Series 79 practice questionhardSqueeze-Out Mergers and Appraisal Rights
In a Delaware short-form merger where a parent owns 90% of a subsidiary, which of the following statements about appraisal rights is correct?
- AAppraisal rights are always unavailable in short-form mergers.
- BHolders of the subsidiary generally have appraisal rights unless they accept the merger consideration✓ Correct answer
- CAppraisal rights only exist if the parent is a foreign corporation.
- DAppraisal rights are not triggered if the consideration is all cash.
Explanation
Why B — Holders of the subsidiary generally have appraisal rights unless they accept the merger consideration
In Delaware, minority shareholders in a short-form merger typically have appraisal rights unless they accept the merger consideration. The trap in this question is to assume short-form mergers always eliminate appraisal rights, which is incorrect.
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