©2018 by American Business Appraisers.

What is “Fair Value” Anyway?

July 1, 2012

The definition of value is critical to the correct application of the law, especially in the case of shareholder dissent or minority oppression actions. Fair Value has seldom been defined clearly in the statute, and can vary from jurisdiction to jurisdiction.

The revised Model Business Corporation Act defines Fair Value as “The value of the shares just before the effectuation of the corporate action to which the shareholder objects, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable. 

California has not adopted this definition officially. In most applications Corp Code §2000 in interpreted to require the appraisers to apply most of the common elements of the Fair Market Value standard - willing knowledgeable seller, willing knowledgeable buyer - but to value the shares without regard to their minority status. In other words to use the same per share value as a controlling interest would have.

Please reload

Our Recent Posts

We are increasingly being called to assist attorneys or the court in various litigation matters. Business valuations are frequently required in the fo...

Testimony and the Valuation Expert

February 1, 2014

Report Types and Level of Service

Different USPAP reports have different uses. 

ABA principals are credentialed certified business appraisers. By both...

Report Types and Level of Service

December 1, 2013

What's Real?

Are you dealing with Nominal or Real Wages? 

What's the Difference Between Nominal and Real?

As litigation support specialists, we are o...

What's Real?

September 1, 2013

1/1
Please reload

Tags

Please reload