Juan Monteverde on Appraisal Rights and the Pursuit of Fair Value After a Merger

A merger premium looks generous on announcement day. The offer sits well above the prior close, and the board recommends approval.

Juan E. Monteverde, founding partner of Monteverde & Associates PC in New York, has long argued that a premium on the share price doesn’t make the price fair. Shareholders can get more than the stock was trading for and still be underpaid relative to what the company was worth. 

For investors who think that’s happened to them, appraisal rights are one of the few legal tools that put the question directly to a court.

What Appraisal Rights Are

In many states, shareholders who object to a cash merger can turn down the deal price and petition a court to determine the fair value of their shares. Delaware, where a large share of U.S. public companies are incorporated, lays out the process in Section 262 of its General Corporation Law.

A shareholder who properly pursues appraisal gives up the merger consideration and instead receives whatever the court decides the shares were worth, plus statutory interest. The court values the company as a going concern and excludes any value created by the merger itself, so the focus stays on what the business was worth on its own terms, apart from the transaction.

Monteverde has described appraisal as a powerful tool for shareholders who want fair value. It’s a demanding one as well, and its rules tend to favor shareholders who move early.

Why a Premium Can Still Fall Short

A premium is measured against the market price, which isn’t always a reliable guide to what a company is actually worth. A stock may have been trading low because of a temporary setback, a broad market decline, or projections the public hadn’t seen yet. A sizable premium over a depressed price can still leave shareholders with less than the company was worth.

The sale process matters as well. In Monteverde’s experience, many of the losses shareholders suffer in mergers trace back to a board’s failure to get the best price available. 

A board that reaches out to only one or two buyers, accepts the first serious offer, or runs a compressed timeline may never find out what a competitive process would have produced. In fair value litigation, those choices are often where the question of what the shares were worth begins.

The Steps That Decide Eligibility

Appraisal isn’t automatic. Under Delaware law, shareholders who want to preserve the right generally have to follow a set sequence:

• Deliver a written demand for appraisal to the company before the shareholder vote.
• Refrain from voting in favor of the merger.
• Hold the shares continuously through the date the merger takes effect.
• Make sure a petition is filed with the Delaware Court of Chancery within 120 days after the merger becomes effective.

Missing any one of these steps can forfeit the right entirely. Shareholders who hold through a broker should find out early how their demand will be made, because the process can take longer than many investors expect.

There are limits on who qualifies. In stock-for-stock deals involving shares listed on a national exchange, appraisal is often unavailable unless shareholders are required to accept cash or certain other consideration. For listed companies, Delaware also restricts appraisal when the demanding shares make up a very small portion of the total, measured by both percentage and dollar value. In a tender offer followed by a second-step merger, appraisal is generally available to the shareholders who chose not to tender.

Appraisal or a Class Action

Appraisal is one route, and a class action is another. Juan Monteverde has pointed to both as ways shareholders can respond to an underpriced deal.

They work differently. Appraisal is a valuation proceeding brought by the shareholders who demanded it, and they carry the cost and the risk of the outcome. Delaware courts have, in some cases, set fair value at or below the deal price, so a dissenting shareholder can end up with less than those who accepted the merger consideration.

A class action centers on conduct. It typically alleges that directors breached their fiduciary duties or that shareholders didn’t get the material information they needed, and it seeks relief on behalf of everyone affected. Since the claims are pooled, an investor with a modest position can benefit without carrying the cost of litigation alone.

The right path depends on the facts of the deal, the size of the holding, and how early the shareholder spots the concern. The decision often has to be made before the vote, which is another reason to read the proxy carefully when it arrives.

A Career Focused on What Shareholders Receive

Monteverde’s practice has centered on change-in-control transactions such as mergers and buyouts. From 2010 to 2016, he was a partner and chair of the Mergers and Acquisition Litigation Department at Faruqi & Faruqi LLP, following earlier work as an associate at Levi & Korsinsky representing investors in securities and consumer fraud matters.

That work has continued at his own firm, Monteverde & Associates PC. His results include a $7.5 million post-close cash settlement as lead counsel in In Re Hansen Medical, Inc. and a $6.5 million cash settlement in Riche v. Pappas, which involved a U.S.-based geothermal buyout. In 2025, he secured $32.1 million for shareholders in merger class actions, including a $27.5 million common fund settlement for Aimmune Therapeutics, Inc. stockholders under Section 14 of the Exchange Act. The firm is listed in the Top 50 of the ISS Securities Class Action Services Report.

Super Lawyers named him a Super Lawyer from 2022 to 2024, and Martindale-Hubbell rated him a top-rated lawyer for six straight years, from 2017 to 2022.

What Shareholders Can Do Before the Vote

It’s worth thinking about fair value before the merger closes. After the deal is complete and the deadlines have passed, the options narrow a great deal.

The proxy statement is a good place to start. Its section on the background of the merger shows how many buyers were contacted and how the price developed. The financial advisor’s analysis lays out the valuation ranges the board saw. The notice of appraisal rights, which Delaware companies must include, explains the deadlines and the procedure.

If the price looks low next to those materials, it’s worth getting advice on securities and merger litigation early, while every option is still on the table.

A premium tells shareholders how the offer compares with the market price. Juan Monteverde has built his practice around testing that number for shareholders, and appraisal is one way the law lets them test it themselves.