Delaware Supreme Court Upholds Reliance on Merger Price in Appraisal Action
The past several years have seen the rise of so-called “appraisal arbitrage,” in which entities purchase shares after the announcement of the merger in order to pursue an appraisal claim. As a result, guidance from the Delaware courts as to the contours of, and valuation methods used in, an appraisal proceeding has become more and more relevant both to lawyers and their clients. In Huff Fund Investment Partnership v. CKx, Inc., the Delaware Supreme Court affirmed the Court of Chancery’s decision concluding that the price paid in a third-party arms’-length merger was the most probative evidence of fair value.
Click here to download the Morris Nichols analysis of the order.