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Corporate Law

In re GGP, Inc. Stockholder Litigation

Delaware Supreme Court Reverses Dismissal for Shareholders Seeking Appraisal in Merger with Preclosing Dividend.

Enacted in 1899 to replace the mandate that consolidations receive unanimous shareholder approval,1×1. Dell, Inc. v. Magnetar Glob. Event Driven Master Fund Ltd, 177 A.3d 1, 19 (Del. 2017). section 262 of the Delaware General Corporation Law2×2. Del. Code Ann. tit. 8, § 262(a) (2022). provides dissenting investors of merger targets with “appraisal rights” that entitle them to a judicially determined valuation of their shares.3×3. See id. (“Any stockholder . . . who has [not] voted in favor of the merger . . . shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares . . . .”). Once a “sleepy backwater” of corporate law,4×4. Guhan Subramanian, Appraisal After Dell, in The Corporate Contract in Changing Times: Is the Law Keeping Up? 222, 222 (Steven Davidoff Solomon & Randall Stuart Thomas eds., 2019). the statute has received growing attention as it has become an increasingly vital safeguard against director exploitation.5×5. Id. at 235 (“Appraisal is the only . . . check against a deficient deal process.”). Despite appraisal’s “disciplinary effect,”6×6. Steven J. Cleveland, Appraisal Rights and “Fair Value,” 43 Cardozo L. Rev. 921, 965 (2022). the Delaware Supreme Court has lately reined in the doctrine’s potency with decisions enforcing contractual waivers of such rights7×7. See Manti Holdings, LLC v. Authentix Acquisition Co., 261 A.3d 1199, 1204 (Del. 2021). and limiting valuations to the transaction’s price.8×8. See Dell, Inc. v. Magnetar Glob. Event Driven Master Fund Ltd, 177 A.3d 1, 35 (Del. 2017); DFC Glob. Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346, 349 (Del. 2017). In In re GGP, Inc. Stockholder Litigation,9×9. 282 A.3d 37 (Del. 2022). the court further clarified the statute by applying it to a novel merger providing a substantial “pre-closing dividend” conditional on the deal’s success.10×10. Id. at 48; see GGP Inc., Definitive Proxy Statement (Schedule 14A), at 207 (June 26, 2018) [hereinafter GGP Proxy]. While the shareholders prevailed,11×11. See In re GGP, 282 A.3d at 44. the narrow survival of the motion to dismiss with unanswered concerns in the dissent raises doubts about the longevity of appraisals.

In 2017, mall operator GGP, Inc. (GGP) entered strategic merger negotiations with real estate company Brookfield Property Partners, L.P. (Brookfield).12×12. See GGP Proxy, supra note 10, at 21, 58–60. During these parties’ correspondence, Brookfield insisted the agreement include an “appraisal rights closing condition” that would have permitted it to terminate the deal if a certain number of shares exercised appraisal rights.13×13. Id. at 72–74. But GGP rejected these requests, and the parties eventually reached a proposal (later approved by 94% of votes unrelated to Brookfield14×14. See GGP Inc., Current Report (Form 8-K), Item 5.07(1) (July 26, 2018). ) offering $23.50 per share without the clause.15×15. GGP Proxy, supra note 10, at 70, 76. Importantly, in its 344-page proxy statement, GGP disclosed Brookfield would conduct its acquisition through a “pre-closing dividend” — forming 98.5% of the deal price16×16. In re GGP, Inc. S’holder Litig., C.A. No. 2018-0267, 2021 WL 2102326, at *1 (Del. Ch. May 25, 2021).  — followed by a trivial “per share merger consideration” shortly thereafter.17×17. See GGP Proxy, supra note 10, at 5–6, 56; In re GGP, 282 A.3d at 48–49. The proxy cautioned that shareholders were “entitled to exercise appraisal rights solely in connection with the merger”18×18. GGP Proxy, supra note 10, at 15 (emphasis added). and contained a section titled “Appraisal Rights in the Merger”19×19. Corporations subject to section 262 must notify shareholders of their appraisal rights. Del. Code Ann. tit. 8, § 262(d)(1) (2022). (Appraisal Rights Notice) stating the following:

