Natural Food Corporation proposes to combine with Organic Produce Inc., and asks Natural Food shareholders to vote on the proposal. Pi, a Natural Food shareholder, votes against it, but is outvoted by the other shareholders. Is there an action that Pi can take to avoid being forced to go along with the transaction? If so, what can he do? After the combination, Organic Produce ceases to exist. Natural Food is the surviving firm. What type of combination is this?

Pi, and any other shareholder who disapproves of a merger (or a consolidation), may seek, and may be entitled to be paid, fair value for his or her shares. This right to seek fair value is known as appraisal rights. It constitutes the exclusive remedy for shareholders that are dissatisfied with the price that they received for their stock in the circumstances in this problem, and exists only in those states that specifically provide for it.
The procedure for asserting this right varies. Generally, the corporation must notify the shareholders of the right's availability, and the dissenting shareholders must file a notice of intent to demand payment with the corporation before the shareholders vote on the transaction. The corporation must make a written offer to buy the shares, accompanying the offer with a current balance sheet and income statement. The "fair value" is normally the value on the day before the date on which the shareholders' vote is taken. If the parties do not agree on "fair value," however, a court may determine it. These rights will be lost if they are not adhered to strictly.
The combination between Natural Food and Organic Produce is a merger, in which one of the previously existing corporations (Natural Food)absorbed the other and the absorbed corporation (Organic Produce)ceased to exist.