Texas Section 262 of the Delaware General Corporation Law, commonly known as the appraisal rights statute, provides minority shareholders with the legal right to dissent from certain corporate transactions and demand the fair value of their shares. It is a crucial provision that aims to protect shareholders' interests by ensuring they are fairly compensated in cases where actions affecting their ownership interests, such as mergers or consolidations, are taken. Under Section 262, minority shareholders who dissent from a corporate action have the right to file a petition with the Delaware Court of Chancery to determine the fair value of their shares. This allows shareholders to challenge the company's valuation and obtain a fair and independent evaluation of their holdings. Appraisal rights are typically triggered by specific corporate actions, including mergers, consolidations, or the sale of substantially all the corporation's assets. In such cases, shareholders who do not support these transactions can demand a fair value appraisal. It is crucial to note that Texas Section 262 of the Delaware General Corporation Law encompasses different types of appraisal rights, including: 1. Statutory Appraisal: This provision grants shareholders the right to file a petition for an appraisal and demand fair value when dissenting from certain corporate transactions. 2. Minority Shareholder Dissent: Minority shareholders, owning less than the majority of shares, have the right to dissent from corporate actions and demand fair value for their shares, enabling them to protect their financial interests and ensure compensation is equitable. 3. Fair Value Determination: Upon filing a petition for appraisal, the Delaware Court of Chancery conducts a thorough evaluation to determine the fair value of the dissenting shareholders' stock. This evaluation considers various factors, including the company's financial condition, future prospects, market value, and any synergies resulting from the corporate action. In summary, Texas Section 262 of the Delaware General Corporation Law provides minority shareholders with powerful appraisal rights when dissenting from certain corporate transactions. It allows shareholders to obtain a fair evaluation of their shares and ensures they receive proper compensation for their ownership interests.
Texas Section 262 of the Delaware General Corporation Law
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