CORPORATIONS - RECAPITALIZATION BY STATUTORY MERGER AND CONSOLIDATION

When changes in the capital structure of a corporation are attempted by amendment or by voluntary reorganization plans, such efforts at recapitalization are often blocked by dissenting stockholders. As a result, attempts have been made to recapitalize and force dissenting stockholders to go along by following the procedure of the merger and solidation statutes. The extent to which these statutes governing merger and consolidation can be used in order to change the capital structure of a corporation will be examined here. This discussion will consider, first, the governing rules concerning possible .changes in a stockholder's interest and rights when two or more independent corporations are merged or consolidated, and second, the application of such rules when recapitalization of a corporation is attempted by merger or consolidation with a wholly owned subsidiary.