Kramer Levin Naftalis & Frankel LLP posted on Lexology [$$$] about the availability of so-called drag-along rights in private equity deals, which would require minority shareholders to waive rights to appraisal or otherwise challenge controlling shareholder transactions. According to the post, these drag-along rights  have become standard fare in stockholder or similar agreements for controlling shareholders seeking to avoid post-completion challenges in connection with a merger. In Manti Holdings LLC v. Authentix Acquisition Co., Inc., the Delaware Chancery Court held that waiver of appraisal rights is permitted under Delaware law, “so long as the relevant contractual provisions are clear and unambiguous.” However, the court suggested that in other circumstances, there may be limits to the upfront waivers of appraisal and other shareholder rights that a controlling shareholder may impose on minority shareholders.

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