Last Friday's post concerned the status of the de facto merger doctrine in California. The late Harold Marsh Jr. made the following observation about the de facto merger doctrine in his magnum opus:
"It is of course possible to label any sale of assets for stock a 'de facto merger,' since they are merely different techniques to accomplish the same result. It can with equal logic (although perhaps not equal justice) be argued that a merger is a 'de facto sale of assets' and that therefore shareholders of the surviving corporation should be deprived of the voting and dissenters' rights. Apparently no one had the temerity to rely upon that argument, however . . .".
Marsh's California Corporation Law § 19.01[B]. Professor Marsh goes on to conclude that the current General Corporation Law eliminated uncertainty regarding the procedural aspects of reorganization transactions by reason of "its uniform rules applicable to all three types of transactions [merger, exchange and sales of assets] and to transactions going in both directions". Id.
Note to readers: I have written or updated portions of Marsh's book. However, I have not contributed to Chapter 19.