Corporate Appraisal and Dissenters'-Rights Procedure in Tennessee

At a glance

Requirements one by one

Transactions and eligible shares

Tennessee Chapter 23 ties payment rights to specified mergers, share exchanges, substantially-all asset sales outside regular business, charter changes affecting named share rights, conversions, and rights added by the charter, bylaws, or board resolution (§ 48-23-102(a)(1)–(6)). For a meeting or written consent, the merger, exchange, and sale routes depend on whether the holder can vote or would have been entitled to vote without consenting (§ 48-23-102(a)(1)(A)); the parent-subsidiary merger is separately listed (§ 48-23-102(a)(1)(B)). A registered-exchange or national-market-system security is excluded as of the transaction's effective date (§ 48-23-102(c)).

Ownership and notices

The statute defines a beneficial shareholder separately from a record shareholder (§ 48-23-101(1), (6)). A record holder asserting rights for only some registered shares must cover all shares beneficially owned by a particular person and identify that person to the corporation. A beneficial holder proceeding directly needs the record holder's written consent and must cover all same-class shares held or vote-controlled (§ 48-23-103(a)–(b)). For later notice and payment steps, the defined corporation can include the merger or conversion survivor or share-exchange acquirer (§ 48-23-101(2)). The meeting notice must say whether rights are, are not, or may be available and, when applicable, include Chapter 23; written-consent notices follow their own recipient and timing rules (§ 48-23-201(a), (c)).

Votes, form, and payment

At a meeting, the holder must give written intent before the vote and must not vote the shares in favor; under less-than-unanimous written consent, the holder must not sign a favorable consent (§ 48-23-202(a)–(c)). After effectiveness, the corporation sends a dissenters' notice and form within 10 days. Its return date must fall 40 to 60 days after mailing; the notice also sets the certificate-deposit place and date (§ 48-23-203(a)–(b)). The holder must demand payment, certify acquisition timing, and deposit certificates as directed. Missing the demand or required deposit defeats payment (§ 48-23-204(a), (c)). The corporation generally pays its estimate plus interest when the action is effective or the demand arrives, whichever is later, with financial statements and an interest explanation (§ 48-23-206(a)–(b)). Its payment estimate must meet or exceed the estimate in the dissenters' notice (§ 48-23-206(b)(2)).

Disputed amount and court

An eligible dissenter can make a written supplemental demand after a disputed payment or offer, a missed payment, or a failure to return certificates or release restrictions; the demand must reach the corporation within one month after payment or offer (§ 48-23-209(a)–(b)). If it remains unsettled, the corporation must petition an equity court within two months after receipt or pay the demanded amount. The court may appoint appraisers, and the dissenters have ordinary civil discovery rights (§ 48-23-301(a)–(d)).

What trips people up

The corporation may withhold an immediate payment for shares acquired after the announcement date identified in the notice, then make an estimate-and-interest offer instead (§ 48-23-208(a)–(b)). A demand cannot be withdrawn without the corporation's consent (§ 48-23-204(d)). The corporation may restrict transfer of uncertificated shares after receiving a demand (§ 48-23-205(a)). If the transaction does not become effective within two months after the demand/deposit date, certificates must be returned and uncertificated-share transfer restrictions released; a later effective action requires a new notice (§ 48-23-207(a)–(b)).

Common questions

Can a shareholder simply vote no? The statute also requires a separate written intent before a meeting vote; a favorable vote on those shares defeats the payment route (§ 48-23-202(a), (c)).

Does the law set a value? It defines fair value by the moment immediately before the action, excluding anticipation-driven change, and defines interest from the effective date using a six-month Treasury-bill auction measure. It does not decide a particular price (§ 48-23-101(4)–(5)).

Who pays court costs? The court normally assesses proceeding costs against the corporation, but may allocate costs to dissenters who acted arbitrarily, vexatiously, or without good faith; separate standards govern counsel and expert fees (§ 48-23-302(a)–(c)).

