A dissenting shareholder, an oppressed minority holder and a divorcing spouse have almost nothing in common except the shape of the problem: an interest that will be bought out or divided by operation of law rather than sold. In all three the tribunal’s job is to fix a number, and that number is the remedy.
Start a conversation with the Valuation Concierge, already scoped to ownership interests in dispute. Select a subject area to prompt it, or describe the matter directly.
In each of these three proceedings a tribunal fixes a value and the value is the outcome. A dissenting shareholder need not prove that anyone did anything wrong; neither need a divorcing spouse. Even in oppression, where conduct is the gateway, once the buyout election is made the case is a valuation proceeding rather than a claim for compensation. That is what separates this area from damages work, where liability and causation gate a figure measured against a world that did not happen. What the three share is that the same three variables are fixed before an appraiser is engaged — which definition of value governs, which date the business is valued on, and which shareholder-level adjustments are permitted. Change the caption on the pleading and all three change with it.
Dissent, oppression and divorce run on the same three legally fixed variables and answer them differently — sometimes within a single state, on the same day, in the same court.
The statutory remedy whose outcome is most often decided by a calendar, before any appraiser is engaged.
investigateThe buyout track that borrows appraisal’s two words and, in most Model Act states, none of its definition.
investigateThe one proceeding where the statute often names no standard of value at all, and the silence becomes the litigable issue.
investigateThe work that happens before a model exists, because the model’s parameters are not the appraiser’s to choose.
That the number is the remedy. In each, a tribunal is asked to fix a value and the value is what the party receives — the appraisal award, the buyout price, the marital share. Two of the three do not require any wrongful conduct at all: a dissenter who follows the statute is entitled to a determination whether or not anyone misbehaved, and a divorcing spouse is entitled to a division of what exists. Oppression has a liability gateway, but once the corporation or a shareholder elects to purchase, the case converts into a valuation proceeding. That is the structural difference from damages, where causation gates the figure and the figure measures the distance from a world that did not happen.
No, and the variation is the reason this area exists. Appraisal statutes in Model Act states define fair value exhaustively — Virginia’s §13.1-729 fixes the date, the methodology instruction and the discount rule in one sentence. Delaware’s §262(h) names fair value and defines nothing, leaving the content entirely to the courts. Oppression statutes frequently use the same two words without defining them: the MBCA defines fair value in §13.01 for chapter 13 only, and §14.34 uses the term four times and defines it nowhere. Matrimonial statutes often name no standard at all — Virginia’s equitable distribution statute, §20-107.3, does not, while the corporate statute two titles away defines fair value exhaustively. One state, one company, two proceedings, two answers.
It is a category error to put it that way. A standard of value is a definition; a discount for lack of control or lack of marketability is a level-of-value adjustment; and whether the standard permits the adjustment is a third and separate legal question that different legislatures and courts answer differently. Model Act text bars discounting for lack of marketability or minority status on its face, with an express carve-out for certain amendments to the articles (Va. Code §13.1-729). New York bars the minority discount and permits a marketability discount (Friedman v. Beway Realty Corp., 87 N.Y.2d 161 (1995)). New Jersey allowed one in an oppression buyout and refused one in a dissenters’ appraisal on the same day in 1999 (Balsamides v. Protameen Chemicals, Inc., 160 N.J. 352; Lawson Mardon Wheaton, Inc. v. Smith, 160 N.J. 383). And in Delaware the exclusion is not discounts at all but merger-arising value, which can push the answer below the price on the table (8 Del. C. §262(h)).
Because the charts in circulation disagree with one another, are frequently stale, and disagree about large states. The most-cited judicial survey of goodwill treatment in divorce is the West Virginia Supreme Court of Appeals’ own in May v. May, 214 W. Va. 394, 589 S.E.2d 536 (2003); the Kentucky Supreme Court in Gaskill v. Robbins, 282 S.W.3d 306 (Ky. 2009), noted that May had placed Kentucky in the wrong column, and Kentucky’s own law then moved. A count taken in 2003 describes the shape of a split, not its current headcount. Every jurisdictional statement on these pages carries the statute or decision it rests on and the date it was checked, which is the only form in which this material is safe to publish.
No, and the boundary is the legislature’s rather than an editorial preference. DGCL §262(g) directs dismissal of an appraisal proceeding for shares listed on a national securities exchange immediately before the merger unless the appraisal shares exceed one per cent of the class, or the merger consideration for them exceeds $1 million, or the merger was a short-form merger under §253 or §267. Delaware itself treats listed-share appraisal as a separate regime. Deal price weight, unaffected trading price, deal price less synergies and appraisal arbitrage are covered by our Economic Damages Institute at economicdamagesinstitute.com. What this area covers is appraisal in closely held corporations, oppression buyouts, and marital dissolution.
Describe the proceeding, the forum and the timing. The Institute will help you see which definition of value, which date and which adjustments the law has already chosen.