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Court Tolls Appraisal Statute Despite First-Filing In Bankruptcy Court

Encompass Services Holding Corp. v. Prosero Incorp. f/k/a Corp., C.A. No. 578-N, 2005 WL 332810 (Del. Ch. Feb. 03, 2005). This is a 8 Del. C. §262 share appraisal case brought by a "debtor in possession" after the dismissal of its earlier filed adversarial proceeding in the bankruptcy court. This appraisal action originates from the merger of FacilityPro with a merger subsidiary creating Prosero Corp. Plaintiff-petitioner Encompass filed its demand for appraisal of shares with the Bankruptcy court. Deciding it did not have jurisdiction to appraise the shares, the court dismissed the action without prejudice, to permit filing in the Court of Chancery. Respondent moved to dismiss on grounds of late filing. Reading the statute's word "may" in Section 262 as permitting such filings in other courts, the court held that petitioner had adequately conformed to the statute's timeline and under the "totality of circumstances," the filing with the Bankruptcy court had tolled the running of the statute without petitioner's delay or fault. Authored by: Raj Srivatsan 302-888 6831 Share
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