North Carolina Appeals Court Affirms Decisions on Value of Businesses Under Buy-Sell Agreements

BVLaw
Court Case Digests
December 29, 2022
8011 Offices and Clinics of Doctors of Medicine
621111 Offices of Physicians (except Mental Health Specialists)
securities litigation
buy-sell agreement, physician practice, shareholder dispute, buyout, minority shareholder, shareholder agreement, book value, balance sheet, operating agreement, fiduciary duty, summary judgment, shareholders, trial court

Jayawardena v. Daka
2022-NCCOA-924; 2022 N.C. App. LEXIS 935 ; 881 S.E.2d 759; 2022 WL 17983440
US
State Court
North Carolina
Court of Appeals
Cherry Bekhaert LLP
Richard Dietz, Hunter Murphy, Allegra Collins

Summary

This case involved a shareholder dispute among four shareholders of a physician practice (Ferncreek Cardiology PA) and two real estate LLCs. There were buy-sell provisions for each of the three entities. As to Ferncreek, the buy-sell provision was essentially an increase in book value provision, as the regular account determined in “good faith.” Payment provisions were also included in the agreement. The two real estate LLCs had a buy-sell provision that provided for either a single agreed-upon appraiser or three appraisers if no agreement was made. The plaintiff made the decision to exit the practice, triggering the buy-sell provisions. The parties were not able to agree on certain provisions as they worked through the buy-sell agreements. The trial court entered partial summary judgments on some claims of both parties. This appeal dealt with these partial summary judgments and was filed by the plaintiff.

See Also

Jayawardena v. Daka

This case involved a shareholder dispute among four shareholders of a physician practice (Ferncreek Cardiology PA) and two real estate LLCs. There were buy-sell provisions for each of the three entities. As to Ferncreek, the buy-sell provision was essentially an increase in book value provision, as the regular account determined in “good faith.” Payment provisions were also included in the agreement. The two real estate LLCs had a buy-sell provision that provided for either a single agreed-upon appraiser or three appraisers if no agreement was made. The plaintiff made the decision to exit the practice, triggering the buy-sell provisions. The parties were not able to agree on certain provisions as they worked through the buy-sell agreements. The trial court entered partial summary judgments on some claims of both parties. This appeal dealt with these partial summary judgments and was filed by the plaintiff.