Chancery Court Confirms Beneficial Owner’s Standing to Pursue Appraisal Action
By David Bernstein and Meredith Laitner
Amid debates around the merits of “appraisal arbitrage,” the Chancery Court held in In re: Appraisal of Ancestry.com, Inc. that the hedge fund petitioner did not need to prove that the Ancestry.com shares of which it became the beneficial owner after the record date for voting on an Ancestry merger had not been voted in favor of the merger in order to pursue appraisal rights with regard to those shares. The Court said any problems with DGCL Section 262 itself should be solved by the legislature, not the courts.
On January 5, 2015, the Delaware Chancery Court issued its ruling in In re: Appraisal of Ancestry.com Inc., C.A. No. 8173-VCG (Del. Ch. January 5, 2015) (Glasscock, V.C.), finding that petitioner Merion Capital L.P., the beneficial owner of Ancestry.com, Inc. shares, did not need to prove that the specific Ancestry shares with respect to which petitioner seeks appraisal were not voted in favor of an Ancestry merger in order to have standing to seek appraisal.