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Court Of Chancery Rejects Appraisal Claim

Posted In Appraisal

Krieger v. Wesco Financial Corp., C.A.6176-VCP (October 13, 2011)

Some corporate mergers give stockholders of the acquired company an option to take cash or the stock of the acquiror.  If the stockholder fails to chose, then she typically gets the cash.  The appraisal statute only provides for an appraisal claim when the stockholder is required to take cash and not publicly traded stock.  Here the plaintiff who had not made the election to take stock and so got cash argued she was forced to take cash and hence was entitled to appraisal of her shares.

The Court said "no," reasoning that so long as she had a choice she was not forced to take the cash.  Risking the wrath of some members of Congress, the Court cited to a famous French philosopher on why you still have a choice even when you do not decide to act.  That too is your choice.

Tags: Appraisal
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