Exercise Of Delaware Appraisal Rights Still A Long And Uncertain Process

When minority stockholders feel as if they have not received fair value as the price in a "cash-out merger" transaction, they often consider seeking appraisal rights for their stock. In a recent decision, Highfields Capital, Ltd., Highfields Capital I, L.P. and Highfields Capital II, L.P. v. AXA Financial, Inc., Del. Ch. August 17, 2007, reaffirms many of the tenants of Delaware law with respect to appraisal rights and indicates that the appraisal process in Delaware remains a long and uncertain process.

In the case, Highfields sought appraisal rights with respect to the July 8, 2004 acquisition of The MONY Group, Inc. by AXA pursuant to a cash-out merger at $31 per share. After more than three years of appraisal proceedings, Vice-Chancellor Lamb, concluded that "the fair value of [Highfield's] stock on the date of the merger was $24.97 per share" (plus 6.2% interest from July 8, 2004).