This quarter’s issue includes summaries and associated court opinions of selected cases decided in August and September 2021.
Delaware Supreme Court Enforces Sophisticated Investors’ Waiver of Appraisal Rights
Manti Holdings, LLC v. Authentix Acquisition Co., Inc., No. 354, 2020 (Del. Sept. 13, 2021)
The Delaware Supreme Court affirmed the Court of Chancery’s decision to enforce a waiver of appraisal rights included in a stockholders agreement that was executed by “sophisticated parties” and accounted for all shares of the corporation.
In connection with a 2008 transaction, Authentix Acquisition Company, Inc. entered into a stockholders agreement with all holders of the company’s shares (the Stockholders Agreement). The Stockholders Agreement provided that the common stockholders would “refrain from the exercise of appraisal rights with respect to [a board and controller approved] transaction” (the Refrain Obligation). In 2017, a third party acquired Authentix. Under the merger agreement, the petitioners’ stock was canceled and converted into a right to receive merger consideration which, for common stock, was little to no compensation. The petitioners sent timely appraisal demands to Authentix. Authentix reminded the stockholders of the Refrain Obligation and requested withdrawal of the demands. The petitioners refused and filed an appraisal petition in the Court of Chancery. The court granted summary judgment for defendant Authentix and, in a...
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