Series 79 practice questionmediumSqueeze-Out Mergers and Appraisal Rights
Which of the following best describes a 'short-form' merger under Delaware law?
- AA merger requiring shareholder approval regardless of ownership percentage
- BA merger available to companies with at least a 75% ownership of the target
- CA merger that grants automatic appraisal rights to all shareholders
- DA merger executed by a parent holding at least 90% of a subsidiary’s shares without a shareholder vote✓ Correct answer
Explanation
Why D — A merger executed by a parent holding at least 90% of a subsidiary’s shares without a shareholder vote
Under Delaware law, a parent owning at least 90% can complete a short-form merger without a shareholder vote, but dissenting shareholders may have appraisal rights. Confusing the threshold or requirements could mislead about minority protections.
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