Hill v. Gold

(1) ORS 60.952(6) allows the court to order the election to buy the stock of the shareholders who filed the claim rather than to pursue litigation when faced with an ORS 60.952 (1) claim. (2) A discount is appropriate if the sale of shares is because of misconduct and the price is determined on their fair value rather than fair market value. Cook v. Fresh Express Foods Corp., 169 Or App 101, 115 (2000).

Plaintiffs appealed a judgment, which ordered them to sell their interest in Gold Hill Properties, Inc. (GHP), for a fair value of $437,600. Plaintiffs assigned error to the trial court ordering them to sell their interest to GHP.  On appeal, Plaintiffs argued that GHP was unable to engage in a binding corporate action because Plaintiffs and Defendants were deadlocked in the management of GHP. ORS 60.952(6) allows the court to order the election to buy the stock of the shareholders who filed the claim rather than to pursue litigation when faced with an ORS 60.952 (1) claim. The Court reasoned that plaintiff’s argument was directly at odds with the purpose of the statute, which includes avoiding a deadlock. The trial court’s order to sell the shares was authorized.

Additionally, Plaintiffs assigned error to the fair value calculation of their interest. Plaintiffs argued that “fair value” calculated by the trial court was inconsistent with ORS 60.952.  In response, Defendants content the fair value calculation was appropriate considering that GHP was “a small family run business.” A discount is appropriate if the sale of shares is because of misconduct and the price is determined on their fair value rather than fair market value. Cook v. Fresh Express Foods Corp., 169 Or App 101 (2000). The Court reasoned that evidence of fair market value was relevant; moreover, in the absence of oppression, a court may apply a marketability discount. The trial court did not err. Affirmed.