JDSupra has published an article discussing recent valuation issues in five states: Louisiana, Georgia, West Virginia, Alaska, and Pennsylvania.
While each decision covered is worth discussion in its own right, a comparative analysis of this kind lends itself to highlighting the similarities and differences between the states. In particular, how (and if) each state applies various discounts, including discounts for lack of marketability and minority discounts varies. Thus, as an example, the Louisiana case highlighted explicitly disallowed marketability and minority discounts (commensurate with Louisiana law); in the West Virginia case, a juries rejection of marketability and minority discounts was sustained, but the door was at least open to a jury adopting such discounts in another case. And in the Georgia case, it was the wording of the contract, along with the policy expressed in Georgia’s appraisal regime, that led the Court to uphold a decision providing no minority discount in that case.
Whether to apply minority, marketability, or similar discounts in an appraisal valuation is a critical topic in numerous appraisal jurisdictions – including ones we have covered previously like Iowa, Arizona, and the Cayman Islands. Analysis of discounts can sometimes receive short-shrift in the broader world of appraisal as Delaware does not allow for a minority discount in appraisal. Thus, we are often left looking to other states (and sometimes foreign jurisdictions) to understand how different courts treat such discounts in an appraisal proceeding.