Compulsory Acquisition of the Interest of a Dissenting Minority Shareholder


  • A. Maurice Flisfeder



The problem of dissenting minority in take-over draws into focus wider issues relating to the nature of corporate organization and the respective rights and obligations of shareholders, as well as the position of the courts in any conflict which may arise. The author examines the Anglo-Canadian approach of compulsory acquisition, with its prerequisite of the forced sale being "bona fide in the interests of the company as whole". This is contrasted to the American ap proach of charter alteration, share redemption, merger, sale of assets to new cor poration, and, perhaps more important, the right to appraisal of shares. It is sug gested that the Anglo-Canadian approach of compulsory acquisition is more convenient method of eliminating dissenting minority than that used in the United States, but that Canada should incorporate the right of appraisal of the American system, and thereby obtain the benefits of both systems.