A proceeding under Delaware's appraisal statute, Del. Code Ann. tit. 8, § 262, requires that the Court of Chancery determine the "fair value" of the dissenting stockholders' shares.
An appraisal action followed a short form merger of corporation into plaintiff oil corporation. The defendant rejected plaintiff's offer for defendant's shares in the corporation, electing instead to assert his appraisal rights. The appraisal proceedings were tried in the Court of Chancery, which entered judgment fixing the value of defendant's stock. Plaintiff's principal contention on appeal was that the Court of Chancery erred in valuing a corporate opportunity claim asserted by defendant because the assertion of this claim was barred by res judicata and not otherwise assertable in a statutory appraisal proceeding. Plaintiff also appealed from the refusal of the vice chancellor to apply a minority discount in valuing the stock.
Did the Court of Chancery err in valuing a corporate opportunity claim?
The Supreme Court held that the Court of Chancery, in both findings and methodology, correctly applied the standards governing an appraisal proceeding. The Court of Chancery properly valued defendant's corporate opportunity claim, which was not barred by res judicata, and properly refused to discount defendant's minority shareholding.