Will Aruba Finish Off Appraisal Arbitrage and End Windfalls for Deal Dissenters? We Hope So
Document Type
Article
Publication Title
Harvard Law School Forum on Corporate Governance
Publication Date
3-25-2019
Abstract
(Excerpt)
The corporate law world has been abuzz of late about the commendable effort by Delaware’s courts to scale back “appraisal arbitrage”: a trading strategy predicated on deal dissenters receiving via appraisal litigation more for their shares than the deal prices from which they dissent. For years, parties engaging in appraisal arbitrage enjoyed the opportunity to initiate essentially risk free appraisal litigation with substantial upside potential, because it was assumed by courts and litigants that “fair value” entitled dissenters to at least the price of the deal they were rejecting and potentially more. But happily, this misunderstanding and misapplication of the law of appraisal now appears finally to have reached its end.
Comments
Available at: https://corpgov.law.harvard.edu/2019/03/25/will-aruba-finish-off-appraisal-arbitrage-and-end-windfalls-for-deal-dissenters-we-hope-so