"Fair value! No minority discount."

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When valuing a minority shareholding - especially a “market” valuation (rather than “fair”) - it is often said a “minority discount” applies.  This discount reflects a minority’s lack of power to influence the company.  

Recently, a minority shareholder, P, tried to cause the majority, D, to purchase their shares.  All agreed a share purchase was best.  The value was not agreed. D sought a minority discount.  

Crucially, if there has been oppressive conduct, no minority discount: [4]  

D got their holding from Dir in a 2015 transfer. Over the years Dir had caused the Co to pay Dir and D substantial amounts, and for travel.  P, for their part, made no contribution and sought no info about the Co at all from 2011 until 2018 (shortly after the conclusion of P’s family law proceedings).  

Aside from a period in 2009 to 2012 where Dir applied substantial effort, the remuneration of Dir and payments to Dir and D were oppressive: [131], [170]  

The payment of travel expenses was oppressive: [178]  

The “most egregious” appointment of administrators after the start of proceedings was oppressive: [223]  

Noting the oppression, and despite P’s “absence” from 2011 to 2018, the Court ordered no minority discount for the share sale: [224]  

Please join me to discuss this interesting decision.