Series 79 practice questionmediumSqueeze-Out Mergers and Appraisal Rights
In a Delaware short-form merger where a parent owns at least 90% of a subsidiary, which right is available to minority shareholders?
- AThe right to force renegotiation of merger terms
- BThe right to block the merger by court action
- CThe right to demand automatic conversion to preferred shares
- DThe right to seek judicial appraisal of their shares✓ Correct answer
Explanation
Why D — The right to seek judicial appraisal of their shares
Minority shareholders in a short-form merger can seek judicial appraisal for fair value of their shares. Other options misstate the rights available under Delaware law in such transactions.
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