A recent decision by Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery highlights the uses and perils of the laches doctrine in Delaware equity cases. In Houseman v. Sagerman, C.A. No. 8897-VCG, 2015 WL 7307323 (Del. Ch. Nov. 19, 2015), Glasscock dismissed a stockholder’s claim seeking the remedy of quasi-appraisal to redress alleged breaches of fiduciary duty in connection with a merger transaction, finding the claim barred by laches because the stockholder had unreasonably delayed in filing the suit and thereby prejudiced the defendants.
The Quasi-Appraisal Remedy
Quasi-appraisal is an equitable remedy available post-closing in transaction litigation when the statutory appraisal remedy of 8 Del. C. §262, which provides a cause of action for stockholders who dissent from a cash-out merger, is not available. The stockholder must first submit a written demand for appraisal to the corporation before the stockholder vote on the merger is taken. 8 Del. C. §262(d)(1). The stockholder then has 120 days after the merger closes to commence an appraisal proceeding to obtain damages representing the fair value of his shares at the time of the merger. 8 Del. C. §262(e).
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