Business Law Today previously posted this piece discussing key Delaware General Corporate Law differences between merger, conversions and domestications. A sometimes forgotten reason for a merger or other major corporate action is to change the jurisdiction of incorporation and thus, usually, the regulatory or tax regime associated with it. Mergers effectuated even for this purpose may carry appraisal rights if they trigger DGCL 262. But a merger is not the only way of changing jurisdictions, as the article notes. Conversions and domestications offer an alternative path to the same result.
And why no appraisal rights, even when such a change may be very significant and of interest to a minority shareholder? Perhaps because, as we have covered before, the history of appraisal was an outgrowth of the death of unanimous consent provisions. But conversions and domestications, under the DGCL still require unanimous stockholder consent – making an appraisal concept superfluous.
For completeness, its worth noting that this piece discusses the rights associated with Delaware law; an interested party would be advised to also check the law of the jurisdiction the company is entering (or leaving) if not Delaware. As we’ve seen before, surprising appraisal rules remain in some places.