If the [merger is] completed, GGP common stockholders who comply exactly with the applicable requirements and procedures of Section 262 . . . will be entitled to demand appraisal of their GGP common stock and receive in lieu of the per share merger consideration a cash payment equal to the “fair value” of their GGP common stock . . . . [A]ppraised value may be greater than, the same as or less than the per share merger consideration.20×20. GGP Proxy, supra note 10, at 335 (emphasis added).

Taking issue with the italicized language,21×21. Appellants’ Corrected Opening Brief at 37, In re GGP, 282 A.3d 37 (No. 202, 2021). several shareholders sued Brookfield and various GGP leaders in the Delaware Chancery Court,22×22. Consolidated Verified Third Amended Stockholder Class Action Complaint ¶¶ 1, 22–35, In re GGP, Inc. S’holder Litig., C.A. No. 2018-2067 (Del. Ch. May 25, 2021). claiming the defendants designed “a contrived scheme to dissuade [plaintiffs] from exercising appraisal,” as investors could seemingly seek “only 1.5% of the [total merger] consideration.”23×23. Id. ¶ 304. They accordingly alleged the defendants breached their fiduciary duty by either “failing to provide . . . a fair summary of” such rights or “intentional[ly] thwarting” them altogether.24×24. Id. ¶¶ 303, 305. This claim would entitle the plaintiffs to “quasi-appraisal,” a doctrine extending the remedy to those “who, by tendering their shares on a materially uninformed basis, were prevented from seeking appraisal.” Gilliland v. Motorola, Inc., 873 A.2d 305, 311 (Del. Ch. 2005).

Writing for the court, Vice Chancellor Slights stated he could consider the preclosing dividend as a “relevant factor” in his appraisal25×25. In re GGP, 2021 WL 2102326, at *31. Delaware’s appraisal-rights statute directs the Chancery Court to “take into account all relevant factors” when “determining . . . fair value.” Del. Code Ann. tit. 8, § 262(h) (2022) (emphasis added). and conceded the proxy “could have been more clearly drafted.”26×26. In re GGP, 2021 WL 2102326, at *33. Nevertheless, since the Appraisal Rights Notice encouraged investors to seek counsel and “reflect[ed] the unremarkable observation that . . . the court’s adjudicated valuation is difficult to predict,” he held the proxy properly disclosed appraisal rights and dismissed the claim.27×27. Id. at *32.

The Delaware Supreme Court reversed in relevant part.28×28. In re GGP, 282 A.3d at 71. The court affirmed four dismissals without discussion, id., as three claims relied on the incorrect premise of Brookfield being a controlling shareholder, In re GGP, 2021 WL 2102326, at *24, and the remainder alleged unjust enrichment, id. at *35. Writing for the majority, Justice Traynor29×29. Justice Traynor was joined by Chief Justice Seitz and Justice Valihura. first recounted that the court cannot affirm a dismissal if the plaintiff would “be entitled to recover under any reasonably conceivable set of circumstances.”30×30. In re GGP, 282 A.3d at 54 (emphasis added) (quoting Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Holdings LLC, 27 A.3d 531, 535 (Del. 2011)). Emphasizing that the Court of Chancery must conduct appraisals by estimating “the value of the corporation at the time of the merger as if it had not occurred,”31×31. Id. at 57 (citing Cede & Co. v. Technicolor, Inc., 684 A.2d 289, 298 (Del. 1996)). the court concluded a proper valuation should include the preclosing dividend, as this payment was conditioned on the merger’s approval.32×32. Id. at 59–60; GGP Proxy, supra note 10, at 207 (“[T]he consummation of . . . the pre-closing dividend will be conditioned upon . . . receipt by GGP of a written notice from [Brookfield] to the effect that all conditions set forth in the merger agreement have been satisfied . . . .”). And although acceptance of merger consideration normally constitutes a forfeiture of the shareholder’s appraisal right,33×33. See Del. Code Ann. tit. 8, § 262(k) (2022) (“[N]o person who has demanded appraisal rights . . . shall be entitled . . . to receive payment of dividends or other distributions . . . .”). the plaintiffs did not waive this power by receiving the mandatory preclosing dividend.34×34. In re GGP, 282 A.3d at 61. Indeed, Delaware’s appraisal-waiver provision contains an explicit exception for “dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger.” Tit. 8, § 262(k).

