Recent judicial decisions and legislation impact appraisal proceedings in Delaware

The past decade has been a remarkable period for Delaware appraisal proceedings. The practice of “appraisal arbitrage” as a means of opportunistic investment accelerated between 2007 and 2014 due to multiple factors, including above-deal price appraisal decisions by the Court of Chancery between 2010 and 2014. The practice continued at a rapid pace through the first half of 2017, but has since begun to slow down.

Special commentary included in the Spring 2018 edition of Delaware Laws Governing Business Entities examines the circumstances that led to using statutory appraisal as an investment strategy, and how a combination of judicial decisions, legislative changes, and impending technological advancements is causing (or will cause) appraisal arbitrage to decline.

“Appraisal arbitrage may not be as prevalent or as attractive a form of investment as it has been in recent years,” note Delaware attorneys Christopher N. Kelly and Ryan M. Murphy in the commentary. “This should serve to reassure prospective buyers considering acquisitions of Delaware corporations and produce the most value for the long-term stockholders of companies chartered in the State.”

CSCPublishing releases Delaware Laws Governing Business Entitiesits flagship publication—twice a year to ensure that practitioners are working with the most up-to-date statutory information and have access to the very latest case law. Unique features such as the Special Commentary in this Spring edition provide additional resources and valuable insight for legal professionals working with Delaware entities.

Spring 2018

The Spring 2018 Edition of Delaware Laws Governing Business Entities captures 50 new case notes from Delaware state courts and from courts in other jurisdictions applying Delaware business entity law. A Table of New Annotations lists added cases, and gray bars in the body of the book indicate where they have been inserted. Volume 2 contains a continuously updated collection of annotations from courts around the country interpreting Delaware business law, as well as six new full text cases focusing on the latest legal developments concerning depositions, breach of fiduciary duty, reclassification, fair market value, inspection of records, and mergers.

The Spring Edition also includes the latest legislative changes through Act Chapter 199 of the 149th General Assembly, with updates to the Chancery Court rules through January 8, 2018. The Table of Sections Affected provides an overview of legislative changes, while Blackline Amendment notes clearly indicate how the laws have changed. In addition, in-depth legal analyses written by CSC® Publishing’s Senior Legal Advisors, Delaware attorneys Matthew O’Toole and Robert Symonds, explore the impact of the legislation coming out of the 2017 Session.

A comprehensive fee table in Volume 1 helps businesses calculate annual franchise taxes and other related entity fees, while Volume 2 contains the helpful “Guidelines for Persons Litigating in the Court of Chancery.” There is also a companion CD-ROM with more than 150 forms related to business law in Delaware.

The Spring 2018 Edition of Delaware Laws Governing Business Entities is available as a two-volume softbound book or as an ebook, compatible with dedicated e-reader devices, computers, tablets and smartphones that use e-reader software or applications. It is also available on the LexisNexis Digital Library.

Another essential resource for Delaware business entity law:

Symonds & O’Toole on Delaware Limited Liability Companies, Second Edition

More Delaware limited liability companies are formed each year than any other Delaware business entity. Symonds & O’Toole on Delaware Limited Liability Companies—referred to in a Delaware Court of Chancery decision as “the leading Delaware LLC treatise”—offers workable solutions for even the most complex transactions and practical insight into case law interpreting the statute, to help practitioners provide the best possible representation and advice to clients looking to make the most of their Delaware LLCs.

The 2018 release includes full text and in-depth analysis of 2017 amendments to the Delaware Limited Liability Company Act, including amendments regarding:

  • Distinction between domestic limited liability companies and foreign limited liability companies
  • Substantial compliance standard related to formation
  • Type of business or entity that may be involved in fundamental transactions
  • Delegation of rights, powers and duties to manage and control the business and affairs of a Delaware limited liability company

The release also examines recent case law developments, including decisions addressing:

  • Interpretation and enforcement of LLC agreements
  • Information access rights
  • Removal of managers
  • Personal jurisdiction
  • Fiduciary duties
  • Indemnification and advancement
  • Dissolution and winding up

The table setting forth the statute’s “Default Rules” has been updated, as well as the Table of Cases, Table of Statutes, and Index.

Authors Robert L. Symonds, Jr. and Matthew J. O’Toole, are partners at Potter Anderson & Corroon LLP in Wilmington, Delaware. Mr. Symonds is one of the original drafters of the Delaware Limited Liability Company Act. He is a former chairman and along with Mr. O’Toole is a long-time member of the Delaware State Bar Association committee responsible for proposing amendments to that statute and to Delaware’s limited partnership and general partnership laws.

To learn more about the Spring 2018 Edition of Delaware Laws Governing Business Entities and Symonds & O’Toole on Delaware Limited Liability Companies, call 1.800.533.1637 or visit us online at www.lexisnexis.com/csc.

CSC® Publishing: Delaware Laws Governing Business Entities