Kramer Levin Naftalis & Frankel LLP posted on Lexology [$$$] about the availability of so-called drag-along rights in private equity deals, which would require minority shareholders to waive rights to appraisal or otherwise challenge controlling shareholder transactions. According to the post, these drag-along rights have become standard fare in stockholder or similar agreements for controlling
In its recent blog post, VentureCaseLaw covers a 2015 Delaware decision and how Delaware law deals with appraisal in instances where a Company has drag-along rights. In summary:
Venture-backed companies should not assume an implied waiver of minority appraisal rights in a merger that utilizes a voting agreement’s drag-along rights if procedural requirements are
As we have posted previously, whether a voting agreement, or so-called drag-along provision, can be successfully enforced to prevent common stockholders from seeking appraisal is an open question in the Delaware courts. And so it remains, even in the wake of Halpin v. Riverstone National, Inc., (Del. Ch. Feb. 26, 2015), in which the
The question of whether voting agreements, or so-called drag-along provisions, in stockholder agreements can be used to prevent a dissenter from exercising appraisal rights has not been tested in the courts. Such clauses are often included in stockholders agreements to secure advance shareholder consent to such corporate actions as a sale of the company. Prospective