Forbes has published an article, “Delaware Chancery Court Navigates Around Charging Order Exclusivity And Recognizes Reverse Veil-Piercing”, which discusses the challenges faced by both dissenting stockholders and the corporations that are meant to satisfy their appraisals. The article begins as follows:
Exela Technologies, Inc., is a business automation company which has numerous subsidiaries. Some of these subsidiaries in multiple layers. One of these subsidiaries, SourceHOV Holdings, Inc. XELA-3.5%, (“Holdings”) was involved in a merger of other Exela subsidiaries, in which the surviving company was SourceHOV, LLC, although Holdings survived to hold a membership interest in SourceHOV.
There was, however, a slight problem with the merger: Stockholders having 10,304 common shares of Holdings dissented from the merger, and asked — as allowed by Delaware law — that their shares be subject to a statutory appraisal, and that they be paid the appraised value. That appraised value turned out to be $57.7 million, and the shareholders were awarded a judgment for that amount against Holdings.
Click here to see the full article: “Delaware Chancery Court Navigates Around Charging Order Exclusivity And Recognizes Reverse Veil-Piercing”
Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.