BVR's Guide to Fair Value in Shareholder Dissent, Oppression and Marital Dissolution

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Preview the Table of Contents & Excerpt from BVR's Guide to Fair Value in Shareholder Dissent, Oppression and Marital Dissolution

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For a list of links to full texts of court case opinions related to Fair Value Dissent and Oppression, click on the heading below.

Fair Value



Statutory Fair Value of Real Estate Holding Co. Includes Transaction Costs, Taxes

Brynwood Co. v. Schweisberger, 2009 WL 2218728 (Ill. App. 2 Dist.)(July 23, 2009)(unpublished) Several professional tenants in a commercial office formed a C corporation to purchase the property in 1979. The owner of an accounting firm took a lead interest (26%), served on the board of directors, and provided the company’s accounting services until he retired in 1996. The remaining shareholders’ interests ranged from 11% to 14%. The company owned and operated the building as its sole asset for nearly twenty-five years when the directors considered converting to an S corporation, primarily to avoid double taxation (at the corporate and shareholder level). The board also discussed selling the building and dissolving the company. The building was appraised five times, with values ranging from $850,000 to $1.43 million. In 2000, the company repurchased the shares of two non-tenant owners at $42.50 per share. During the next year, it offered to repurchase the interests of all non-tenant owners, including the retired accountant, for $48.50 to $50.00 per share. Click here to read the rest of this abstact.

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Bonus article by Douglas K. Moll: Shareholder Oppression and “Fair Value”: Of Discounts, Dates, AND Dastardly Deeds in the Close Corporation

The doctrine of shareholder oppression protects a close corporation minority investor from the improper exercise of majority control. When a minority shareholder establishes “oppressive”majority conduct, a court typically orders the majority to purchase the minority’s stock at its “fair value.” But what does fair value mean? Further, when is fair value to be measured? The questions are critical ones that affect the lives of countless close corporation investors and that generate an enormous amount of present-day litigation. This Article builds a case for defining fair value as enterprise value in the shareholder oppression context. The Article argues, in other words, that the buyout remedy should provide an oppressed minority investor with his pro rata share of the company’s overall value, with no reductions (or “discounts”) for the lack of control or liquidity associated with the minority’s shares. Moreover, the Article suggests that, in many situations, courts should allow an oppressed shareholder to choose between the “date of filing”and the “date of oppression”as the appropriate valuation date.

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  Fair Value In The News
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ACSA requests extension. Needs to determine fair value of minority stakes. - BizNews
Here's your preview of this week's big market-moving events - Business Insider
Ruble Rally Fizzles as Attention Turns From Politics to Oil Link - Bloomberg
Investors rights at most REITs not up to standards, governance group warns - Financial Post
Sungy Mobile (GOMO) Announces Completion of Sunflower Merger -
  Fair Value In The BVWire
New York's position with respect to the discount for lack of marketability is unique compared to the other states. "It stands alone in that it favors (and some lower courts believe requires) the imposition of a marketability discount on dissenting shareholders in fair value determinations," writes...
Issue #158-2

More shareholders than ever don’t believe they’re getting a fair shake in a merger transaction and are petitioning the court to appraise the fair value of their shares. This trend does not seem to show any signs of slowing down, according to the latest issue of Willamette Insights (complimentary...
Issue #157-3

A new special report from BVR on control premiums presents both qualitative commentaries and case studies from numerous experts who address these issues. The report, Update on Control Premiums: What the Experts Say, includes all the necessary quantitative considerations along with coverage of the...
Issue #152-3

The latest news in the business valuation profession and complete coverage of court decisions is provided in two new guides from BVR: 1. The Business Valuation Update Yearbook 2015 covers the most innovative approaches and techniques, leading conferences, new court decisions and changes in...
Issue #151-2

Louisiana has revised its appraisal statute in the course of other sweeping changes to the state’s business corporation statute. The previous law had been in effect for more than 40 years. The new law, the Louisiana Business Corporations Act, took effect January 1 and is based on the Model...
Issue #149-3

  Fair Value In The Blogs
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