In re GGP, Inc. Stockholder Litig.

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Full Text of Court Cases
July 19, 2022
6512 Operators of Nonresidential Buildings
531190 Lessors of Other Real Estate Property
shareholder dissent/oppression
fair value, appraisal, disclosure, merger, stock, dividends, fiduciary duty, shareholders

In re GGP, Inc. Stockholder Litig.
2022 Del. LEXIS 211; 2022 WL 2815820
United States
State Court
Delaware
Supreme Court
Seitz, Valihura, Vaughn, Traynor, Montgomery-Reeves

Summary

Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield paid a sizable preclosing dividend followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.

See Also

The Delaware Chancery Court Erred in Dismissing Claims Regarding Appraisal Rights Disclosures in a Merger—Supreme Court Remands

Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield funded a sizable preclosing dividend which was paid by GGP to eligible shareholders, followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.