The Long Rise and Quick Fall of Appraisal Arbitrage

55 Pages Posted: 2 Mar 2020

See all articles by Wei Jiang

Wei Jiang

Emory University Goizueta Business School; ECGI; NBER

Tao Li

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

Randall S. Thomas

Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Law School

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. 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

Emory University Goizueta Business School ( email )

1300 Clifton Rd
Atlanta, GA 30322
United States

ECGI ( email )

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

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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 - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States

Vanderbilt University - Law School ( email )

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

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