The Long Rise and Quick Fall of Appraisal Arbitrage

55 Pages Posted: 2 Mar 2020

See all articles by Wei Jiang

Wei Jiang

Columbia Business School - Finance and Economics

Tao Li

University of Florida - Department of Finance, Insurance and Real Estate

Randall S. Thomas

Vanderbilt University - Law School; European Corporate Governance Institute (ECGI)

Date Written: February 28, 2020

Abstract

Appraisal is a legislatively created right for shareholders to seek a judicial determination of the fair value of their stock in certain transactions. For many decades, appraisal was a little used, frequently maligned, corporate law remedy. Beginning at the turn of the 21st century, this all changed when a group of financial investors, including several hedge funds, began filing appraisal cases. Appraisal arbitrage, as it became known, grew rapidly in popularity.

Keywords: Delaware corporate law, shareholder litigation, appraisal arbitrage, Delaware appraisal amendments, mergers and acquisitions, appraisal, and valuation methods

JEL Classification: G23, K22

Suggested Citation

Jiang, Wei and Li, Tao and Thomas, Randall S., The Long Rise and Quick Fall of Appraisal Arbitrage (February 28, 2020). Vanderbilt Law Research Paper No. 20-16. Available at SSRN: https://ssrn.com/abstract=3546281 or http://dx.doi.org/10.2139/ssrn.3546281

Wei Jiang

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States
(212) 854-5553 (Phone)

Tao Li (Contact Author)

University of Florida - Department of Finance, Insurance and Real Estate ( email )

Warrington College of Business
Gainesville, FL 32611
United States

HOME PAGE: http://warrington.ufl.edu/contact/profile.asp?WEBID=7628

Randall S. Thomas

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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