The statute usually answers three questions before an appraiser reads a financial statement: which date, which techniques, and which adjustments are barred. The fourth question — whether the claim was perfected — is answered by a calendar that closed months earlier.
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Appraisal is where the Institute’s premise is easiest to see, because the legislature has written the appraiser’s instructions down. A Model Act definition, verbatim in Virginia at §13.1-729 and in Iowa at §490.1301(3), fixes the valuation moment immediately before the effectiveness of the corporate action, directs the use of customary and current concepts and techniques generally employed for similar businesses in the context of the transaction, and bars discounting for lack of marketability or minority status — with an express exception most secondary writing omits. Delaware solved the same problem the opposite way: §262(h) names fair value, defines nothing, and excludes value arising from the transaction, leaving every remaining question to the courts. Both drafting choices are reviewed as questions of law. Neither is the appraiser’s to make.
Six features of the appraisal remedy that are settled before a valuation engagement begins.
Appraisal attaches only to corporate actions the statute lists. Virginia’s §13.1-730 is a readable example, and its subdivision A 5 — certain amendments to the articles of incorporation — is the one place the fair value definition in §13.1-729 lets a shareholder-level discount back in.
Fair value under the Model Act text means the value of the shares determined ‘immediately before the effectiveness of the corporate action to which the shareholder objects’, ‘using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal’, and ‘without discounting for lack of marketability or minority status’. Date, method and level of value, in one sentence (Va. Code §13.1-729).
8 Del. C. §262(h) directs the Court of Chancery to determine fair value ‘exclusive of any element of value arising from the accomplishment or expectation of the merger’ and to ‘take into account all relevant factors’. Everything else — including the foundational entitlement to be paid for what was taken, ‘viz. his proportionate interest in a going concern’, from Tri-Continental Corp. v. Battye, 74 A.2d 71, 72 (Del. 1950) — is judge-made.
Under §262 the holder must own the shares at the demand and continuously through the effective date, must not vote in favor or consent in writing, and must serve a separate written demand — a proxy or a vote against is not a demand. Where there is a meeting the demand must arrive before the vote is taken (§262(d)(1)). Where the deal is done by written consent, short-form merger or a §251(h) tender offer there is no vote, and the demand instead follows the company’s notice (§262(d)(2)).
A petition must be filed in the Court of Chancery within 120 days after the effective date, by the dissenter or by the surviving entity; if none is filed in time, ‘the right to appraisal with respect to all shares shall cease’ (§262(e), (k)). Since 2022 a beneficial owner meeting the same holding requirements may demand in their own name under §262(d)(3). A missed step ends the claim before fair value is ever litigated.
Model Act text bars the two shareholder-level discounts by name. Delaware arrives at the same place through case law. In Cavalier Oil Corp. v. Harnett, 564 A.2d 1137 (Del. 1989), the Supreme Court held that in determining a dissenter’s proportionate interest the Court of Chancery ‘is not required to apply further weighting factors at the shareholder level, such as discounts to minority shares for asserted lack of marketability’, because ‘to fail to accord to a minority shareholder the full proportionate value of his shares imposes a penalty for lack of control, and unfairly enriches the majority shareholders who may reap a windfall from the appraisal process by cashing out a dissenting shareholder’. The company is valued first; the fraction is taken afterward.
What the statutory framework does to the analysis that follows it.
Most of these are settled before an appraiser is retained, and most cannot be repaired afterward.
In Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., 210 A.3d 128 (Del. 2019), the Supreme Court ordered judgment at $19.10 per share — ‘the deal price minus the portion of synergies left with the seller’ — against a deal price of $24.67. Section 262(h) excludes merger-arising value, and that exclusion runs in whichever direction the record takes it.
No. Model Act states define it exhaustively and identically enough to be quoted verbatim — the date, the methodology instruction and the discount bar in one sentence (Va. Code §13.1-729; Iowa Code §490.1301(3)). Delaware names the term and defines nothing beyond the exclusion of merger-arising value, so its content is a body of case law rather than a statutory text. Ohio does not use the term at all: its dissenters’ statute entitles the holder to ‘fair cash value’, and since H.B. 48 took effect on 4 May 2012 §1701.85(C)(1)(b) requires that any control premium and any discount for lack of marketability or minority status be excluded from it. Same concept, three drafting solutions, three bodies of authority. Checked September 2026.
By treating the demand as a formality or by assuming there was a vote. Delaware requires a separate written demand, continuous ownership through the effective date, no vote in favor or written consent, and a petition within 120 days of the effective date, after which ‘the right to appraisal with respect to all shares shall cease’ (8 Del. C. §262(e), (k)). The exception most summaries swallow is structural: in a written-consent deal, a short-form merger or a §251(h) two-step tender offer there is no stockholder vote, so the demand does not precede anything — it follows the company’s appraisal notice on the timetable §262(d)(2) sets. A litigator who files first and retains an appraiser second has already chosen the starting point.
Yes, and the reason is the exclusion rather than the arithmetic. In Verition Partners Master Fund Ltd. v. Aruba Networks, Inc., 210 A.3d 128 (Del. 2019), the Delaware Supreme Court entered judgment at $19.10 per share against a $24.67 deal price, describing the figure as the deal price minus the portion of synergies left with the seller. What Dell, Inc. v. Magnetar Global Event Driven Master Fund Ltd., 177 A.3d 1 (Del. 2017), and DFC Global Corp. v. Muirfield Value Partners, L.P., 172 A.3d 346 (Del. 2017), added is narrower than it is usually described: DFC declined to create a presumption that deal price is the best estimate of fair value, and Dell agreed there is no requirement to assign the deal price any mathematical weight. Contested public-company appraisal is covered at economicdamagesinstitute.com.
The court, and the standards of review make the division visible. In Pueblo Bancorporation v. Lindoe, Inc., 63 P.3d 353 (Colo. 2003), the Colorado Supreme Court held that ‘the interpretation of statutory language is a question of law which we consider de novo’ and that the meaning of fair value is ‘a question of law, not a question of fact to be opined on by appraisers and decided by the trial court’. What follows is treated very differently: an appraisal award is reviewed for abuse of discretion with significant deference to the trial court’s findings (Fir Tree Value Master Fund, LP v. Jarden Corp. (Del. 9 July 2020)). Delaware also forbids the court from simply picking a side — Gonsalves v. Straight Arrow Publishers, Inc., 701 A.2d 357 (Del. 1997), reversed an either/or approach as at odds with §262’s command that the court shall appraise fair value.
Describe the corporate action, the forum and the dates. The Institute will help you see what the appraisal provision has already fixed and what is still open.