Gilbert E. Matthews and Michelle Patterson
State courts employ fair value as the predominant standard to determine the value of minority shares in both appraisal (also known as dissent) and oppression cases. When the courts determine the minority’s share price in an appraisal or order the buyout of an oppressed minority shareholder, the price of the award or buyout is critical for both parties and sets the “fair value” of the minority’s shares. Although appraisal and oppression statures in most states expressly or effectively stipulates that the minority’s shares are to be valued at “fair value,” there remains considerable confusion about what “fair value” means. To understand fair value as a standard of measurement, it must be considered in contrast to the standards of value called fair market value and third-party sale value, as will be discussed in this chapter.