Hariton v. Arco Electronics, Inc.

Arco Electronics (defendant) and Loral Electronics entered a shareholder-approved "reorganization agreement" under Delaware's asset-sale statute, section 271, under which Loral would acquire all of Arco's assets, issue 283,000 shares to Arco's shareholders, and Arco would then dissolve. Hariton (plaintiff), an Arco shareholder, sued to enjoin the deal, arguing it was really a disguised merger and unlawfully denied him appraisal rights he would have gotten under Delaware's merger statute. The Court of Chancery granted Arco summary judgment, and Hariton appealed.