Opinion ID: 77883
Heading Depth: 2
Heading Rank: 1

Heading: Consideration of Fair Market Value

Text: Florida courts have explained that determination of fair value for the purposes of the election statute rests on determining what a willing purchaser in an arm's length transaction would offer for an interest in the subject business. G&G Fashion Design, 870 So.2d at 871; see also Friedman v. Beway Realty Corp., 87 N.Y.2d 161, 638 N.Y.S.2d 399, 661 N.E.2d 972, 976 (1995) (applying New York statute similar to Florida's statute). This is not to say that fair value is synonymous with fair market value. Most courts have rejected the notion of such synonymity. See Boettcher v. IMC Mortg. Co., 871 So.2d 1047, 1052 (Fla.Dist.Ct.App.2004). However, the terms are not mutually exclusive. On one hand, as Florida courts have explained, where fair market value would take into account appreciation or depreciation in anticipation of corporate action such as a merger or acquisition, the valuation process under § 607.1436 must exclude both positive and negative effects of any such impending transaction. Id. On the other hand, a court may use fair market value as an estimate of fair value when such potentially distorting corporate actions are not at issue. See, e.g., G&G Fashion Design, 870 So.2d at 872-73 (affirming trial court's reliance on market value approach and evidence of good faith, bona fide, arm's length offer for minority shareholder's shares in determination of fair value). [9] Accordingly, Florida courts have recognized that valuation proceedings necessarily confront them with a variety of evidence and methods aimed at determining the price of minority interests. Id. at 871-72 (quotation and citation omitted). In valuing a corporation, a court should consider proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court. . . . [such as] net asset values, market price, earnings, and the like. Boettcher, 871 So.2d at 1053 n. 6 (quotation and citation omitted). Here, the district court first found that NJC was a marketable corporation  two viable businesses that would command an attractive price on the open market. R16-251 at 23. Consequently, in the absence of any imminent merger, acquisition or other distorting corporate action, the court found that the fair market value/comparable sales valuation method used by Van Essen was that most appropriate to this case and weighted Van Essen's testimony accordingly. The court then made adjustments to Van Essen's calculations to give greater weight to the News-Journal's closely held status. The court adopted its valuation method based upon the circumstances of this case and offered solid reasons for its decision to do so. We find no abuse of discretion.