New York Section 262 of the Delaware General Corporation Law

• Category: Corporations - Mergers and Acquisitions
• State: Multi-State
• Control #: US-CC-12-829
• Format: Word; Rich Text

Description

This is a multi-state form covering the subject matter of the title. New York Section 262 of the Delaware General Corporation Law, also known as the "Appraisal Rights," is a crucial provision that protects shareholders in Delaware corporations during significant corporate transactions. This law grants shareholders the right to seek a judicial appraisal for their shares' fair value when they dissent to certain corporate actions. Under New York Section 262, shareholders can exercise their appraisal rights when a domestic Delaware corporation is engaged in a merger, consolidation, or any other transaction that would result in the shareholder's dissenting shares being converted into cash, stock, or other securities. This provision primarily applies to stock-for-stock or cash mergers, but it can extend to other transactions too. The aim of Section 262 is to protect shareholders from being unfairly forced into transactions that might not fully compensate them for their shares' worth. It establishes a legally mandated process through which shareholders can petition the court to determine the fair value of their shares independently. When invoking appraisal rights, shareholders must follow certain procedural requirements outlined in Section 262. Some critical requirements include filing a written notice of their intent to seek appraisal before the vote on the proposed transaction, refraining from voting in favor of the transaction, and properly demanding appraisal of their shares after the transaction is approved. The court's appraisal process takes into account various factors, such as the corporation's intrinsic value, market value, earning power, future prospects, and any other relevant factors that may impact the shares' fair value. After determining the fair value, the court will order the corporation to pay the shareholder the appraised value of their shares, along with any statutory interest accrued. It is important to note that New York Section 262 is not the only appraisal provision within the Delaware General Corporation Law. Other provisions, including Section 261, and variations within Section 262, exist to address specific scenarios and requirements for appraisal rights. For example, Section 262(h) specifies appraisal rights for certain short-form mergers, while Section 262(j) establishes appraisal rights for transactions where there is a stockholder vote on the adoption or amendment of an original or amended certificate of incorporation. In summary, New York Section 262 of the Delaware General Corporation Law is a critical provision that safeguards shareholders' rights to seek a fair value appraisal for their shares in specific corporate transactions. This provision promotes fairness and transparency in corporate dealings and ensures shareholders are adequately compensated for their investments.

New York Section 262 of the Delaware General Corporation Law, also known as the "Appraisal Rights," is a crucial provision that protects shareholders in Delaware corporations during significant corporate transactions. This law grants shareholders the right to seek a judicial appraisal for their shares' fair value when they dissent to certain corporate actions. Under New York Section 262, shareholders can exercise their appraisal rights when a domestic Delaware corporation is engaged in a merger, consolidation, or any other transaction that would result in the shareholder's dissenting shares being converted into cash, stock, or other securities. This provision primarily applies to stock-for-stock or cash mergers, but it can extend to other transactions too. The aim of Section 262 is to protect shareholders from being unfairly forced into transactions that might not fully compensate them for their shares' worth. It establishes a legally mandated process through which shareholders can petition the court to determine the fair value of their shares independently. When invoking appraisal rights, shareholders must follow certain procedural requirements outlined in Section 262. Some critical requirements include filing a written notice of their intent to seek appraisal before the vote on the proposed transaction, refraining from voting in favor of the transaction, and properly demanding appraisal of their shares after the transaction is approved. The court's appraisal process takes into account various factors, such as the corporation's intrinsic value, market value, earning power, future prospects, and any other relevant factors that may impact the shares' fair value. After determining the fair value, the court will order the corporation to pay the shareholder the appraised value of their shares, along with any statutory interest accrued. It is important to note that New York Section 262 is not the only appraisal provision within the Delaware General Corporation Law. Other provisions, including Section 261, and variations within Section 262, exist to address specific scenarios and requirements for appraisal rights. For example, Section 262(h) specifies appraisal rights for certain short-form mergers, while Section 262(j) establishes appraisal rights for transactions where there is a stockholder vote on the adoption or amendment of an original or amended certificate of incorporation. In summary, New York Section 262 of the Delaware General Corporation Law is a critical provision that safeguards shareholders' rights to seek a fair value appraisal for their shares in specific corporate transactions. This provision promotes fairness and transparency in corporate dealings and ensures shareholders are adequately compensated for their investments.