Kings New York Section 262 of the Delaware General Corporation Law

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

Description

This is a multi-state form covering the subject matter of the title. Kings New York Section 262 of the Delaware General Corporation Law, also known as the appraisal rights statute, grants shareholders the right to receive fair value compensation for their shares in certain circumstances. This provision primarily applies to stockholders who dissent from a corporate action that would result in a merger, consolidation, or sale of the corporation's assets, and thus, they do not agree with the terms of the transaction. Under this statute, shareholders can exercise their appraisal rights by demanding that the corporation pay them the fair value of their shares, rather than accepting the terms proposed by the corporate action. The fair value compensation is meant to ensure that dissenting shareholders are not unfairly prejudiced and are adequately compensated for giving up their ownership rights. To invoke Section 262, shareholders are required to follow specific procedures, including timely delivery of a written demand for appraisal to the corporation before the vote on the proposed action. Once the demand is received, the corporation has the option to respond, either by making a settlement offer to the shareholder or contesting the demand in court. If the corporation contests the demand, typically a lawsuit commences to determine the fair value of the shares and resolve any disagreements. It is worth noting that there are different types of Section 262 proceedings. One type is the appraisal proceeding, where a court determines the fair value of the shares. The court's decision is binding on all shareholders who exercised their appraisal rights, including those who subsequently withdraw their demands. Another type is the expedited proceeding, which is available if the shares are publicly traded and certain criteria are met. The expedited proceeding offers a streamlined process to determine the fair value of the shares, potentially reducing the time and costs associated with a full-blown appraisal proceeding. The purpose of Kings New York Section 262 is to protect minority shareholders' rights and prevent them from being forced into an unfavorable corporate action. By allowing dissenting shareholders to demand fair value compensation, the statute aims to ensure an equitable outcome for all parties involved in these significant corporate transactions.

Kings New York Section 262 of the Delaware General Corporation Law, also known as the appraisal rights statute, grants shareholders the right to receive fair value compensation for their shares in certain circumstances. This provision primarily applies to stockholders who dissent from a corporate action that would result in a merger, consolidation, or sale of the corporation's assets, and thus, they do not agree with the terms of the transaction. Under this statute, shareholders can exercise their appraisal rights by demanding that the corporation pay them the fair value of their shares, rather than accepting the terms proposed by the corporate action. The fair value compensation is meant to ensure that dissenting shareholders are not unfairly prejudiced and are adequately compensated for giving up their ownership rights. To invoke Section 262, shareholders are required to follow specific procedures, including timely delivery of a written demand for appraisal to the corporation before the vote on the proposed action. Once the demand is received, the corporation has the option to respond, either by making a settlement offer to the shareholder or contesting the demand in court. If the corporation contests the demand, typically a lawsuit commences to determine the fair value of the shares and resolve any disagreements. It is worth noting that there are different types of Section 262 proceedings. One type is the appraisal proceeding, where a court determines the fair value of the shares. The court's decision is binding on all shareholders who exercised their appraisal rights, including those who subsequently withdraw their demands. Another type is the expedited proceeding, which is available if the shares are publicly traded and certain criteria are met. The expedited proceeding offers a streamlined process to determine the fair value of the shares, potentially reducing the time and costs associated with a full-blown appraisal proceeding. The purpose of Kings New York Section 262 is to protect minority shareholders' rights and prevent them from being forced into an unfavorable corporate action. By allowing dissenting shareholders to demand fair value compensation, the statute aims to ensure an equitable outcome for all parties involved in these significant corporate transactions.