Tuesday, January 13, 2015
New York Court Denies Marketability Discount in Dissenter Rights Action
In the original decision in this dissenter right action, it having been delivered on October 6, 2014, the court determined that a discount for lack of marketability would not be applied to the sharers held by the dissenters, it being determined that the application of such a discount would be equivalent to imposing a minority interest discount, that already forbidden by New York law.
Ruling on December 22 in connection with a motion for reconsideration, the judge again I determined that a discount for lack of marketability is not, at least in this instance, appropriate. Zelouf International Corp. v. Zelouf, Index 653652/2013 (Dec. 22, 2014). Peter Mahler, in his blog New York Business Divorce, has reviewed these developments; his discussion can be accessed THROUGH THIS LINK.
Kentucky has already moved its law ahead of that in New York with respect to minority and lack of marketability discounts in dissenter rights actions. In Shawnee Telecom Resources, Inc. v Brown, 354 S.W.3d 542 (Ky. 2011), the Kentucky Supreme Court reversed Ford v. Courier-Journal Printing Co. and held that, in the context of a dissenter rights action, neither a minority nor a lack of marketability discount should be applied with respect to the shares of the dissenting shareholder.