Justice Traynor next reiterated that corporate directors must “disclose fully and fairly all material information,”35×35. In re GGP, 282 A.3d at 62 (quoting Stroud v. Grace, 606 A.2d 75, 84 (Del. 1992)). which Delaware courts define as information raising “a substantial likelihood that a reasonable stockholder would consider it important in deciding how to vote.”36×36. Id. at 63 (quoting Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 142 (Del. 1997)). Analyzing the Appraisal Rights Notice, he labeled the disclosure “misleading,” as it “explicitly correlated” the fair value of investors’ shares with just the per-share merger consideration and suggested the pre-closing dividend would be excluded.37×37. Id. at 66. Justice Traynor then deemed such misinformation material because it obfuscated GGP’s valuation to shareholders and conceivably caused some to believe they could not qualify for appraisal under a de minimis exception in Delaware law.38×38. Id. at 66–67. The relevant portion of the de minimis exception reads as follows: [The Court of Chancery] shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal, [or] (2) the value of the consideration provided in the merger, consolidation or conversion for such total number of shares exceeds $1 million . . . . Tit. 8, § 262(g).

Addressing the defendants’ assertion that they need not share “speculat[ion] about how a court might decide hypothetical legal issues,”39×39. Appellees’ Answering Brief at 3–4, In re GGP (No. 202, 2021). the court held the proxy already contained legal advice through its Appraisal Rights Notice and was thereby “required to be correct and complete” in such disclosures.40×40. In re GGP, 282 A.3d at 69. Finally, given Brookfield’s earlier attempts to include an appraisal-rights closing condition and the defendants’ failure to supply an alternative justification for their transaction’s structure, Justice Traynor found sufficient evidence of such misleading information being intentional for the plaintiffs’ claims to survive dismissal.41×41. Id. at 70–71. While “good faith erroneous judgment” of a disclosure concerns the duty of care, Zirn v. VLI Corp., 681 A.2d 1050, 1062 (Del. 1996), intentional violations implicate the duty of loyalty, O’Reilly v. Transworld Healthcare, Inc., 745 A.2d 902, 915 (Del. Ch. 1999). GGP’s charter exculpates directors from personal liability for breaches of fiduciary duty, GGP Inc., Second Amended and Restated Certificate of Incorporation 4 (May 17, 2017), but Delaware forbids extending such exculpation to the duty of loyalty, tit. 8, § 102(b)(7)(i).

