In Manti Holdings, LLC v. Authentix Acquisition Co., Inc., No. 354, 2020, 2021 WL 4165159 (Del. Sept. 13, 2021), the Delaware Supreme Court issued an important opinion affirming the use of stockholders agreements by and among Delaware corporations and its stockholders to waive stockholders’ rights of appraisal under Section 262 of the Delaware General Corporation Law.  The Manti Holdings decision further solidifies Delaware’s strong policy preference of freedom of contract and private ordering, and confirms that Delaware corporations can have its stockholders waive appraisal rights.  Note, however, that not every appraisal waiver may be valid.  It also raises the question of what other seemingly “mandatory” stockholder rights may be waived in documents that are not a charter or bylaw.

Continue Reading Delaware Supreme Court Affirms the Use of Stockholders Agreements to Waive Appraisal Rights

In In re Appraisal of Dell Inc., No. 9322 VCL, 2016 Del. Ch. LEXIS 81 (Del. Ch. May 31, 2016) (Laster, V.C.), the Delaware Court of Chancery determined that the fair value of the common stock of Dell Inc. (“Dell” or the “Company”) as of the effective date of a 2012 management buyout (“MBO”) was $17.62 per share, or $3.74 per share more than the merger consideration of $13.75 per share plus a $0.13 special dividend.  Although Dell’s directors properly discharged their fiduciary duties, and the sale process included a go-shop period that triggered a bidding contest, according to the Court, the MBO underpriced the Company by more than $5 billion.  Notably, the factors responsible for this divergence included limitations inherent in any MBO-driven sale process.  The Court relied entirely on a discounted cash flow (“DCF”) analysis to determine fair value.  The decision likely will further increase the frequency in which stockholders of Delaware corporations pursue statutory appraisal rights, particularly in the MBO context.
Continue Reading Delaware Chancery Court Rejects MBO Merger Price as Best Evidence of Fair Value in Appraisal Proceeding