Proxy firm Institutional Shareholder Services’ Sustainability Proxy Voting Guidelines – 2020 Policy Recommendations are public, and include a recommendation that shareholders vote in favor of appraisal rights when they are on the ballot.
ISS observes that some investment funds are taking a view towards incorporating various issues into their voting behavior – including corporate governance,
We’ve posted before that appraisal has multiple factors: appraisal can be a valuable tool for investors seeking additional returns; it can fit within a larger strategy around a merger; and appraisal itself can be a consideration for deal-professionals looking at merger structure, concerned about quasi-appraisal remedies, or those determining the mechanical steps necessary
The case Dieckman v. Regency GP LP, No. CV 11130-CB, 2019 WL 5576886 (Del. Ch. Oct. 29, 2019) does not concern appraisal rights – at least not directly. But the history of the merger in that case is a valuable reminder that an investor expecting to use the appraisal remedy must follow the transaction
Does the existence of the appraisal remedy, and its use, have an effect on arbitrage spreads? If the appraisal remedy results in lower arbitrage spreads, then one can conclude that shareholders writ large are benefiting from the appraisal remedy – the argument advanced by Professors Brian Broughman, Audra Boone, and Antonio Macias in their piece
Loomis Sayles, an investment manager based in Boston, includes in its proxy voting guidelines {page A-100} a rule to vote “for proposals to restore, or provide shareholders with, rights of appraisal.” This is similar to a number of other investors we have previously covered – including pension funds, state investment boards, major proxy
We’ve covered before how drag-along provisions and other contractual provisions can involve the waiver of appraisal rights. Recent caselaw from Delaware has made it clear that in at least some instances, a contractual waiver of appraisal rights is enforceable.
In particular, the Authentix decision, discussed at length by various authors here (law firm), here
As we have noted before, getting the basics right is important in the world of appraisal. For example, if appraisal rights are available to shareholders, then an appraisal notice must get that right. Simpler still, as an article in Forbes reminds readers, in any M&A transaction, whether appraisal rights exist and whether shareholders
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.”
And further:
“The Court was
Yes, in sum. The two terms are often used interchangeably in the literature. Certain countries or jurisdictions have a stronger tradition of referring to these important shareholder rights as either appraisal rights – focusing on the remedy – or dissenters rights – focusing on the entitlement. Arguably, dissenters rights may be thought of as broader
We’ve covered the Mobile Posse case before, specifically, how it shows the importance of getting the basics right regarding appraisal notices. The Delaware Litigation blog provides more on Mobile Posse, including a recap of whether a post-suit “do over” is available:
“The company sought a “do-over” or a mulligan for its statutory errors