Dissenting in part, Justice Montgomery-Reeves42×42. Justice Montgomery-Reeves was joined by Justice Vaughn. agreed with both treating the preclosing dividend as merger consideration and concluding that the receipt of such payment did not waive appraisal rights.43×43. In re GGP, 282 A.3d at 71 (Montgomery-Reeves, J., concurring in part and dissenting in part). However, stressing that omitted facts “must contribute meaningfully to the ‘total mix’ of information available” to be material,44×44. Id. at 73 (quoting Ehlen v. Conceptus, Inc., C.A. No. 8560, 2013 WL 2285577, at *2 (Del. Ch. May 24, 2013)). she took issue with Justice Traynor labeling the proxy “misleading” for three reasons.45×45. Id. at 79. First, the Appraisal Rights Notice explicitly mentioned just the per-share merger consideration because it “accurately reflect[ed]” that shareholders need not forgo the preclosing dividend to exercise appraisal.46×46. Id. at 74–75. Second, other disclosures in the proxy expressly considered this dividend part of the transaction’s total consideration,47×47. E.g., GGP Proxy, supra note 10, at 6 (“[A]s a result of receiving the pre-closing dividend and the per share merger consideration, unaffiliated GGP common stockholders . . . will be entitled to receive . . . total consideration of up to $23.50 . . . .” (emphases added)). thereby adequately asserting the payment was “‘in connection with’ the merger.”48×48. In re GGP, 282 A.3d at 77 (Montgomery-Reeves, J., concurring in part and dissenting in part). Lastly, considering the clarity in Delaware’s laws on appraisal rights49×49. See, e.g., La. Mun. Police Emps.’ Ret. Sys. v. Crawford, 918 A.2d 1172, 1192 (Del. Ch. 2007) (applying section 262 to a dividend conditional on a merger’s approval because “the label ‘special dividend’ [was] simply cash consideration dressed up in a none-too-convincing disguise”). and the plaintiffs’ compelling argument that the proxy elsewhere included the preclosing dividend in merger consideration, shareholders could not reasonably conclude that an appraisal would exclude such a distribution.50×50. In re GGP, 282 A.3d at 78–79 (Montgomery-Reeves, J., concurring in part and dissenting in part). Justice Montgomery-Reeves ended by stating that, even if the proxy misguided some investors into believing they fell within Delaware’s de minimis exception, the plaintiffs waived such an argument by failing to specifically raise it in their complaint to the Chancery Court.51×51. Id. at 79; see Del. Sup. Ct. R. 8 (“Only questions fairly presented to the trial court may be presented for review . . . .”). Consequently, she would have affirmed the dismissal of their claims.52×52. In re GGP, 282 A.3d at 71 (Montgomery-Reeves, J., concurring in part and dissenting in part).

In re GGP seemingly involved fact-specific debates over a novel merger inconsequential to corporate law overall, but its wanting defense of appraisal rights more broadly signaled the doctrine’s waning protection against exploitative consolidations. Just one vote shy of a majority,53×53. See id. at 42 (syllabus); id. at 71 (Montgomery-Reeves, J., concurring in part and dissenting in part). the dissent sought to reject such rights through narrow interpretations of the proxy and overconfidence in investors’ legal expertise. Combined with the court’s enforcement of appraisal-rights waivers54×54. See Manti Holdings, LLC v. Authentix Acquisition Co., 261 A.3d 1199, 1204 (Del. 2021). and tendency to center valuations around the transaction’s price,55×55. See Dell, Inc. v. Magnetar Glob. Event Driven Master Fund Ltd, 177 A.3d 1, 19 (Del. 2017); DFC Glob. Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346, 349 (Del. 2017); Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., 210 A.3d 128, 142 (Del. 2019). the dissent would introduce another avenue to curtail the doctrine with misleading disclosures — further threatening this safeguard for minority shareholders.56×56. See Subramanian, supra note 4, at 235.

