Appraisal Provides Exclusive Remedy in Short Form Mergers
Shareholders filed an appraisal action under Delaware law seeking the fair value of their shares in connection with a short form merger. On the eve of trial, they filed a separate action for breach of fiduciary duty of disclosure against the directors regarding the merger seeking the difference between the fair value of their shares and the merger price. Deciding the issue as a matter of first impression, the court bounced the second suit for lack of standing because the relief sought in the fiduciary duty claim was the same as that afforded in the state law appraisal action. This may affect shareholders rights to bring fiduciary claims in the future if the parties don’t properly preserve their rights.
In Re Appraisal of the Aristotle Corporation, No. C.A. 5137-CS (Del. Ct. of Chan. January 10, 2012).