Practitioners’ Guide to Dissenters’ Rights in Five Easy Pieces
By: JAMES E. DORSEY & THOMAS S. FRASER
March 2009
-
Select an appraiser who will stand up in court. He or she will be presenting reams of potentially very boring information and numbers to the court. In turn, your appraiser will be vigorously cross-examined by your opponents with the help of their appraiser. You need a good, strong, articulate and independent witness.
-
Work with your appraiser. Advise your appraiser about the law on discounts before you receive the appraisal report. Advise your appraiser about the exact valuation date and be careful about post-valuation date evidence.
-
Observe carefully the rules and deadlines for dissenting and responding to a dissenter. Within prescribed time limits, the corporation must provide accurate and complete notices to shareholders and the dissenter must file up to three different notices or demands.
-
Do not “low ball” the dissenter or file a frivolous dissent. While this is not a major league baseball arbitration (in which the arbitrator must choose one party’s number and may not split the difference), staking out an extreme position has its risks. The attorneys’ and experts’ fees that can be assessed under Chapters 302A and 300 are substantial.
-
Do not assume the case will settle. As in other divorces, emotions run high and settlements are difficult to achieve. The corporation does not want to pay a dissenter more than it paid the non-dissenters. The dissenter did not want to part with his or her stock in the first place, thinks the corporation is more valuable than it now says, and wants what is due.