The controlling owners of a large real estate enterprise exercised buyout provisions for numerous companies to redeem the interests of certain minority owners. The minority owners sued for oppression and demanded higher payments for their ownership interests based on their opinion of the companies’ valuations. The alleged discrepancy in value exceeded $150 million.
The controlling owners engaged Stout to value more than 70 companies holding various types of real estate. The scope of the project involved two separate valuation dates for each company and had to be performed within a very compressed time frame. Our real estate valuation experts inspected every property and performed appraisals of all of the properties. Our business valuation experts valued the minority interests in the companies, including a determination of the appropriate valuation discounts for lack of control and lack of marketability.
Stout’s business and real estate valuation experts testified at binding arbitration in this shareholder dispute. The arbitrator ruled that the opposing experts’ opinions warranted no weight in the arbitrator’s award for any companies that Stout valued. The arbitrator’s ruling relied on Stout’s expert opinions for virtually every aspect of the valuation determination in a ruling that was extremely favorable for our clients.