Opinion ID: 2402127
Heading Depth: 1
Heading Rank: 13

Heading: Warrant Contract Defines Property

Text: In addition to their claim that the Warrants implicitly provided the right to a quasi-appraisal proceeding, the plaintiffs argue, in the alternative, that such a right is a form of property under Section 2(c). In the context of the Warrant Contract, the word property follows the words shares and securities, the latter two words being forms of consideration that are typically paid in a merger. The well-established rule of construction, ejusdem generis, is that `where general language follows an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same general kind or class as those specifically mentioned.' [36] Section 2(c) unambiguously provides that the Warrantholders are to receive the same consideration in the Merger that they would have received had they exercised their Warrants before the Merger. In this case, that means the Warrantholders are entitled to receive $14 per share because that is the property received by the minority stockholders of United Artists in the Merger. The minority stockholders' right option to forgo the Merger consideration and pursue an appraisal action was not a property right incident to the ownership of minority shares in the Merger for purposes of Section 2(c). Rather, that right was a statutory right  independent of any contract  that was conferred exclusively upon minority shareholders by Section 262 of the Delaware General Corporation Law. [37] The Court of Chancery properly concluded that United Artists fully complied with Section 2(c) of the Warrant contract by offering the plaintiffs the same property ($14 per share) that was paid to the common stockholders of United Artists in the Merger for each of their Warrants  less the $10 per Warrant exercise price. Accordingly, we hold that the Court of Chancery properly granted the motion to dismiss Count II of the Amended Complaint.