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; ECGI; NBER

Tao Li

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

Randall S. Thomas

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

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

Columbia Business School - Finance and Economics ( email )

3022 Broadway
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(212) 854-5553 (Phone)

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NBER ( email )

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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

Vanderbilt University - Owen Graduate School of Management

401 21st Avenue South
Nashville, TN 37203
United States

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