A summary of recent federal and state court cases involving final partner administrative adjustments, mergers, and matrimonial law This month we highlight four cases. The first is Rovakat, a federal appellate court decision where a claimed redemption was deemed a sale of stock. The In re MFW Shareholder Litigation case involves a motion for summary judgment where a majority of the minority shareholders approved a merger transaction; this was deemed a “cleansing device” that led to the dismissal of plaintiff’s leading claim, which involved an allegation of breach of fiduciary duty. In Matter of Central N.Y. Oil & Gas, the…
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Recent Cases Consider: Fair Market Value in Arkansas, Equalization Payments and Healthcare Credits in Iowa, and Valuations Based on Future Cash Flow in Louisiana Judge Wiggins in Iowa rules In re Marriage of McDermott on equalization payments and tax credits for health insurance payments. In Louisiana, Judge Williams finds a valuation in Fancher v. Prudhomme invalid since it was based on assumed cash flow—and a withdrawing member was the source of almost all the company’s business. Instead, current asset value is key. Find out more.
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Case Law—State: American Ethanol, Inc. v. Cordillera Fund, LP In American Ethanol, Inc. v. Cordillera Fund, LP, the Supreme Court of Nevada is required to weigh in on fair market value. A lower court had judged that stockholders were fairly paid some $1.75M (about $3 per share) for American Ethanol at the time of the merger. American Ethanol appealed, claiming it was worth more. Part of its argument was that its appraiser—an unaccredited one—couldn’t be expected to perform sophisticated calculations, such as a discount for lack of marketability. Find out what the Nevada Supreme Court determines and why!