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Legislation has attempted to balance fairly the interests of the dissenting shareholder against the corporation's need to reorganize in response to changing economic conditions. The bull market that lasted through 1972 persuaded many drafters of corporate statutes that a dissenting shareholder's interests were adequately protected if he could sell his shares on the market. Accordingly, they promulgated the stock market exception to limit the situations in which the appraisal remedy might inhibit needed corporate flexibility. Low stock prices during 1973 and 19741 have generated a need to reassess this balancing of interests and to reconsider the desirability of the stock market exception.' This Note engages in such a reassessment. It contends, first, that appraisal has not been an unreasonable burden on corporations and that adjustments in the appraisal procedure can eliminate remaining inequities. Next, it asserts that the stock market exception inadequately protects the dissenting shareholder, since a market might, for a variety of reasons, price a shareholder's stock at less than its intrinsic value. Finally, this Note concludes that an appraisal procedure with modifications, and not the stock market exception, reflects the appropriate balance of corporate and shareholder interests.



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