Recently, several stock appraisal cases have turned out well for those stockholders persistent enough to see their claims through a trial. Does this mean that more stockholders will demand that the Delaware Court of Chancery ask that court to determine the value of their shares when they are cashed out in the merger? While it is too early to tell, there are several good reasons to believe that more appraisal cases will be filed.
Before reviewing the recent decisions, however, it is useful to recall why there generally have been so few appraisal cases filed compared to the hundreds of mergers that cashed out stockholders against their will. First, appraisal actions need seriously motivated plaintiffs. Unlike a traditional class action, each stockholder whose stock is to be appraised must actually demand appraisal. You cannot simply go along with the other stockholders as part of a class led by a class representative who may have been solicited by a plaintiffs law firm. At least to date, the plaintiffs bar has not shown much interest in motivating stockholders to join together by individually asking for their appraisal rights.
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