Statutes and sources

Tenn. Code Ann. § 48-23-101(1), (3)–(7)

(1) “Beneficial shareholder” means the person who is a beneficial owner of shares held by a nominee as the record shareholder;

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-101(2)

(2) "Corporation" means the issuer of the shares held by a dissenter before the corporate action, and, for purposes of §§ 48-23-203---48-23-302, includes the survivor of a merger or conversion or the acquiring entity in a share exchange of that issuer;

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-102(a)(1)(B), (4)–(5), (b)–(c)

(B) If the corporation is a subsidiary that is merged with its parent under § 48-21-105;

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-102(a)(1)(A), (2)–(3), (6)

(A) If shareholder approval is required for the merger by § 48-21-104 or the charter and the shareholder is entitled to vote on the merger if the merger is submitted to a vote at a shareholders' meeting or the shareholder is a nonconsenting shareholder under § 48-17-104(b) who would have been entitled to vote on the merger if the merger had been submitted to a vote at a shareholders' meeting; or

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-103(a)–(b)

A record shareholder may assert dissenters' rights as to fewer than all the shares registered in the record shareholder's name only if the record shareholder dissents with respect to all shares beneficially owned by any one (1) person and notifies the corporation in writing of the name and address of each person on whose behalf the record shareholder asserts dissenters' rights. The rights of a partial dissenter under this subsection (a) are determined as if the shares as to which the partial dissenter dissents and the partial dissenter's other shares were registered in the names of different shareholders.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-201(a)–(d)

Where any corporate action specified in § 48-23-102(a) is to be submitted to a vote at a shareholders' meeting, the meeting notice (including any meeting notice required under chapters 11-27 to be provided to nonvoting shareholders) must state that the corporation has concluded that the shareholders are, are not, or may be entitled to assert dissenters' rights under this chapter. If the corporation concludes that dissenters' rights are or may be available, a copy of this chapter must accompany the meeting notice sent to those record shareholders entitled to exercise dissenters' rights.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-202(a)–(c)

Must deliver to the corporation, before the vote is taken, written notice of the shareholder's intent to demand payment if the proposed action is effectuated; and

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-203(a)–(b)

If a corporate action requiring dissenters' rights under § 48-23-102(a) becomes effective, the corporation must send a written dissenters' notice and form required by subdivision (b)(1) to all shareholders who satisfy the requirements of § 48-23-202(a) or § 48-23-202(b). In the case of a merger under § 48-21-105, the parent must deliver a dissenters' notice and form to all record shareholders who may be entitled to assert dissenters' rights.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-204(a)–(d)

A shareholder sent a dissenters' notice described in § 48-23-203 must demand payment, certify whether the shareholder acquired beneficial ownership of the shares before the date required to be set forth in the dissenters' notice pursuant to § 48-23-203(b)(2), and deposit the shareholder's certificates in accordance with the terms of the notice.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-205(a)–(b)

The corporation may restrict the transfer of uncertificated shares from the date the demand for their payment is received until the proposed corporate action is effectuated or the restrictions released under § 48-23-207.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-206(a)–(b)

Except as provided in § 48-23-208, as soon as the proposed corporate action is effectuated, or upon receipt of a payment demand, whichever is later, the corporation shall pay each dissenter who complied with § 48-23-204 the amount the corporation estimates to be the fair value of each dissenter's shares, plus accrued interest.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-206(b)(2)

, which estimate shall equal or exceed the corporation's estimate given pursuant to § 48-23-203(b)(2)(C)

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-207(a)–(b)

If the corporation does not effectuate the proposed action that gave rise to the dissenters' rights within two (2) months after the date set for demanding payment and depositing share certificates, the corporation shall return the deposited certificates and release the transfer restrictions imposed on uncertificated shares.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-208(a)–(b)

A corporation may elect to withhold payment required by § 48-23-206 from a dissenter unless the dissenter was the beneficial owner of the shares before the date set forth in the dissenters' notice as the date of the first announcement to news media or to shareholders of the principal terms of the proposed corporate action.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-209(a)–(b)

A dissenter may notify the corporation in writing of the dissenter's own estimate of the fair value of the dissenter's shares and amount of interest due, and demand payment of the dissenter's estimate (less any payment under § 48-23-206), or reject the corporation's offer under § 48-23-208 and demand payment of the fair value of the dissenter's shares and interest due, if:

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-301(a)–(e)

If a demand for payment under § 48-23-209 remains unsettled, the corporation shall commence a proceeding within two (2) months after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If the corporation does not commence the proceeding within the two-month period, it shall pay each dissenter whose demand remains unsettled the amount demanded.

Accessed 2026-10-04.

Tenn. Code Ann. § 48-23-302(a)–(c)

The court in an appraisal proceeding commenced under § 48-23-301 shall determine all costs of the proceeding, including the reasonable compensation and expenses of appraisers appointed by the court. The court shall assess the costs against the corporation, except that the court may assess costs against all or some of the dissenters, in amounts the court finds equitable, to the extent the court finds the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment under § 48-23-209.

Accessed 2026-10-04.