A shareholder wishes to exercise appraisal rights in a merger under Delaware law. Which of the following steps is required to properly perfect those rights?
- AVote in favor of the merger but file a written objection within 30 days after closing
- BDemand appraisal before the vote, do not vote yes, and petition within 120 days✓ Correct answer
- CSimply abstain from voting on the merger; no further action is needed
- DSell the shares on the open market before the merger closes
Why B — Demand appraisal before the vote, do not vote yes, and petition within 120 days
Under DGCL Section 262, a shareholder must follow specific procedural steps to perfect appraisal rights: deliver a written demand for appraisal to the corporation before the vote, not vote in favor of the merger (voting against or abstaining is acceptable), continuously hold the shares through the merger's effective date, and file a petition in the Delaware Court of Chancery within 120 days. Failure to comply with any of these requirements results in the loss of appraisal rights, and the shareholder receives the merger consideration instead.
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 995+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
- An earnout provision in an acquisition agreement provides for:
- In a two-step acquisition, a hostile bidder first conducts a tender offer and then completes a back-end merger to…
- A buyer acquires a biotechnology company for $200 million upfront plus an earnout of up to $100 million contingent on…
- Under Delaware General Corporation Law Section 253, a parent corporation that owns at least what percentage of a…
- An investment banker is structuring an earnout for the acquisition of a software company. The seller insists on…
- Appraisal rights allow dissenting shareholders in a merger to:
- In an acquisition agreement, representations and warranties primarily serve to:
- Under the MFW framework established by the Delaware Supreme Court, a controlling shareholder going-private transaction…