Opinion ID: 2763968
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: ¶1 This case arises out of a decision by two minority shareholders of Utah Resources International, Inc. (URI) to dissent from the company‘s consummation of a share-consolidation transaction. Utah law provides that shareholders may dissent from certain corporate transactions and requires the corporation to pay the dissenting shareholders ―fair value‖ for their shares.1 But here 1 UTAH CODE § 16-10a-1302(1). URI v. MTC Opinion of the Court URI and the dissenters disagreed on the ―fair value‖ of the dissenters‘ shares, which led to URI instituting a fair value proceeding in the district court. That court ultimately concluded that the fair value of the dissenters‘ shares was over two times the amount proposed by URI. ¶2 Before reaching the merits of this case, we first address whether URI waived its right to appeal given that it partially paid the judgment against it. We ultimately conclude that URI has not waived its right to appeal. URI has not satisfied the judgment against it in full and, regardless, it expressly reserved its right to appeal. ¶3 Turning to the merits, the primary question presented by URI is whether the district court erred in determining the fair value of the dissenters‘ shares. We conclude that the court did err in disallowing four deductions from URI‘s assets, namely, deductions for: (1) transaction costs associated with the anticipated sale of real estate, (2) trapped-in capital gains taxes related to the sale of real estate, (3) income taxes on oil and gas royalty interests, and (4) a discount on URI‘s minority interest in another company. In rejecting these deductions, the district court relied on inapplicable caselaw from other jurisdictions and misread our own caselaw. Accordingly, we vacate the district court‘s ruling and remand for proceedings consistent with this opinion. Because we vacate the district court‘s ruling on this basis, we do not address URI‘s additional claim that the court did not give adequate consideration to URI‘s market value or investment value. We also do not address the claims made by the dissenters in their cross appeal.2