In a comprehensive ruling handed down last week, the Grand Court of the Cayman Islands confirmed that minority shareholders of companies that undertake a ‘short-form’ merger are entitled to dissent from the merger and to be paid fair value for their shares, as determined by the Grand Court. The ruling, delivered in Changyou.com Limited,
Short-Form Merger
The State of Delaware Appraisal
CLS BlueSky Blog has published a post discussing the current state of Delaware appraisal law and fitting appraisal developments into the broader context of M&A rules and corporate governance. The post covers recent appraisal decisions, with the authors concluding that: “in our view, generally, the court is more likely to continue to reach above-the-deal-price…
Appraisal Amendments to Become Effective on August 1
Now that the amendments to the Delaware appraisal statute have been signed into law, the new provisions will apply to all M&A agreements entered into on or after August 1. Here is a link to the rule as revised, showing the new terms (only Sections 8-11 relate to appraisal). As we have posted previously…
Will Appraisal “Reform” Be Successful?
As we’ve previously covered in this blog, the Delaware Legislature has proposed two changes to its appraisal statute in response to an increasing number of appraisal filings. The first proposal, the De Minimis Exception, would require that anyone bringing an appraisal action have, at minimum, a $1 million stake in the company or 1 percent…
Proposed Appraisal Amendments Might Increase Filings
Today’s New York Times ran this piece analyzing the proposed Delaware amendments on appraisal proceedings, which we blogged about last week. The New York Times shares our own observation that the proposed legislation’s provision allowing for prepayment by the M&A target could have the unintended effect of increasing appraisal filings: “Rather than discourage appraisal…
Proposed Changes to Delaware Appraisal Statute OK’d By Delaware House
Proposed changes to the Delaware appraisal statute have cleared Delaware’s House of Representatives without dissent, and now move on to the state Senate. The new legislation, which we blogged about in March, sets a floor for the number of shares and value of suit necessary to bring an appraisal action. It also permits M&A…
Proposed 2016 Changes to Delaware Appraisal Statute
A number of amendments to Delaware’s appraisal statute have once again been proposed by the Corporate Council of the Corporation Law Section of the Delaware State Bar Association, the committee that customarily recommends legislative action to Delaware’s state lawmaking body. If certain proposed changes to the Delaware General Corporation Law (“DGCL”) are approved by the…
Without Fanfare, Chancellor Bouchard Hands Down First Appraisal Opinion
The Delaware Chancery Court’s recent opinion in Owen v. Cannon has garnered little notice or press coverage, but deserves attention not only because the hybrid fiduciary duty-appraisal decision is Chancellor Bouchard’s first foray into the appraisal space, but because it reinforces some basic appraisal tenets and yet also bucks what some have called a recent…
Chancery Court Rejects Use of Merger Price in Appraisal Action and Accepts Experts’ Direct Capitalization of Cash Flows Valuation Method; Court Also Accepts Experts’ Use of Buildup Model
On May 12, 2014, the Delaware Court of Chancery issued its latest appraisal opinion, Laidler v. Hesco Bastion Environmental, Inc., addressing, among other things, the limitations on the use of merger price in an appraisal proceeding.
The petition for appraisal was brought by a former employee of Hesco Bastion USA, Inc. (“Hesco”), which manufactured…