Under corporate law, shareholders dissatisfied with certain extraordinary transactions, such as corporate mergers, may dissent from those transactions and require the corporation to purchase the dissenters' shares for their fair value. This lesson discusses those rights, known as dissenter's or appraisal rights. The lesson covers both Delaware law and the Model Business Corporation Act and discusses what appraisal rights are, when those rights are available to shareholders, and the procedures for enforcing appraisal rights. It does not get into the difficult questions involved in actually valuing corporate shares, and it does not discuss procedural issues that arise in appraisal litigation.
This lesson does not explain the different types of business combinations or the legal requirements for doing those transactions, including voting rights. Separate CALI lessons, "Types of Business Combinations" and "Voting Rights in Extraordinary Transactions," cover those topics. This lesson is the third in the series, and students are advised to complete those two lessons before attempting this one, unless they are already familiar with those topics.
This lesson also does not deal with fiduciary duty issues that arise in business combinations. That topic is also the subject of separate CALI lessons. Students do not need to complete those lessons before attempting this one.