R. Kashmiry & Assocs. v. Ellis
In shareholder dispute over minority owner’s stock buyout, appeals court finds trial court’s sole reliance on five-year-old valuation and its rejection of appraiser’s recent valuation violates parties’ shareholder agreement and requires revaluation.
Trial court’s IPO valuation in fair value proceeding holds up on appeal
A recent case shows just how difficult it is to value a startup. Here, there was an extra challenge because the subject was a pharmaceutical venture that required years of funding for the development of two drugs working toward FDA approval. The trial court needed to determine the fair value of the plaintiff’s interest prior to the company’s ultimate success.
Ambiguous expert report prompts order to revalue minority interest
A recent Wisconsin case illustrates that a shareholder agreement in place is no guarantee for a smooth buyout of the minority shareholder. The case also includes a caution to experts to strive for clarity in their expert reports.
BV profession needs "one clear voice" in New York DLOM matter
A prior post that highlighted the article “NY’s Unfair Application of Shareholder-Level Marketability Discounts,” written by Gil Matthews and Michelle Patterson (both with Sutter Securities) has sparked calls for the BV profession to speak with “one clear voice” on this issue.
Analysts Not Required to Predict the Future—Only to Probe Present Facts
In assessing fair value and adequate consideration of ESOP transaction, court considers whether appraiser should have reasonable foreseen future events affecting stock and company value.
Appropriateness of Accounting Principles and Valuation Must Go to Trial
One of the issues in this shareholder dispute was whether stock was correctly valued pursuant to a stock purchase agreement.
Keach v. U.S. Trust Co.
In assessing fair value and adequate consideration of ESOP transaction, Court considers whether appraiser should have reasonable foreseen future events effecting stock and company value.
K-O Enterprises, Inc. v. O'Brien
One of the issues in this shareholder dispute was whether stock was correctly valued pursuant to a stock purchase agreement.
Change in Policy Breaches Good Faith Even If It Does Not Violate GAAP
The issue in this case was the admittance of evidence concerning the company’s book value.
In re Emerging Communications, Inc. Shareholders Litigation
The court in this case placed a fair value of $38.05 per share on the stock of a company which was acquired in a two-step going private transaction at $10.25 per share based on a fairness opinion.
Management Projections and Cost of Capital Considered
The Delaware Court of Chancery considered the use of management projections and the use of WACC and CAPM in computing the cost of capital.
Eggett v. Wasatch Energy Corporation
Issue was whether former officer and stockholder was entitled to book value or par value under the parties' shareholder agreement.
Parties Held to GAAP Valuation Methodology Under Buy-Sell Agreement
An employee sued his former employer, claiming it breached the implied covenant of good faith and fair dealing.
Coyle v. Schwartz
"Mutual Agreement" valuation method upheld as valid, partner required to accept 12-year old value for shares under stock purchase agreement because they never revalued them.
Stock Valuation Provision Calling for Annual Revaluation Enforced
The Kentucky Court of Appeals held that a mutual agreement stock valuation provision, which called for the annual revaluation of the stock, was enforceable, despite the fact that the stock had not been revalued since the agreement was executed.
Berne v. Boschulte
Defendants challenge valuation after they have signed unanimous consent for it. Judgment entered they violated settlement agreement from a prior action.
Smith v. Grand Canyon Expeditions Company
Appellant argues that net book value arrived at by Grand Canyon too low despite buy-sell agreement specifying net book value as accepted valuation method.
Shareholder Agreement Using Par Value Enforced
Timothy Strickland was a former employee and shareholder of CADD Centers of Florida Inc.
CADD Centers of Florida, Inc. v. Strickland
The issue in this case was the par value of a former employee and shareholder’s stock pursuant to a shareholder agreement.
No Evidence That Board's Financial Advisor Was Fiduciary to ESOP
This was a motion for summary judgment in connection with an action for breach of fiduciary duty to the employee stock ownership plan (ESOP) of F&G company.
FMV Formula in Agreements Requires Inclusion of All Assets
One of the issues in this case was whether the trial court erred in using a book valuation method in determining share price.
Shriner v. Sheehan
One of the issues in this case was whether the trial court erred in using a book valuation method in determining share price.
Experts Rejected for Conflict of Interest and Failure to Use Management Projections
The issue in this case was the fair value of the shares of PharmaSciences Inc. (PSI).
Murphy v. MCC, Inc. (II)
Suit filed to interpret stock redemption agreement.