[Gaming Merger] Calvin and Daniella each own 5% of GamePower, a video game design company. GamePower is seeking to merge with GameKing, and before a shareholder meeting, Calvin and Daniella email all other shareholders and corporate representatives about their disagreement with the proposed transaction. At the shareholder meeting, they vote against the merger with GameKing, but, 90% of the shareholders vote in favor of the merger. Calvin tells Daniella that it is not fair that they are forced to be part of GameKing. Daniella tells him they have no choice, so get used to it.
-What, if any, option do Calvin and Daniella have if they do not want to be part of the merged corporation?
A) As dissenting shareholders, they cannot overrule the majority's vote.
B) They have no options because the law does not protect shareholders from one another.
C) They have no options because 90% of the shareholders voted in favor of the merger, thus, they cannot exercise their appraisal rights.
D) They can exercise their appraisal rights and receive monetary compensation from the corporation for their value.
E) Because 90% of the shareholders voted in favor of the merger, there are no other steps Calvin and Daniella can take.

Question

Quizplus · Accepted Answer

Dissenting shareholders, like Calvin and Daniella, who do not agree with a merger have the right to exercise their appraisal rights in many jurisdictions. This means they can demand to be bought out, receiving the fair market value of their shares instead of being forced to participate in the merger.

[Gaming Merger] Calvin and Daniella Each Own 5% of GamePower