Deprives resisting shareholders of right to veto managerial decisions by vesting that power in the provisional director. If parties have become completely incompatible, the appointment of a provisional director may be futile. of Aggrieved Minority Shareholder “Buy-Out” Most jurisdictions will allow of the minority’s “buy-out” shares at value” as an equitable remedy. This may be “fair paired as an alternative the Corp must be dissolved, or the – majority must buy out the minority. Value”: “Fair Two different ways of calculating: Fair value = fair market value that the court values an oppressed minority’s shares by considering what a hypothetical purchaser would pay for them gives a discount” + “minority discount” “marketability discount” = adjusts for “minority lack of control in the corporation discount” = “marketability adjusts for lack of liquidity in one’s interest in an entity Even if jurisdiction has an appraisal statute that uses FMV w/ discounts, those discounts are arguably not valid when the majority is buying the minority’s shares they aren’t really buying – on the market + discounts could be used by majority to further oppress minority. (Brown v. Allied Corrugated Box Co.) Fair = pro rata share of the company’s overall value
Deprives resisting shareholders of right to veto managerial decisions by vesting that power in the provisional director. If parties have become completely incompatible, the appointment of a provisional director may be futile. “Buy-Out” of Aggrieved Minority Shareholder Most jurisdictions will allow “buy-out” of the minority’s shares at “fair value” as an equitable remedy. This may be paired as an alternative – the Corp must be dissolved, or the majority must buy out the minority. “Fair Value”: Two different ways of calculating: Fair value = fair market value that the court values an oppressed minority’s shares by considering what a hypothetical purchaser would pay for them gives a “minority discount” + “marketability discount” “minority discount” = adjusts for lack of control in the corporation “marketability discount” = adjusts for lack of liquidity in one’s interest in an entity Even if jurisdiction has an appraisal statute that uses FMV w/ discounts, those discounts are arguably not valid when the majority is buying the minority’s shares – they aren’t really buying on the market + discounts could be used by majority to further oppress minority. (Brown v. Allied Corrugated Box Co.) Fair = pro rata share of the company’s overall value
bizorgraggs2010.docx