The Delaware Court of Chancery recently dismissed corporate mismanagement and breach of fiduciary duty claims filed by a dissenting stockholder, but ordered that the surviving corporation in a merger was required to pay the merger consideration to the dissenting stockholder when the statutory appraisal period expired.
Plaintiffs Ram and Neena Mehta (“Plaintiffs”) owned shares of Smurfit-Stone Container Corporation, which had declared bankruptcy in 2009 and, post-bankruptcy, merged with Rock-Tenn Company in 2011. Plaintiffs made a timely demand for appraisal after the merger announcement but never perfected their statutory rights. In fact, Plaintiffs withdrew their appraisal demand roughly a year after making it, and no other stockholder filed an appraisal petition. Rock-Tenn, however, refused to pay the merger consideration to Plaintiffs unless Plaintiffs agreed to broad settlement terms.