The dissent first misapplied Delaware’s “reasonably conceivable” pleading standard by finding undue clarity in the proxy. Beginning with the Appraisal Rights Notice, the dissent correctly interpreted this section’s first mention of the per-share merger consideration to describe an exception in Delaware’s appraisal-waiver law.57×57. In re GGP, 282 A.3d at 74–75 (Montgomery-Reeves, J., concurring in part and dissenting in part). But this reading does not extend to the proxy’s later statement that “appraised value may be greater than, the same as or less than the per share merger consideration.”58×58. GGP Proxy, supra note 10, at 335. Although shareholders need only forgo the per-share merger consideration to qualify for appraisal, the correct reference frame for the appraised value should include the preclosing dividend.59×59. This is especially true as courts increasingly defer to deal prices in appraisals. See Wei Jiang et al., The Long Rise and Quick Fall of Appraisal Arbitrage, 100 B.U. L. Rev. 2133, 2166–67 (2020). Additionally, regarding the dissent’s finding that the proxy elsewhere implied the preclosing dividend was “in connection with the merger,”60×60. In re GGP, 282 A.3d at 75 (Montgomery-Reeves, J., concurring in part and dissenting in part). this construal does not eliminate other feasible interpretations.61×61. While “reasonably conceivable” is inherently subjective, the court has described it as “broad,” Spence v. Funk, 396 A.2d 967, 968 (Del. 1978), and lower than the federal “plausibility” standard, see Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Holdings LLC, 27 A.3d 531, 537 (Del. 2011). Such a generous test should intuitively allow multiple readings of the same complicated document. Indeed, one need look no further than the proxy’s defined terms as shareholders could have inferred “per share merger consideration”62×62. GGP Proxy, supra note 10, at vi (emphasis added). to include all payments “in connection with the merger,”63×63. Id. at 15. The proxy cautions that its “headings . . . are for convenience of reference purposes only and shall not affect . . . the meaning or interpretation of [the proxy] or any term or provision thereof.” Id. at A-20. But even if the defined term “per share merger consideration” constitutes a “heading,” some of the proxy’s substantive disclosures, such as the Appraisal Rights Notice, could still confuse interpretations of the preclosing dividend. implying excluded disbursements — such as the preclosing dividend — would be left out. From this phrase and the Appraisal Rights Notice, it is “reasonably conceiv-able” the proxy misled investors into thinking the preclosing dividend would not be considered in a valuation. But according to the dissent, shareholders should have easily been able to eliminate such confusion by relying on the proxy’s limited accurate portrayals in its 344 pages of information.64×64. Despite its corporate law expertise, see Rochelle C. Dreyfuss, Forums of the Future: The Role of Specialized Courts in Resolving Business Disputes, 61 Brook. L. Rev. 1, 28–29 (1995), even the majority described the proxy as a “deeply challenging read,” In re GGP, 282 A.3d at 48.

The dissent then transcended the defendants’ communications to assert that alternative interpretations of shareholders’ appraisal rights were not reasonably conceivable because of the sufficient clarity in Delaware’s statute and precedent — a conclusion striking for several reasons. First, the dissent found that prior cases unquestionably extended to, and overwhelmingly supported, the preclosing dividend’s inclusion in an appraisal even though the court had never before addressed this matter.65×65. In re GGP, 282 A.3d at 77 (Montgomery-Reeves, J., concurring in part and dissenting in part). The dissent engaged with two cases: Louisiana Municipal Police Employees’ Retirement System v. Crawford, 918 A.2d 1172 (Del. Ch. 2007), and In re Dollar Thrifty Shareholder Litigation, 14 A.3d 573 (Del. Ch. 2010). In re GGP, 282 A.3d at 77–78 (Montgomery-Reeves, J., concurring in part and dissenting in part). While both support the preclosing dividend’s inclusion in an appraisal, neither supplies identical disputes; the former held that such a payment triggers appraisal rights without addressing if it would be included in the valuation, Crawford, 918 A.2d at 1191–92, whereas the latter did not involve an appraisal altogether, In re Dollar Thrifty, 14 A.3d at 575–78. The dissent next took issue with the plaintiffs’ “convincing[] argu[ment] that the [p]re-[c]losing [d]ividend is merger consideration” because it inherently contradicted their simultaneous assertion that the proxy was misleading.66×66. In re GGP, 282 A.3d at 78 (Montgomery-Reeves, J., concurring in part and dissenting in part). However, such claims are not mutually exclusive; on one hand, shareholders can advocate for the preclosing dividend’s inclusion in an appraisal by leveraging Delaware law and some of the proxy’s text while, on the other, arguing the defendants muddied this realization in other conveyances.67×67. The dissent stated that the plaintiffs “point[] to at least two portions of the Proxy that support” including the preclosing dividend in an appraisal, id., but the proxy could dilute the conspicuousness of both disclosures — and elsewhere provide conflicting inferences — given its length. But above all, when taken to its extreme, the dissent’s logic would render the proxy’s required appraisal-rights disclosures irrelevant altogether. If the court can expect shareholders to recognize when Delaware law would override a corporation’s incorrect analysis, such information would lose its purpose as a disclosure.68×68. See Omri Ben-Shahar & Carl E. Schneider, The Failure of Mandated Disclosure, 159 U. Pa. L. Rev. 647, 720 (2011) (noting mandated disclosure is intended to “give people good information”). Beyond imposing a burdensome mandate of legal expertise on retail investors,69×69. Some scholars have noted that shareholders seeking appraisal tend to be sophisticated rather than merely “Grandma and Grandpa.” E.g., Subramanian, supra note 4, at 238–39. Even still, this premise of high shareholder competence reflects a larger shift in regulatory power from courts to markets as sophisticated institutional investors become increasingly influential. See generally Zohar Goshen & Sharon Hannes, The Death of Corporate Law, 94 N.Y.U. L. Rev. 263 (2019). the dissent’s standard would problematically enable firms to share misleading information under the façade of transparency.

