The Uncertain Case for Appraisal Arbitrage

This Article presents a skeptical, though not dismissive, view of appraisal arbitrage. While there are benefits associated with appraisal litigation, the Article introduces both economic theory and empirical evidence demonstrating that increased levels of appraisal arbitrage also create efficiency costs and distributional concerns. Given the need to balance these costs and benefits, the Article presents a principled basis for modifying the appraisal litigation process to allow for privately ordered fee-shifting: target companies can opt-out of the American Rule in exchange for a heightened burden of proof