The Uncertain Case for Appraisal Arbitrage

49 Pages Posted: 17 Sep 2018

See all articles by Jay Kesten

Jay Kesten

Florida State University - College of Law

Date Written: April 21, 2017


This Article presents a skeptical, though not dismissive, view of appraisal arbitrage. While there are benefits associated with appraisal litigation, the Article introduces both economic theory and empirical evidence demonstrating that increased levels of appraisal arbitrage also create efficiency costs and distributional concerns. Given the need to balance these costs and benefits, the Article presents a principled basis for modifying the appraisal litigation process to allow for privately ordered fee-shifting: target companies can opt-out of the American Rule in exchange for a heightened burden of proof.

Keywords: Appraisal Rights, Appraisal Arbitrage, M&A Litigation, Fee Shifting, American Rule, Delaware, Private Ordering

JEL Classification: K00, K20, K22, K40, K41

Suggested Citation

Kesten, Jay, The Uncertain Case for Appraisal Arbitrage (April 21, 2017). Wake Forest Law Review, Vol. 52, No. 1, 2017, FSU College of Law, Public Law Research Paper No. 892, FSU College of Law, Law, Business & Economics Paper No. 18-9, Available at SSRN:

Jay Kesten (Contact Author)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

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