Kings New York Section 262 of the Delaware General Corporation Law

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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.

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6 Appraisal waivers allow issuers to limit or eliminate appraisal rights, thereby reducing the cost and uncertainty of appraisal ex ante. Private companies are implementing appraisal waivers through contractual provisions that include drag-along rights, fair price provisions and explicit appraisal waivers.

The DGCL provides for mandatory appraisal rights in certain circumstances in connection with a merger or consolidation while the LLC Act provides that appraisal rights do not exist except when those rights are specifically provided for in the company agreement or an agreement of merger.

Stockholder Approval Required to: Amend the Certificate of Incorporation. Enter into fundamental corporate transactions (sale of company, merger, sale of substantially all assets of corporation, etc.) Elect Directors (though vacant seats from departed directors can often be filled by Board)

Under Section 80 of the Revised Corporation Code, Appraisal Right refers to the right of any stockholder of a corporation to dissent and demand payment of the fair value of his or her shares in the corporation.

When a dissenting shareholder disagrees with a firm's actions, they can exercise appraisal rights; appraising their shares, and being paid the fair market value for them. Dissenters' rights provide an easy way out of a company for a shareholder.

MBCA section 13.02(a) lists five mandatory appraisal triggers, each of which specifically defines events that require the corporation to offer its shareholders appraisal rights: (1) mergers, (2) share exchanges, (3) dispositions of assets, (4) amendments to the articles, and (5) conversion or domestication.

By providing for appraisal rights, a jurisdiction like Delaware provides investors with a powerful tool to protect the value of their investment against unfair, opportunistic or simply ill-timed bids by allowing the investor to require a court to determine the fair value of the securities notwithstanding the

An appraisal right is the statutory right of a corporation's shareholders to have a judicial proceeding or independent valuator determine a fair stock price and oblige the acquiring corporation to purchase shares at that price.

No Appraisal Rights When Shareholders Can Receive Acquirer Stock.

As explained by the Supreme Court, the appraisal right is exercised by any stockholder who has voted against the proposed corporate action by making a written demand on the corporation within 30 days after the date on which the vote was taken for the payment of the fair value of his shares.

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The Delaware legislature made two principal amendments to Section 262 of the DGCL. The single mom of two owned a home and her own business.Constitutional Convention, ‎Sherman Croswell, ‎R.

A. (1924) 5-5-1925 The intent of the clause is, that such citizens be subject, according to the ordinary rules of law with respect to creditors, to the same rights in the case of such creditors as would belong to persons of like rank in other States whose rights are recognized in this State, but that they shall not on their application, be denied the right to file bonds in any court of the State with an interest for their support in the event of their own inability to do so. The legislature has taken an oath of office and solemnly affirmed to the people that they will protect and promote the right of any citizen to keep their debts and to sue for their debts; and the purpose of the clause is to make sure that we know we are not taking away the rights of other citizens, so that we can maintain them to the same extent as they are protected in other States. ‎R.

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Kings New York Section 262 of the Delaware General Corporation Law