Brian D. Rogers


Appraisal statutes are available to provide fair compensation to minority shareholders of corporations who are squeezed out against their will. Missouri Revised Statutes Section 351.455. the Missouri statute that provides for appraisal rights in the event of a merger or consolidation, requires corporations to pay dissenting minority shareholders “fair value” for their shares. The Missouri appraisal statute does not define “fair value,” nor does it provide a mathematical formula for determining the value of dissenters’ shares. Rather, Missouri case law has established that courts are to consider all relevant facts and circumstances to determine the value of a dissenter’s shares. A significant question of law is whether minority and marketability discounts should be applied. The various state courts are divided as to the appropriateness of both discounts. Although the Missouri Supreme Court has not yet decided the issues, in Swope v. Seigel-Robert, Inc., the United States Court of Appeals for the Eighth Circuit predicted that the Missouri high court would reject both discounts. Although the Eighth Circuit was probably right in rejecting a marketability discount, it may have been wrong in concluding that the Missouri Supreme Court would reject a minority discount.

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