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Minor Myers

This chapter examines the ways in which appraisal is a form of representative litigation. The author explains that, although appraisal claims cannot be brought as class actions, they are nonetheless a form of collective action. The outcome of an appraisal proceeding binds all dissenting stockholders, not just those who have filed a petition in court, and petitioning stockholders can recover their expenses pro rata from other members of the dissenting group. The representative nature of these suits gives rise to legal questions about control of claims, sharing of expenses, settlement rights, and notice obligations to other dissenters that are familiar but distinct from the class action context. This chapter explores these questions by analyzing the dynamics of an appraisal claim through its life cycle, from the initial decision to dissent to the sharing of expenses following a trial judgment.

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Charles R. Korsmo and Minor Myers

This chapter provides an overview of stockholder appraisal activity—including recent data—together with an evaluation of recent legal developments, both judicial and legislative. The year 2015 was a record year for stockholder appraisal in terms of the number of mergers challenged and the dollar amounts involved. The evidence shows, however, that appraisal remains relatively rare and continues to be focused on deals with abnormally low merger premia and sales processes marked by conflicts of interest. As this chapter explains, developments in Delaware suggest a growing acceptance of the recent blossoming of appraisal arbitrage as an investment strategy, coupled with sensible prophylactic measures against potential abuses of the appraisal remedy.

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Charles R. Korsmo and Minor Myers

This chapter provides an overview of modern appraisal litigation, describes a backlash among defendants and their advisors, and evaluates the chief potential argument levied against appraisal. The principal justification for appraisal is that, at the margin, it deters transactions that would deliver too little value to stockholders, as compared to remaining independent. The available evidence suggests that appraisal can serve this deterrence function better than other forms of merger-related litigation.