Valuation Services: A Soured Friendship Leads to a Clash Over the Value of an Investment in a Dissenting Shareholder Dispute

Sometimes, valuations are necessary in order to determine the value of a business irrespective of control and liquidity attributes. In a dissenting shareholder case, a woman invested in a hair salon because of her friendship with the majority owner. Years later, when the relationship soured, the owner tried to divest her investor friend, but wanted to return only the original value of the investment.

Fair market value (the price at which property would change hands between a willing buyer and a willing seller) applies in standard valuation situations. However our valuation and litigation specialist determined that marketability and minority discounts are irrelevant in this type of case. Fair value, as determined by the court, is the applicable valuation standard. The court agreed and the woman received the fair value of her investment.