Law School Resources
Hariton v. Arco Electronics, Inc., (1963)
1. Hariton v. Arco Electronics, Inc., (1963);
pg. 405, briefed 2/24/97
Plaintiff is a stockholder in the Arco corporation.
Arco entered into an exchange of stock for assets
with Loral corporation whereby Arco (target) would
transfer all of its assets and liabilities to Loral
(parent) in exchange for shares of Loral common
stock, pursuant to a Delaware exchange of stock for
assets statute. Thereafter, Arco was dissolved.
Under the Delaware statute, such a transaction does
not allow a stockholder in the acquired corporation
(the target corporation) to have dissenterís
3. Procedural Posture:
Hariton sued to have the transaction declared a de
facto merger, and therefore unlawful because the
merger statute (a different statute) had not been
Whether the transaction in question is a de facto
merger, therefore vesting dissenterís appraisal
rights in the plaintiff.
Although the doctrine of de facto merger has some
equitable merit, the fact that a separate statute
exists in Delaware to allow an exchange of assets
for stock defeats that argument. It would be up to
the legislature to change the statute if desired.
The various statutes of the Delaware corporation law
are independent of each other and a given result may
be accomplished under one section which is not
possible, or is even forbidden under another.