Although fair market value has been the predominate standard of value in divorce cases, the argument for replacing fair market value with the fair value standard has grown increasingly prevalent in recent years. As early as 1989, attorneys for the non-business owning spouse began arguing that fair market value is not the appropriate standard of value in divorce. They claim that denying the non-operating spouse a pro rata share of a marital business inequitably enriches the operating spouse and denies the non-operating spouse the fruits of his or her contributions to growing the business during the marriage. By analogy, the proponents of fair value point to the dissenting shareholders’ rights and remedies under the applicable state business corporation act.
As the fair value standard gains traction in divorce, make sure to see The State of the Fair Value Standard in Divorce article posted at our Free Downloads page, as well as our newly-updated annual publication titled BVR's Guide to Fair Value in Shareholder Dissent, Oppression, and Marital Dissolution, which includes an expanded chapter on the hot topic of fair value in divorce.
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