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Court Of Chancery Explains Good Faith In Extending Time Limit To Accept Merger Consideration

Posted In M&A

Amirsaleh v. Board of Trade of the City of New York, C.A. 2822-CC ( January 19, 2010)

A recent trend is to offer 2 types of consideration in connection with a merger and to permit the stockholders to pick which they prefer, such as stock or cash. Of course, the time to pick must be limited as a practical matter. This decision deals with when the time limit may be extended and when a company may in good faith cut off the extensions. Basically, decisions that are made for neutral business reasons and not to favor a selected few will be respected by the Court.

Om August 16, 20121, the Delaware Supreme Court reversed this decision. The Supreme Court held that once a deadline was  waived, that waiver could not be retracted, at least with out setting a clear new deadline.

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