588 A.2d 609
Plaintiff minority shareholder brought suit against defendant corporation under R.I. Gen. Laws § 7-1.1-90 (Reenactment 1985) to dissolve defendant corporation. Defendant corporation moved under R.I. Gen. Laws § 7-1.1-90.1 to purchase plaintiff's shares.
The lower court entered a judgment discounting plaintiff's shares .Plaintiff appealed.
- The supreme court reversed the lower court's judgment, holding that plaintiff's shares should not have been discounted based on its minority status or lack of marketability.
- The supreme court held that minority shareholders should not receive less than fair market value for their shares if, instead of fighting the dissolution action, the majority decides to seek appraisal of minority shares in order to buy out the minority.
- The court further held that a lack of marketability discount was inapposite when a corporation elected to buy out a shareholder that filed for dissolution of a corporation.
The supreme court reversed the lower court's judgment, holding that plaintiff was entitled to fair market value of his shares and no discount should have been given to the shares because of their minority status and lack of marketability.
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