Delaware Appraisal Litigation: The Court of Chancery Holds That a Company’s Unaffected Market Price Constitutes “Fair Value”

February 28, 2018

In a recent appraisal decision, Verition Partners Master Fund Ltd. v. Aruba Networks, Inc. (Aruba Networks), the Delaware Court of Chancery awarded 30% less to the shareholders than they would have received had they not sought an appraisal. In Aruba Networks, the Court of Chancery followed recent Delaware Supreme Court guidance and held that the market price of the company’s stock prior to the announcement of the merger (the “unaffected market price”) was the “best evidence” of the value of the entity as a going concern. Although the Vice Chancellor noted that unaffected market price was not the only relevant consideration, this opinion ought to give stockholders pause in their decision to seek appraisal for shares of widely traded, public company stock.

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