Statutory fair value appraisal proceedings in New York come in two flavors. First, there’s the buy-out appraisal under Business Corporation Law § 1118 triggered by a minority shareholder’s petition for judicial dissolution....more
The fair value and fair market value appraisal standards applicable in contested buyout and dissenting shareholder valuations cut across state lines, which is one of the main reasons I occasionally highlight significant court...more
4/4/2022
/ Appraisal ,
Built-In Gains ,
Business Divorce ,
Buy-Out Agreements ,
Deal Price ,
Discounts ,
Fair Market Value ,
Fair Valuation ,
IA Supreme Court ,
IN Supreme Court ,
NC Supreme Court ,
NE Supreme Court
Valuation discounts can and often do play an outsized role in contested appraisal proceedings involving the valuation of equity interests in closely held business entities for which there is no public market....more
11/1/2021
/ Appraisal ,
Business Divorce ,
Buyers ,
Buyouts ,
Closely Held Businesses ,
Dissolution ,
Fair Market Value ,
Fair Value Standard ,
Limited Liability Company (LLC) ,
Minority Discount ,
RULLCA ,
Sellers
It’s not unusual to find buy-out provisions in shareholder and operating agreements that commit the pricing of the buy-out to the “final and binding” determination of one or more appraisers. The same agreements also may...more
2/15/2021
/ Appraisal ,
Arbitration Agreements ,
Arbitration Awards ,
Business Divorce ,
Buy-Out Agreements ,
Closely Held Businesses ,
Contract Terms ,
Fair Market Value ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
PricewaterhouseCoopers ,
Repurchase Agreements ,
Shareholders
Gurney’s Inn is an iconic oceanside resort located in Montauk, New York, on the eastern tip of Long Island’s South Fork affectionately known as “The End.”...more
Was it “an unfortunate attempt to second-guess or even force a ‘do over’ of the appraisal,” as the one side would have it? Or was it a “rigged” and “corrupted” appraisal process that took place behind closed doors and...more
In my business divorce travels occasionally I encounter instances in which shareholder distributions are made in the period between the valuation date for an elective buyout of a minority shareholder who sued for dissolution...more
The discoverability of materials in civil litigation in general resists any hard and fast rules, other than that the scope of discovery is broadly defined and liberally applied under the rules of civil procedure in both state...more
The dog days of August are upon us, a perfect time as I do each year to offer vacationing readers some lighter fare consisting of summaries of a few recent decisions of interest involving disputes between business co-owners....more
8/13/2018
/ Appraisal ,
Business Divorce ,
Business Litigation ,
Business Valuations ,
Buy-Out Agreements ,
Co-Ownership ,
Contract Disputes ,
Contract Terms ,
Judicial Dissolution ,
Jurisdiction ,
NE Supreme Court ,
Partnership Agreements ,
Partnership Interests ,
Partnerships ,
Profit Sharing ,
Shareholders
This is the first in what I hope will be a recurring feature of this podcast featuring war stories told by business divorce professionals. In this episode we hear stories from business appraiser Tony Cotrupe (Meliora...more
9/8/2017
/ Appraisal ,
Business Divorce ,
Business Ownership ,
Buyers ,
Buyouts ,
C-Corporation ,
Comment Period ,
Corporate Dissolution ,
Division of Assets ,
Fair Market Value ,
Forensic Examination ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Sellers ,
Valuation
The title of this post notwithstanding, the judge’s decision in the recent, high-stakes stock valuation case I’m about to describe, featuring a clash of business appraiser titans whose conclusions of value differed by almost...more
The premiere episode of Business Divorce Roundtable starts out with a bang or, more accurately, Part One of a two-part interview with one of the nation’s leading business appraisers, Chris Mercer, discussing the controversy...more
If you haven't already listened to Episode 1/Part 1 of my interview with Chris Mercer, in which Chris discusses the fundamentals of the controversy surrounding application of the marketability discount in statutory fair value...more
Mediation has grown in popularity as a means of resolving legal disputes in lockstep with the rising costs and delays attendant to litigation and arbitration, including business divorce cases. This episode features an...more
There’s little doubt in my mind that “business divorce” has achieved name recognition as a distinct subgenre of commercial litigation whose regular practitioners, by dint of experience dealing in and out of court with the...more
1/10/2017
/ Appraisal ,
Business Entities ,
Business Valuations ,
Choice-of-Law ,
Closely Held Businesses ,
Contract Terms ,
Corporate Dissolution ,
Dissolution ,
Freeze-Out Mergers ,
Internal Controls ,
Jurisdiction ,
Mergers ,
Reverse Stock Splits
I’m pleased to present my 9th annual list of this past year’s ten most significant business divorce cases. The list includes important appellate rulings by the First and Second Departments on dissolution of foreign business...more
12/27/2016
/ Appeals ,
Appraisal ,
Books & Records ,
Breach of Duty ,
Corporate Dissolution ,
Derivative Suit ,
Enabling Laws ,
Fiduciary Duty ,
First Impression ,
Foreign Business Partners ,
Foreign Entities ,
Jurisdiction ,
Limited Liability Company (LLC) ,
LLC Agreements ,
Merger Agreements ,
NJ Supreme Court ,
Partnership Interests ,
Popular ,
Shareholder Rights ,
Shareholders' Agreements ,
Standing