GoodCents Common Stockholders Can Get Share of Merger Proceeds

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By Yin Wilczek

The $57 million that preferred stockholders received when GoodCents Holdings Inc. merged into AM Conservation Group Inc. in 2015 should have been shared with common stockholders, the Delaware Chancery Court said June 7 ( In re GoodCents Holdings Inc. , 2017 BL 192383, Del. Ch., No. 11723-VCMR, 6/7/17 ).

The ruling provides helpful guidance on how the Delaware courts will interpret corporate charters and bylaws.

Vice Chancellor Tamika Montgomery-Reeves rejected GoodCents preferred stockholders’ argument that the merger triggered a provision that gave them the right to the entire merger consideration.

GoodCents was a privately held Delaware corporation that sets up energy-efficiency programs for companies and residents. Its common stockholders asked the court in December 2015 to appraise the fair value of their shares because they received none of the monies paid to preferred stockholders after GoodCents merged with AM Conservation.

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Susan Jenkins at sjenkins@bna.com

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