Hat tip to Peter Mahler (Farrell Fritz PC) for an in-depth review of a recent NY trial court opinion in which a key person discount was a focal point. In his blog post “Key Person Discount Takes Center Stage in Stock Valuation Proceeding” Mahler writes:

“When the controlling shareholders terminate the employment of a minority shareholder who then petitions for dissolution, and whose shares are later valued in a contested "fair value" buyout proceeding, should the court apply a so-called key person discount reflecting the company's potential diminished value from the loss of the minority shareholder's services?”

This was but one of several, thorny issues confronted by Special Referee Louis Crespo, whose 50-page Report and Recommendation valuing at $3.2 million a 49% interest in a company that leases, sells and services office copiers and other equipment, was recently confirmed by Manhattan Commercial Division Justice Barbara R. Kapnick in a case called Matter of Abraham (Elite Technology NY, Inc.), 2010 NY Slip Op 33225(U) (Sup Ct NY County Nov. 10, 2010).