In an apparent question of first impression, the Delaware Court of Chancery is considering whether stockholders in a Delaware corporation can relinquish their rights to object to the sale of the company and waive fiduciary duty claims through a stockholder agreement. Law360 reports here that Vice Chancellor Sam Glassock III has asked for supplemental motion-to-dismiss
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
Seven years ago this week, in Roam-Tel Partners v. AT&T Mobility, C.A. 5745-VCS (Del. Ch. Dec. 17, 2010), then-Vice Chancellor Strine held that in a short-form merger, a stockholder can revoke its prior waiver of its appraisal rights within the twenty-day statutory election period, absent any prejudice to the corporation. In that case, the
Eight years ago today, in DiRienzo v. Steel Partners Holdings L.P., No. 4506-CC (Del. Ch. Dec. 8, 2009), Chancellor Chandler reaffirmed the principle that the record holder requirements of Section 262(a) demand strict compliance.
The Chancery Court dismissed an appraisal petition on grounds that the appraisal demand was not made by a record holder
On Monday the Delaware Chancery Court heard challenges by Dell to the entitlement of various dissenting shareholders to pursue their appraisal claims. Dell’s challenges included failures by shareholders to timely and accurately assert their appraisal rights, and a lack of continuous ownership of Dell stock based on purported changes in the nominal ownership of such
As reported in USAToday, T. Rowe Price, the third largest shareholder in Dell, Inc., has been pursuing an appraisal case to recover more than the $13.75 per share merger price. However, it has now come to light that T. Rowe actually voted “for” the 2013 take-private deal by the company’s founder, thus threatening its
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
Like common stockholders, holders of preferred stock may exercise appraisal rights. The extent of what those rights actually entail, however, may be far more limited than what common shareholders may experience. As a general rule, preferred stock has the same appraisal rights as common stock, but “[u]nlike common stock, the value of preferred stock is