DealLawyers.com Blog

Will the new safe harbors for transactions with insiders enacted as part of SB 21 prompt more plaintiffs to pursue appraisal claims in lieu of other challenges to deals?  That’s the argument that Boise Schiller’s Renee Zaytsev makes in this LinkedIn post:

Given SB 21’s safe harbor and the general climate (see DExit), I think we’re more likely to see companies take risks and engage in more conflict transactions/poorer sale processes, which will give rise to better arguments against deferring to the deal price. We may already see this playing out, as there has been a slight uptick in appraisal cases filed in the first half of this year, including what may be the largest appraisal case in Delaware history (Endeavor).

Renee says that the open question is how the Chancery Court will react to these arguments. Will the Court be more receptive in an environment where their ability to equitably review fiduciary duty claims has been limited or, given the current climate, will it be less willing to issue company unfriendly decisions in any setting?

– John Jenkins