In appraisal rights, if three disinterested persons are to determine fair value, who may be named?

In appraisal rights, if three disinterested persons are to determine fair value, who may be named?

• A. One named by the stockholder
• B. One named by the corporation
• C. One named by the stockholder, another by the corporation, and the third by the two thus chosen.
• D. The court

Answer: (C)

In appraisal rights, the aim is to determine fair value through a neutral panel. The standard setup assigns three disinterested persons: one named by the stockholder, one named by the corporation, and the third named by the two thus chosen. This structure balances influence between the parties and ensures neutrality. The third person acts as an impartial arbitrator to break any deadlock, helping to produce a credible, fair value. Why this fits best: it prevents domination by either side—each party controls one appointment, and the two jointly select the third to complete the panel. This fosters independence and reduces bias, which is essential when valuing shares in a dissenting situation. Choosing all three by one side or all three by the other would tilt the process toward that side, undermining fairness, while court-only appointment is a possible alternative in some rules but not the standard approach described here.

In appraisal rights, the aim is to determine fair value through a neutral panel. The standard setup assigns three disinterested persons: one named by the stockholder, one named by the corporation, and the third named by the two thus chosen. This structure balances influence between the parties and ensures neutrality. The third person acts as an impartial arbitrator to break any deadlock, helping to produce a credible, fair value.

Why this fits best: it prevents domination by either side—each party controls one appointment, and the two jointly select the third to complete the panel. This fosters independence and reduces bias, which is essential when valuing shares in a dissenting situation.

Choosing all three by one side or all three by the other would tilt the process toward that side, undermining fairness, while court-only appointment is a possible alternative in some rules but not the standard approach described here.