# kaal:claim:3017612-022

**Claim.** Contractual consent to a cash out does not extinguish fiduciary claims: a minority shareholder who agreed to receive cash for shares may still challenge the merger as a breach of fiduciary duty.

**Type.** failure  **Support.** evidenced

**Holds when.**

- close corporations
- merger structured to eliminate a minority shareholder
- Third Circuit in Coleman v. Taub

**Source quote.**

> The merger agreement allowed the company to give the minority shareholder cash in exchange for shares, but the Third Circuit determined that even if a minority shareholder agrees to a cash out, he may still object to the merger on grounds of a breach of fiduciary duty.

**From.** Wulf A. Kaal, *Shareholder Agreements - National Report of the United States of America* (2017), III.1 Shareholders' Agreements on Shareholder Rights, page 11

**Cite as.** Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

**Verify.** sha256 of source PDF `33821db406f92efbe1698fbaed37687595c13b7ce5463b4a879df679fd4af1ac` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Shareholder%20Agreements%20-%20National%20Report%20of%20the%20United%20States%20of%20America.pdf

**Failure mode.** consent-does-not-waive-fiduciary-claim  (family: investor-protection-gap)

**Topics.** corporate-governance

**Keywords.** fiduciary-duty, freeze-out, cash-out-merger, minority-protection

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