The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies

Includes bibliographical references. === The triangular merger structures provide an innovative and effective method for avoiding the voting and concomitant appraisal rights of a holding company’s shareholders. This is because, by incorporating and making use of a wholly owned subsidiary company to...

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Bibliographic Details
Main Author: Kershoff, Marko Daniel
Other Authors: Yeats, Jacqueline
Format: Dissertation
Language:English
Published: University of Cape Town 2015
Subjects:
Online Access:http://hdl.handle.net/11427/12900
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spelling ndltd-netd.ac.za-oai-union.ndltd.org-uct-oai-localhost-11427-129002020-10-06T05:11:17Z The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies Kershoff, Marko Daniel Yeats, Jacqueline Commercial Law Includes bibliographical references. The triangular merger structures provide an innovative and effective method for avoiding the voting and concomitant appraisal rights of a holding company’s shareholders. This is because, by incorporating and making use of a wholly owned subsidiary company to effect the proposed transaction, the holding company is deemed not to be a party to the amalgamation or merger agreement; even though the transaction is instigated and financed by it. Importantly, and as a result of the fact that the holding company is able to distance itself from the transaction, its shareholders are deprived of their voting and appraisal rights, thereby allowing said company to effectively avoid the usual cash drain resulting from the exercise of shareholder appraisal rights. It is argued that companies must not be allowed to make use of and exploit the separate legal personality of a shell subsidiary company solely to circumvent the rights of their shareholders. Failing specific legislative intervention to curtail this potential abuse, shareholders of the holding company ought to be able to successfully challenge the implementation of a triangular merger by (i) applying to court in terms of s 20(9) of the Act (the theory behind this being that the triangular merger structures propose the use of a separate legal entity as a device or stratagem to defeat their rights); and/or (ii) filing a complaint with the relevant statutory body citing the provisions of s 115(4) of the Act. In either case, and as an alternative submission, shareholders can also argue that such conduct falls within the parameters of the statutory oppression remedy. 2015-05-27T04:07:19Z 2015-05-27T04:07:19Z 2014 Master Thesis Masters LLM http://hdl.handle.net/11427/12900 eng application/pdf University of Cape Town Faculty of Law Department of Commercial Law
collection NDLTD
language English
format Dissertation
sources NDLTD
topic Commercial Law
spellingShingle Commercial Law
Kershoff, Marko Daniel
The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies
description Includes bibliographical references. === The triangular merger structures provide an innovative and effective method for avoiding the voting and concomitant appraisal rights of a holding company’s shareholders. This is because, by incorporating and making use of a wholly owned subsidiary company to effect the proposed transaction, the holding company is deemed not to be a party to the amalgamation or merger agreement; even though the transaction is instigated and financed by it. Importantly, and as a result of the fact that the holding company is able to distance itself from the transaction, its shareholders are deprived of their voting and appraisal rights, thereby allowing said company to effectively avoid the usual cash drain resulting from the exercise of shareholder appraisal rights. It is argued that companies must not be allowed to make use of and exploit the separate legal personality of a shell subsidiary company solely to circumvent the rights of their shareholders. Failing specific legislative intervention to curtail this potential abuse, shareholders of the holding company ought to be able to successfully challenge the implementation of a triangular merger by (i) applying to court in terms of s 20(9) of the Act (the theory behind this being that the triangular merger structures propose the use of a separate legal entity as a device or stratagem to defeat their rights); and/or (ii) filing a complaint with the relevant statutory body citing the provisions of s 115(4) of the Act. In either case, and as an alternative submission, shareholders can also argue that such conduct falls within the parameters of the statutory oppression remedy.
author2 Yeats, Jacqueline
author_facet Yeats, Jacqueline
Kershoff, Marko Daniel
author Kershoff, Marko Daniel
author_sort Kershoff, Marko Daniel
title The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies
title_short The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies
title_full The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies
title_fullStr The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies
title_full_unstemmed The triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies
title_sort triangular merger structures: the use of the forward and reverse triangular merger structures to circumvent the voting and appraisal rights of minority shareholders and potential shareholder remedies
publisher University of Cape Town
publishDate 2015
url http://hdl.handle.net/11427/12900
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