Merion Capital, L.P. v. 3M Cogent, Inc.
Delaware Court of Chancery
2013 WL 3793896 (2013)
- Written by Lou Gambino, JD
Facts
Following the announcement of a merger involving 3M Cogent, Inc. (defendant) but prior to completion of the merger, Merion Capital, L.P. (Merion) (plaintiff) purchased stock in the target company for the merger. After the announcement, Merion exercised its appraisal right as a dissenting shareholder with respect to the value of its target company stock. Merion sought a determination by the court of the fair value of the stock and payment of that fair value together with statutory interest (a rate equal to the Federal Reserve discount rate plus 5 percent), as calculated pursuant to § 262 of the Delaware General Corporation Law. Pursuant to § 262, unless a court found good cause to determine otherwise, the calculated statutory interest rate accrued from the merger date to the date of payment of the court’s judgment, compounded quarterly. 3M Cogent argued that statutory interest should not be imposed with respect to shares purchased after the merger because it would be an inequitable and unintended result of § 262. 3M Cogent further argued that statutory interest was improper for the period during which, as alleged by 3M Cogent, Merion was unreasonably delaying the case.
Rule of Law
Issue
Holding and Reasoning (Parsons, J.)
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