Co. Supreme Court affirms minority discounts in family law cases

The Colorado Supreme Court just affirmed the use of discounts for lack of marketability (DLOM) in the Thornhill case.   Without explicitly altering the legal standard of value in the state (value to the owner), the decision gives the lower courts the option to accept fair market value, along with value to the owner (including marketability and perhaps even minority discounts), at their discretion in divorce cases.

BVLaw News will cover this development in more detail, but early quotes from the decision include this summary:

“The Colorado Supreme Court affirms the court of appeals’ determination with respect to marketability discounts, holding that trial courts may in their discretion apply marketability discounts when valuing an ownership interest in a closely held corporation in marriage dissolution proceedings.”

“…We conclude that the considerations we found compelling in Pueblo Bancorporation v. Lindhoe, Inc., 63 P.3d 353 (Colo. 2003), in which we held that marketability discounts are not appropriate in the minority shareholder context, are not applicable here.”