Through its flawed counterarguments, the dissent advanced a new route for corporations to further curtail appraisals. Recently, the court has narrowed this doctrine by allowing contractual waivers of appraisal rights70×70. See Manti Holdings, LLC v. Authentix Acquisition Co., 261 A.3d 1199, 1204 (Del. 2021). and tying valuations to the deal’s price.71×71. See Dell, Inc. v. Magnetar Glob. Event Driven Master Fund Ltd, 177 A.3d 1, 19 (Del. 2017); DFC Glob. Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346, 349 (Del. 2017); Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., 210 A.3d 128, 142 (Del. 2019). While such cases impose substantive limits on the remedy, the dissent exhibited receptiveness to a procedural restraint: misleading disclosures. Moreover, this new technique presents the most damaging constraint yet: whereas precedent allows investors to either “price in” contractual waivers ex ante72×72. Cf. Guhan Subramanian, Fixing Freezeouts, 115 Yale L.J. 2, 27 (2005) (noting, for freezeouts, that “an ex ante pricing adjustment . . . should, on average, compensate minority shareholders fairly, which is all that is needed to address equity concerns and preserve allocational efficiency”). or seek valuations with de facto ceilings,73×73. See Ben Lucy, Note, Defining Appraisal Fair Value, 106 Va. L. Rev. 1183, 1217 (2020) (stating the court “sets a presumptive cap on appraisal fair value awards: the unaffected trading price”). the dissent threatened to eliminate appraisal rights wholesale and ex post. Namely, facing this procedural blockade in addition to their already costly litigation,74×74. See Lucian Arye Bebchuk, Limiting Contractual Freedom in Corporate Law: The Desirable Constraints on Charter Amendments, 102 Harv. L. Rev. 1820, 1853–54, 1854 n.54 (1989) (discussing the relatively high cost of appraisal-rights litigation relative to shareholders’ typical recovery). otherwise-dissenting shareholders could plausibly determine the legal expenditures of an appraisal to outweigh its expected recovery.75×75. Although future plaintiffs might more easily establish a disclosure as misleading by citing to In re GGP, such precedent simultaneously strengthens the dissent’s argument that shareholders should have independently identified the clarity in Delaware’s appraisal-rights doctrine. In re GGP, 282 A.3d at 77–78 (Montgomery-Reeves, J., concurring in part and dissenting in part). Alternatively, some might fall prey to the deceptive information and mistakenly believe the judiciary’s valuation would be nominal.76×76. Despite the potential for a quasi-appraisal, the court has explicitly extended this remedy to all shareholders on an opt-out basis for only short-form mergers. See Berger v. Pubco Corp., 976 A.2d 132, 144–45 (Del. 2009); see also Del. Code Ann. tit. 8, § 253(a) (2022) (requiring that an acquirer hold at least ninety percent of the target’s shares before conducting a short-form merger). In other contexts, investors might be required to opt into a quasi-appraisal — preserving the risk that mistaken shareholders fail to pursue the remedy. Berger, 976 A.2d at 143. In either scenario, the shareholders would forgo appraisal even though they would have exercised such rights — and initially bought their shares with the confidence of this doctrine’s perceived protection — absent a misleading disclosure.

