal rights, different from many other types of claims. Whereas an (alleged) tortfeasor is obviously under no duty (usually) to inform others of their potential claims, appraisal is not a tort remedy, but a statutory right. For appraisal, one can view it as: shareholder have the right to a fair notice that gives them the information they need to make an informed decision. Setting aside debates about what information the shareholder needs, shareholder certainly have the right to a correct notice – and it can create issues if the company fails to provide one.