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Simple English definitions for legal terms
appraisal remedy
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A quick definition of appraisal remedy:
Appraisal remedy: When a company wants to do something big, like merge with another company, some shareholders might not agree with the decision. In this case, those shareholders have the right to ask a judge to decide how much their shares are worth. The company then has to buy back those shares at the price the judge decides. This is called the appraisal remedy, and it's a way for shareholders to protect their investment if they don't agree with what the company is doing.
A more thorough explanation:
Definition: Appraisal remedy is a legal right given to shareholders of a corporation who disagree with a major corporate decision, such as a merger or acquisition. This right allows shareholders to have their shares evaluated by a court-appointed appraiser and demand that the corporation buy back their shares at the appraised value.
Examples:
- When Company A decides to merge with Company B, some shareholders may not agree with the decision. These shareholders can exercise their appraisal remedy and demand that their shares be bought back at the appraised value.
- If a corporation decides to sell a significant portion of its assets, shareholders who oppose the decision can use the appraisal remedy to have their shares evaluated and demand a buyback at the appraised value.
These examples illustrate how the appraisal remedy works in practice. Shareholders who disagree with a major corporate decision can use this legal right to protect their investment and ensure that they receive fair compensation for their shares.