Valuation Problems in the Appraisal Remedy

Authors

Michael R. Schwenk, Benjamin N. Cardozo School of Law

Abstract

The corporate codes of every state allow shareholders who dissent from certain fundamental corporate transactions to compel the corporation to purchase their shares. This right is commonly known as the appraisal remedy. Shareholders who vote against the triggering transaction, usually a merger, receive a right to be paid the "fair value" of the stock. Courts must convert the statutory fair value standard into one that is judicially administrable. In the past, Delaware measured fair value solely by the judicially created Delaware Block Method. In 1983, after years of criticism, Delaware eliminated the Delaware Block Method as the sole valuation test in appraisal in the landmark case Weinberger v. UOP, Inc. Other jurisdictions followed suit.

Keywords

Dissenters' Rights, Business and the Law, Stocks, Securities, Prejudgment Interest, Penology

Disciplines

Law | Securities Law

Recommended Citation

Michael R. Schwenk, Valuation Problems in the Appraisal Remedy, 16 Cardozo L. Rev. 649 (1994).
Available at: https://larc.cardozo.yu.edu/clr/vol16/iss2/10