What are appraisal proceedings, and what valuation risks do they create after an M&A closing?

a court review process in which minority shareholders can challenge the adequacy of a cash compensation or settlement. Use cases:

• Squeeze-outs (a 90–95% holder compulsorily buying out minorities).
• Domination / profit-transfer agreements.
• Mergers with a cash settlement.
• Integrations. Process: specialized courts, duration 3–7 years. Risk: the court can revise the compensation upward (typically +5–25%, occasionally +50%+). The correction applies retroactively to ALL minority shareholders, not just the claimants. Valuation implication: in a squeeze-out valuation, budget an "appraisal-proceedings safety buffer" typically 10–15% above the expert statutory-standard value — the buyer accepts the premium to reduce appraisal-proceedings risk.