Until relatively recent times, the generally accepted rule was that a corporation could not merge, consolidate or sell all of its assets without the unanimous consent of its stockholders. Each stockholder was accordingly vested with an individual right of veto over any such corporate action from which that stockholder might dissent. In order to eliminate this shackle on corporate activity, state legislatures enacted legislation permitting corporations to enter into such so-called "extraordinary transactions" as mergers, consolidations and sales of all or substantially all of the corporate assets upon some specified majority vote of all of its stockholders. The price extracted for this accommodation is the ability of dissenting stockholders to perfect a right to object that would enable their stock interests to be repurchased by the corporation for the value of that interest.
Howard T. Macrae Jr.,
Dissenting Stockholders' Rights in Virginia: Exclusivity of the Cash-Out Remedy and Determination of "Fair Value",
U. Rich. L. Rev.
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