Short-Form Mergers in Delaware

16 Pages Posted: 22 Nov 2003  

Marc I. Steinberg

Southern Methodist University - Dedman School of Law

Abstract

This article analyzes the ramifications of the Delaware Supreme Court's decision in Glassman v. Unocal Exploration Corp. that limited a minority shareholder's remedy in the short-form merger context normally to that of appraisal. This decision stands in marked contrast to the invocation of the entire fairness test that applies in parent-subsidiary long-form mergers. Nonetheless, important issues remain outstanding after Glassman, including the continued critical role of adequate disclosure, the determination of fair value, the viability of the "loss state remedy" theory, a parent corporation's increased use of the tender offer as a means to consummate a short-form merger, and the availability of appropriate relief, including rescissory damages, when fraud is perpetrated in the short-form merger setting. While applauding the Delaware Supreme Court's decision in facilitating the effectuation of short-form mergers, and hence in providing increased assurance of commercial certainty, Professor Steinberg posits that the Delaware courts' keen scrutiny with respect to the adequacy of disclosure in this context is crucial in order to provide minority shareholders some meaningful degree of protection.

Suggested Citation

Steinberg, Marc I., Short-Form Mergers in Delaware. The Delaware Journal of Corporate Law, Vol. 27, No. 2, pp. 489-504, 2002. Available at SSRN: https://ssrn.com/abstract=398861

Marc I. Steinberg (Contact Author)

Southern Methodist University - Dedman School of Law ( email )

P.O. Box 750116
Dallas, TX 75275
United States

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