Opinion ID: 2402127
Heading Depth: 1
Heading Rank: 12

Heading: Continental Decided Contract Rights

Text: Our holding in Continental did not suggest that American General, as a warrantholder, had the right to independently pursue claims to establish fair value analogous to those potentially available to stockholders either under a Del.Code Ann. tit. 8, § 262 appraisal action or under a breach of fiduciary theory. [30] Indeed, in Continental, we specifically rejected the argument that the anti-destruction clause granted American General a separate right to establish the fair value of the shares subject to the warrants, through litigation. [31] In response to American General's argument that if it `can establish, with respect to the stock ... owned outright, that the fair value of Continental stock was considerably more than $16.50 per share, American General is also entitled to that higher consideration for the shares subject to its warrants,' we held that American General is entitled to receive only the same merger consideration that the employee-stockholders received, [32] and that American General's right to the same fair price for its shares payable to other shareholders is based solely on its contractual right under [the anti-destruction clause] .... [33] In Continental, when this Court held that a warrantholder had the contractual right to receive the same fair price established in the post-merger proceedings, that holding was made in the context of a post-merger class action proceeding that had been filed and settled by certain stockholders. [34] In this case, if the common stockholders had received more than the original merger consideration ($14) as a result of post-merger class action proceedings, as occurred in Continental, the Warrantholders would be contractually entitled to receive that same higher amount pursuant to Section 2(c) in the Warrants. Only stockholders, however, have standing to bring a post-merger class action proceeding that may increase the amount of merger consideration. Any resulting increased amount would then be paid to both the stockholders and to the Warrantholders who contracted for an anti-destruction clause, such as Section 2(c) of these Warrants. Absent fraud or illegality, appraisal is the exclusive remedy available to minority stockholders who object to a Section 253 short-form merger. [35] For the reasons stated in this opinion, however, any appraisal recovery would only accrue to the benefit of the shareholder who filed an appraisal action. In this case, there were no post-merger class action proceedings that increased the merger consideration paid to the stockholders. Since no stockholder received more than $14 per share as merger consideration, neither can these Warrantholders.