Chancery Rejects Attempt to Stop Running of Interest in Appraisal Action
On Feb. 12, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery issued a ruling preventing an appraisal defendant from "prepaying" a portion of the merger consideration to an appraisal petitioner in order to lessen the interest payment due on the ultimate award. The decision, Huff Fund Investment Partnership v. CKx, Civil Action No. 6844-VCG (Del. Ch. Feb. 12, 2014), protects a key leverage point for stockholders exercising their statutory appraisal rights, including those engaged in so-called appraisal "arbitrage"—the right to receive significant interest on top of an appraisal award.