A senior associate at a Delaware shop I work with sent me a closing schedule last week that read like a confession. The buyer’s deal team had pushed hard to lock the stockholder vote on Day Zero, the moment the merger agreement was signed. The selling-side preferred holders had cooperated — they had executed an action-by-written-consent under DGCL § 228 the same hour the merger agreement was signed, and a written consent on a 70% majority closes the corporate-approval question in Delaware almost immediately. The associate’s note to me was short. “We have signed and consented but we still cannot close for nineteen days.” That is the bottleneck nobody plans for.
The reflex among private-company deal lawyers is to collect the stockholder consent as fast as the signature page can be routed. The reflex is wrong half the time. The 20-day notice window in § 228(e), read against the appraisal-rights mechanics in § 262, frequently makes back-loading the consent — or, more accurately, sequencing it carefully against the signing — the path to a faster close. The timing analysis is not difficult, but it is rarely run.
What § 228 actually requires
The basic framework will be familiar. Subchapter VII of the DGCL permits a Delaware corporation, by written consent of the holders of the minimum number of shares that would have been required to approve the action at a meeting, to take corporate action without a meeting. For a merger, that minimum is generally a majority of the outstanding stock entitled to vote, unless the certificate of incorporation requires more. The consent becomes effective when the last consenting signature carries the vote over the threshold and the consents are delivered to the corporation.
What § 228(e) then requires is that the corporation send prompt written notice of the taking of the corporate action to those stockholders who did not consent. For a merger, the notice obligation is overlaid by § 262(d)(2), which requires that the corporation notify each stockholder who did not consent and who is otherwise entitled to appraisal that the merger has been approved and that appraisal rights are available. That § 262(d)(2) notice must be sent within ten days after the effective time of the merger — but counsel almost always wants to give that notice before the closing, so that the 20-day appraisal-election window can run before the merger is consummated and the appraisal landscape is settled.
The interaction of these two notice obligations is where the timing puzzle sits. The first notice — the bare § 228(e) consent notice — must be prompt; the better practice is to send it the same day the consent is delivered. The second notice — the § 262(d)(2) appraisal notice, often combined with the § 228(e) notice in a single mailing for efficiency — starts the appraisal-election clock running. Stockholders have 20 days from the date of the notice to demand appraisal. Until that 20-day window closes, the merger consideration cannot be paid out to the appraisal-eligible holders without risk that the appraisal demand window will be argued to have been impermissibly truncated.
Why front-loading consent is the slower path
The mistake in the closing schedule the associate sent me — and it is a common mistake — was to put the consent at signing rather than at, or just before, closing. If the consent is at signing, the 20-day appraisal-notice window starts running 20 days before any other condition to closing has been satisfied. If the parties cannot close within 20 days of signing for any reason — and most middle-market deals cannot, because of regulatory waiting periods, financing conditions, third-party consents, or estoppel-letter cycles — the appraisal-notice window expires before closing. The corporation has effectively burned its appraisal-notice clock during a period when nothing useful was happening.
That is not necessarily fatal. The merger can still close after the appraisal-notice window has run, and appraisal demands that were timely made are tracked and paid out at the closing or shortly thereafter. But the timing creates two real problems.
First, the appraisal demands are quantified before closing and before the merger consideration is finalized. A stockholder who is on the fence about appraisal has to decide in the abstract, before seeing what the actual closing cash payment will look like net of working-capital adjustments, indemnity escrow, and the various other adjustments that turn an “$X per share” price tag into the actual wire on closing day. Sophisticated stockholders sometimes use this asymmetry to lean toward appraisal in the abstract and then negotiate withdrawal in exchange for some marginal value. A back-loaded notice — given after the closing-day economics are largely fixed — produces fewer protective-appraisal demands.
Second, the front-loaded consent locks the deal in. After the consent is effective, the selling-side preferred holders who delivered the consent have, as a practical matter, given up the ability to demand additional consideration if the deal terms shift during the period between signing and closing. That is sometimes what the buyer wants — the buyer is paying for certainty of closing and wants the stockholder approval locked. But for the selling-side holders, it is a meaningful concession of leverage, and the seller’s lawyers should understand that they are conceding it when they paper the consent at signing.
The right framework
The right framework is to ask three questions before scheduling the consent.
First, how long is the period between signing and the expected closing? If the period is short — under 20 business days, with closing certainty on the regulatory and consent items — consent at signing works fine, and the appraisal window can close at or near the closing. If the period is long — 30 days, 60 days, longer — front-loaded consent wastes the clock and forces stockholders to make appraisal elections without complete information.
Second, what is the buyer’s risk on a closing-condition failure? If the buyer is closing-walk-risk-averse and the merger agreement has the equivalent of a “ticking fee” or material adverse change protection for the buyer, the buyer may insist on locking the consent at signing. That can be a fair trade if the seller gets adequate certainty of closing on the buyer’s side in return. If the buyer’s closing conditions are loose and the seller is bearing closing risk, the seller should resist tying up the consent until the closing conditions are substantially satisfied.
Third, what is the appraisal exposure profile of the stockholder base? In a deal with a tight holder group of insiders and rollover holders, appraisal exposure is functionally zero, and the timing of the appraisal-notice window does not matter much. In a deal with a meaningful tail of cashed-out minority holders — common in any company that has taken on outside capital across multiple rounds and is now selling — appraisal risk is real and the timing of the notice matters quite a bit. Recent Chancery practice has continued to refine the burden-of-proof and fair-value frameworks in appraisal cases, and the empirical reality is that minority holders in middle-market private deals occasionally take appraisal seriously and force a fair-value litigation. The notice-timing choice is one of the small structural moves that influences that exposure.
The combined notice in practice
In a well-structured deal, the consent and notice sequence usually looks like this. Signing of the merger agreement is Day Zero. The stockholder consent under § 228 is executed contemporaneously, but the consent is held in escrow or otherwise not delivered to the corporation until the closing conditions are substantially in hand — typically 20 to 30 days before the expected closing. Once the consent is delivered to the corporation and the corporate action is taken, the § 228(e) and § 262(d)(2) combined notice goes out the same day. The 20-day appraisal-election window runs. The closing happens at the end of, or shortly after, the 20-day window, with appraisal-electing shares carved out of the closing-day payout.
Counsel sometimes pushes back on this approach on the ground that holding the consent in escrow creates uncertainty about whether the corporate action has been validly taken. That concern is overstated. The consent does not become effective until it is delivered, and delivery is a controlled act. Holding executed signature pages pending delivery is procedurally clean and legally well-supported. The reluctance to do it is usually a function of habit rather than risk.
For Delaware practitioners closing private deals in 2026, the timing framework is worth refreshing every time. The temptation to lock the consent on Day Zero comes from a buyer-protective instinct that is occasionally appropriate and often counterproductive. Running the analysis before papering the consent is a small lift, and the deals where it changes the answer are deals where the change saves the parties real money and real friction.
Our M&A work regularly involves Delaware-target transactions for both buy-side and sell-side clients, and the consent-and-notice sequencing question is one of the standard items on our closing-schedule audit. The broader corporate-governance practice covers the related questions on board-resolution timing, conflict-of-interest cleansing, and stockholder-disclosure architecture that interact with the § 228 sequence.
If you are private-company counsel mapping out the consent and notice sequence on a pending Delaware-target merger and trying to figure out whether front-loading or back-loading the § 228 consent gets you to a faster, cleaner close, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
— John