On a broader level, this split decision illustrated the continued decline of appraisals. Delaware’s legislature originally adopted the doctrine to protect shareholders from perceived inadequate deal prices,77×77. Dell, Inc. v. Magnetar Glob. Event Driven Master Fund Ltd, 177 A.3d 1, 19 (Del. 2017). and appraisals continue to deliver such insurance by effectively setting a price floor on negotiations.78×78. Albert H. Choi & Eric Talley, Appraising the “Merger Price” Appraisal Rule, 34 J.L. Econ. & Org. 543, 570 (2018) (noting appraisals “protect[] the dissenting shareholders’ rights after the fact” and “affect[] their interest ex ante[] by imposing a de facto price floor . . . on bidding”). Empirical research indicates merger targets receive higher deal premia after events strengthening appraisal remedies without a corresponding deterrent effect on the likelihood of consolidation,79×79. Audra Boone et al., Merger Negotiations in the Shadow of Judicial Appraisal, 62 J.L. & Econ. 281, 314 (2019) (concluding appraisals confer “an important protection” for shareholders). suggesting these actions aid all shareholders rather than just dissidents. Yet none of the Justices addressed these benefits — including the majority. Instead, they narrowly reversed the shareholders’ dismissal without ever acknowledging the doctrine’s greater significance. Considering the precarious outlook of appraisals,80×80. See Charles Korsmo & Minor Myers, The Flawed Corporate Finance of Dell and DFC Global, 68 Emory L.J. 221, 224 (2018) (stating that the court’s recent cases “risk[] smothering the fledgling utility of the appraisal remedy in its crib”). such a marginal decision fails to decelerate the remedy’s fading relevance. Should a similar case arise with stronger facts for the defendants, the dissent could plausibly garner another vote to maintain this decline. In particular, Brookfield’s efforts at an appraisal-rights closing condition81×81. See GGP Proxy, supra note 10, at 72–74. possibly increased skepticism toward the proxy, and another merger could involve a comparably confusing disclosure without such documented attempts.82×82. In any event, this alteration would enable defendant directors to waive monetary liability. See Roberta Romano, Corporate Governance in the Aftermath of the Insurance Crisis, 39 Emory L.J. 1155, 1160–61 (1990) (finding over ninety percent of sampled Delaware firms waived liability within one year of the legislature allowing the waivers). But even accepting this seeming shareholder victory on its face, the split decision still signaled the court’s rising reluctance toward robust appraisal rights.

Although the shareholders in In re GGP prevailed, their reversal of a motion to dismiss by one vote hardly forms a resounding success. Rather, it demonstrates the continuously dwindling potency of Delaware’s appraisal rights. By shoehorning clarity into the proxy, the dissent muddied the prospects of future appraisals and invited corporations to dilute such rights through procedural creativity. Without further clarity on the topic, shareholders will only be further dissuaded from leveraging this doctrine — stifling a once-meaningful barrier against corporate exploitation.83×83. Charles R. Korsmo & Minor Myers, Appraisal Arbitrage and the Future of Public Company M&A, 92 Wash. U. L. Rev. 1551, 1598 (2015) (deeming appraisal “a back-end check on abuses”). Given the court’s gradual erosion of such so-called rights, section 262 seems destined for the sleepy backwater from which it came.