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Court Of Chancery Explains Limits On Stockholder Challenges To Short-Form Mergers

Posted In Appraisal

In Re United Capital Corp. Stockholders Litigation, C.A. 11619-VCMR (January 4, 2017)

It is well understood that minority stockholders have limited rights to object to a short-form merger under Delaware law.  This decision affirms that minority stockholders cannot challenge the merger on fairness grounds alone, but must seek appraisal as the remedy for an inadequate price. However, since the stockholders are faced with the decision of whether to accept the deal price or seek appraisal, the duty of disclosure still applies.  This decision is helpful for its in-depth analysis of the many disclosure allegations.

Tags: Appraisal