Tag: Delaware
Data Points from Recent Appraisal Decisions
As concerns over the potential exercise of appraisal rights are increasingly being factored into deal price, data points from recent Delaware appraisal decisions may help inform a party of its appraisal risks and, if an appraisal claim is filed, may also be useful in deciding whether to settle the claim […]
Dell Decision and Recent Amendments to Delaware’s Appraisal Statute
Section 262 of the DGCL provides a statutory remedy for stockholders who do not vote in favor of certain M&A transactions (generally cash mergers) to petition the corporation to buy their stock at a price equivalent to the “fair value” of the stock, subject to compliance with certain procedures. A […]
CDX Holdings Decision Spotlights the Treatment of Stock Options in a Merger
The treatment of outstanding stock options and other equity compensation awards is often a key element of a sale transaction. Because stock options can represent considerable value, how they are treated can have a significant impact on the company’s management team and employees. For the parties negotiating the transaction, it can […]
DE Court Comments on Block-Holder Rights in OptimisCorp
The Delaware Supreme Court issued an Order this week in OptimisCorp v. Waite that could have implications for VC-backed or other companies with so-called “block-holder” directors – or directors who are appointed by a stockholder with a large block of shares – in the context of corporate turmoil where management, […]
No Harm, but Foul: Process Considerations for “Interested” Transactions
After over seven years of litigation, the Delaware Supreme Court on December 11, 2015 upheld the Court of Chancery’s important decision in Nine Systems, which held that a 2002 recapitalization of a streaming media start-up unfairly diluted the minority stockholders when VC-backed directors failed to include the stockholders in an emergency round of financing […]
Delaware Chancery Court Weighs in on Fair Value in an Appraisal action
In the last few years, there have been numerous developments in the law and practice surrounding appraisal rights under Delaware law.
Books and Records – An Assist to Forum Selection
A frequent precursor to public company deal litigation is the books and records request under Section 220 of the Delaware General Corporation Law. Typically employed by plaintiffs as the first step of “information gathering” for derivative litigation, a company’s right to limit the potential geographic use of requested information has been validated by the Delaware courts.
The Latest in “Appraisal Arbitrage”
The practice of “appraisal arbitrage” has hit the radar for all public company dealmakers. Typically employed, to date, by activist investors and hedge funds, this strategic tool has recently received a shot in the arm with recent Court of Chancery opinions.
What Revlon Doesn’t Require
Two decisions by the Delaware courts (In re Family Dollar Stores, Inc. and C&J Energy Services Inc. v. City of Miami General Employees’ and Sanitation Employees’ Retirement Trust have more precisely defined the contours—substantive and procedural—of exactly what is (and what is not) required by a board of directors in complying with “Revlon” duties related to the sale of a controlling stake in a Delaware corporation.
M&A Releases and Post-Closing Indemnity Obligations in Private Company Merger Agreements
In Cigna Health & Life Insurance Company v. Audax Health Solutions, Inc. (Del. Ch. November 26, 2014), the Delaware Court of Chancery invalidated two buyer-imposed requirements that are frequently found in private company mergers, specifically the conditioning of payment of merger consideration on a release and certain aspects of post-closing […]