While the vast majority of United States appraisal rights cases occur in Delaware, several other states — Florida among them — also recognize appraisal rights.  This past summer, a Florida appellate court affirmed a minority shareholder’s right to exercise appraisal rights when the company sought to redeem its shares.  In Omes v. Ultra Enterprises, Inc., 2017 WL 3611546 (Fla. Dist. Ct. App. Aug. 23, 2017), directors of Ultra Enterprises, which owns the intellectual property of the Ultra Music Festival, voted to redeem the shares of Alex Omes, one of Ultra’s co-founders, due to Omes’ self-dealing and competing personal businesses.  Ultra notified Omes of the board’s decision and his right to seek appraisal to determine the value of his shares.  Omes exercised his appraisal rights, rejecting Ultra’s valuation of $1,200 per share, and instead offering his own countervaluation of $111,111.11 per share.

After a bench trial, the trial court found that the appraisal process was properly invoked.  In a turnabout of the more conventional use of appraisal, the appellate court observed that a majority shareholder has a right to engage the appraisal process “to eliminate the rights of dissenting shareholders and put an end to corporate strife.” The court ultimately determined that Ultra’s valuation analysis was supported by competent, substantial evidence.  The case demonstrates that appraisal rights are indeed available in Florida, and we are continuing to watch out for additional rulings outside Delaware, as we posted about yesterday.

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Photo of Steve Hecht Steve Hecht

Steve Hecht is a go-to trial lawyer for hedge funds, institutional investors, family offices, university endowments, venture funds and other investors interested in utilizing the legal process to create value for their own investors. Whether by activist litigation, fiduciary duty claims, or appraisal…

Steve Hecht is a go-to trial lawyer for hedge funds, institutional investors, family offices, university endowments, venture funds and other investors interested in utilizing the legal process to create value for their own investors. Whether by activist litigation, fiduciary duty claims, or appraisal and other valuation strategies, Steve has extensive experience across the gamut of options for shareholders.  He regularly tries cases in Delaware Chancery Court and around the country for clients seeking outsized returns. Steve is a partner of Rolnick Kramer Sadighi LLP.

Photo of Rich Bodnar Rich Bodnar

Rich is an experienced securities litigator focusing on value-generating legal strategy.  Rich brings to each matter a deep knowledge of the quantitative methods side of securities litigation, especially damages computation, event studies, econometrics/economics and the theories, tools, and strategies involved in the preservation…

Rich is an experienced securities litigator focusing on value-generating legal strategy.  Rich brings to each matter a deep knowledge of the quantitative methods side of securities litigation, especially damages computation, event studies, econometrics/economics and the theories, tools, and strategies involved in the preservation and maximization of the value of client’s securities claims.