Shiftan v. Morgan Joseph Holdings, Inc., 57 A.3d 928

Morgan Joseph Holdings, Inc. issued Series A Preferred Stock; petitioners held these shares since 2001 funding.
In 2010 Morgan Joseph merged with Tri-Artisan; new Series A was issued under a new certificate in exchange for old Series A.
Automatic Redemption at $100 per share was triggered on July 1, 2011 under the old certificate’s terms.
Petitioners claimed the July 1 redemption value should be considered in fair value under §262 appraisal.
Morgan Joseph argued Automatic Redemption was not subject to an Excess Cash requirement and should not affect appraisal value.
The court granted petitioners’ partial summary judgment, holding Automatic Redemption not subject to Excess Cash and relevant to appraisal value.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Automatic Redemption is subject to Excess Cash	Petitioners contend Automatic Redemption has no Excess Cash condition.	Morgan Joseph argues § B(5)(c) makes Excess Cash applicable to Automatic Redemptions.	Automatic Redemption not subject to Excess Cash.
Whether July 1, 2011 Redemption should be used in fair value	July 1 redemption is a non-speculative contractual right affecting value.	Merger timing makes the redemption irrelevant to value as of merger.	July 1 Automatic Redemption must be considered in appraisal fair value.

Kaiser Aluminum Corp. v. Matheson, 681 A.2d 392 (Del. 1996) (contra proferentem and investor expectations in stock preferences)
Waggoner v. Laster, 581 A.2d 1127 (Del.1990) (stock preferences strictly construed)
Avatex Corp. v. Rothschild, 715 A.2d 743 (Del.1998) (interpreting stock preferences; parol evidence considerations)
In re Appraisal of Ford Holdings, Inc. Preferred Stock, 698 A.2d 973 (Del.Ch.1997) (waiver of appraisal rights when terms clearly described)
Harrah's Entm't, Inc. v. JCC Holding Co., 802 A.2d 294 (Del.Ch.2002) (extrinsic evidence and electoral rights balancing)