Oppression runs parallel to dissent and diverges from it on the two questions that move money: whether the forum has a buyout remedy at all, and what fair value means when the statute uses the phrase and declines to define it.
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The oppression track begins as a dissolution case and usually ends as a valuation proceeding. New York’s BCL §1104-a lets holders of twenty per cent or more of the votes of all outstanding shares entitled to vote petition for judicial dissolution where those in control have been guilty of illegal, fraudulent or oppressive actions toward them, and §1118 then lets the corporation or another shareholder elect to buy the petitioner out at fair value — converting the case, on a ninety-day clock, into an appraisal in all but name. Texas took the opposite road. And in Model Act states the phrase the buyout provision uses is the same phrase the appraisal chapter defines, except that the definition says on its own face that it applies only to the appraisal chapter. That gap is not an oversight in the drafting; it is where the money is.
Six features of the oppression buyout that behave differently from the appraisal remedy next to it.
New York converts dissolution into a buyout by statute. Texas does not: in Ritchie v. Rupe, 443 S.W.3d 856 (Tex. 2014), the Supreme Court of Texas reversed a court-ordered buyout of a minority holder’s shares, held that the receivership statute does not authorise a buyout as a remedy for oppressive conduct, and declined to recognize a common-law oppression claim — remanding only on a separate breach-of-fiduciary-duty theory. The same facts can be a valuation engagement in one state and no engagement at all in another.
Under BCL §1118 the corporation or any other shareholder may elect to purchase the petitioner’s shares at fair value ‘at any time within ninety days after the filing of such petition or at such later time as the court in its discretion may allow’. Once elected, the dissolution question recedes and the proceeding is about a number.
MBCA §13.01 defines fair value, and its Official Comment says the definition ‘applies only to chapter 13’. Section 14.34, the election to purchase in lieu of dissolution, uses the term four times and defines it nowhere; its Official Comment says the section ‘does not specify the components of “fair value,”’ and that a court may find chapter 13’s valuation methods useful. Guidance, not a definition.
The §13.01 comment points readers to the §14.34 comment, which contemplates that a minority discount may be appropriate. Nebraska declined to follow it: in Bohac v. Benes Service Co., 310 Neb. 722, 969 N.W.2d 103 (2022), the court applied the appraisal definition in full to a §14.34-analogue buyout and rejected the marketability and minority discounts, because the commentary was not adopted by the legislature. The conflict remains live in every Model Act state that has not ruled.
BCL §1118(b) directs the court to determine fair value ‘as of the day prior to the date on which such petition was filed, exclusive of any element of value arising from such filing’, and nothing in the statute moves it. MBCA §14.34 uses the same default and adds ‘or as of such other date as the court deems appropriate under the circumstances’ (verbatim at Iowa Code §490.1434(4) and Va. Code §13.1-749.1(D)).
New York frames oppression around the minority holder’s reasonable expectations — expectations objectively reasonable in the circumstances and central to the decision to join the venture — which is what makes excess compensation, denied distributions and related-party dealings the normalization questions in these cases. BCL §1118(b) then permits the court to give effect to any adjustment or surcharge it finds appropriate on top of fair value.
How the buyout number is built once the forum’s framework is known.
Each of these is decided by the forum rather than by the analysis.
Section 13.01’s definition ‘applies only to chapter 13’ by its own Official Comment. Section 14.34 uses the term four times, defines it nowhere, and its comment says the section ‘does not specify the components of “fair value.”’ A lawyer in a Model Act state cannot assume the appraisal no-discount rule reaches a dissolution buyout.
Not automatically, and in Model Act states the drafting says so. The §13.01 definition of fair value is limited to chapter 13 by its own Official Comment, and §14.34 uses the phrase without defining it — its comment says only that a court ‘may find it useful to consider valuation methods that would be relevant to a judicial appraisal of shares under section 13.30’. That leaves the standard to be built case by case, and because Official Comments were never enacted by any legislature, courts are free to disregard them. Nebraska did: Bohac v. Benes Service Co., 310 Neb. 722 (2022), applied the appraisal definition in full to a §14.34-analogue buyout and rejected both shareholder-level discounts. Other Model Act states have not ruled. Checked September 2026.
It depends on the forum and, in New Jersey, on who is buying. New York bars the minority discount: in Friedman v. Beway Realty Corp., 87 N.Y.2d 161 (1995), the Court of Appeals held it ‘would result in minority shares being valued below that of majority shares, thus violating our mandate of equal treatment of all shares of the same class in minority stockholder buyouts’ — while permitting a discount for lack of marketability, and remitting for recalculation of one. New Jersey decided two cases as companions on 14 July 1999 and reached, in its own words, opposite results: Balsamides v. Protameen Chemicals, Inc., 160 N.J. 352, upheld a marketability discount on the oppressor’s shares where the oppressed shareholder was the court-designated buyer; Lawson Mardon Wheaton, Inc. v. Smith, 160 N.J. 383, struck one in a dissenters’ appraisal absent extraordinary circumstances. A single principle produced both — the discount cannot be used by controlling or oppressing shareholders to benefit themselves. Balsamides reserved the converse case, and it is New Jersey law only.
No, and the reason is doctrinal rather than statistical. A discount in an opinion is a litigation outcome on that record — a finding of fact reviewed with deference — not a datum a later appraiser may adopt, which is why this Institute publishes no table of court-concluded discounts. The best-known compilation makes the point against itself. Valuation analyst Z. Christopher Mercer surveyed thirty-one New York statutory fair value cases decided since 1985, publishing in October 2022; the distribution is bimodal rather than centered, the most common single outcome was no discount at all, and what predicts a result is the Appellate Division department and the type of entity rather than anything in the discount literature. Mercer also testified for a zero discount in several of the surveyed cases and argues normatively for that result, and the survey mixes trial and appellate outcomes. The live question is whether the forum permits the adjustment, not what others got.
At the election. Before it, the case is about conduct measured against the minority holder’s reasonable expectations, and that liability question is counsel’s. After it, the case is a valuation proceeding in which the number is the remedy — which is why the analysis here is about the standard, the date and the permitted adjustments rather than about what the conduct cost. Where a claim instead seeks compensation for conduct, measured against what would have happened absent the breach, that is damages doctrine and it belongs to our Economic Damages Institute at economicdamagesinstitute.com; business enterprise value as a damages measure is theirs without qualification. New York’s BCL §1118(b) sits at the seam, permitting the court to give effect to an adjustment or surcharge on top of fair value.
Describe the state, the holding and what is alleged. The Institute will help you see which provision supplies the standard of value, and whether it supplies one at all.