Appraisal in Delaware: Possible Improvement From the Bottom Up?

40 Pages Posted: 27 Mar 2018

See all articles by William J. Carney

William J. Carney

Emory University School of Law

Keith Sharfman

St. John's University School of Law

Date Written: March 11, 2018

Abstract

We trace the origins of shareholders' rights to judicial appraisal to determine the purpose - to avoid expropriation by majority shareholders. We then trace the meandering path of judicial appraisal in Delaware, which has exhibited a deep distrust of market valuations in favor of broad judicial discretion. While recently the Delaware Supreme Court has begun to attach importance to the deal price arrived at in good faith in mergers, it has continued to ignore the statutory injunction to exclude value added through anticipation or realization of gains through the merger. Instead, too often courts have been swayed or confused by dueling experts to reach values well above deal prices, or occasionally below, without serious consideration of pre-announcement market prices. Only recently has the Chancery Court used an efficiently developed market price to determine value in a manner consistent with the law.

Suggested Citation

Carney, William J. and Sharfman, Keith, Appraisal in Delaware: Possible Improvement From the Bottom Up? (March 11, 2018). Emory Legal Studies Research Paper, Available at SSRN: https://ssrn.com/abstract=3138251 or http://dx.doi.org/10.2139/ssrn.3138251

William J. Carney (Contact Author)

Emory University School of Law ( email )

1221 Fairview Road, N.E.
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404-373-7198 (Phone)
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Keith Sharfman

St. John's University School of Law ( email )

8000 Utopia Parkway
Jamaica, NY 11439
United States
718-990-6616 (Phone)

HOME PAGE: http://www.stjohns.edu/academics/graduate/law/faculty/Profiles/sharfman

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