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Breaking Up Is Not Hard To Do – Fractions, Scrip And Scrippage

The California General Corporation Law explicitly authorizes a corporation to issue fractional shares.  Cal. Corp. Code § 407.  A corporation, however, is not required to do so.  Id.  In lieu of issuing fractions, a corporation may in connection with the original issuance: arrange for the disposition of fractional interests by those entitled to receive them;…

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Court Addresses “Fair Value” Determination In Statutory Buyout Proceeding

When when a shareholder sues for involuntary dissolution, the corporation, or the holders of 50% or more of the voting power of the corporation, may avoid the dissolution by purchasing for cash the plaintiff’s shares at their “fair value.”  Cal. Corp. Code § 2000.  The statute establishes several parameters for determining “fair value”.  Thus, “fair value” must…

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“Fair Is Foul, And Foul Is Fair”, But Are “Fair Value” And “Fair Market Value” Synonymous?

Last Friday, I wrote in this post about a recent Nevada Supreme Court decision that provides a modicum of guidance on how “fair value” is to be determined for purposes of Nevada’s dissenters’ rights law. California’s dissenters’ rights law doesn’t refer to “fair value”.  Rather, California uses the term “fair market value”.  According to Professor…

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Nevada Supreme Court Adopts Delaware Approach To Fair Value Burden Of Proof

Recently, the Nevada Supreme Court answered several questions concerning how to determine the “fair value” of shares under Nevada’s dissenters’ rights statutes (found in NRS Chapter 92A).  American Ethanol, Inc. v. Cordillera Fund, L.P. (May 5, 2011).    Nevada’s dissenters’ rights statutes are primarily based on the Model Business Corporation Act (MBCA), which is in turn based…

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