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Funds Prop Up Merger Price Case Filings Despite Risks

June 22, 2018

Bloomberg Law
By Jacob Rund

A handful of investment funds is keeping alive what once was an uber-popular strategy of using the courts to challenge payouts to shareholders of newly acquired companies.

These court challenges — called appraisal petitions — reached an all-time high in the second half of 2016, but declined after Delaware state courts made it tougher for shareholders to wind up with more than they would have received from a merger. Delaware law professors and attorneys predicted that those court decisions would cause such petitions to decrease.

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Sidney Liebesman, a partner in the litigation department of Montgomery McCracken Walker & Rhoads LLP, told Bloomberg Law that appraisal petitions “are certainly riskier now than they’ve ever been” for the petitioner.

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