When an appraisal is conducted under Corporations Code 2000 to determine the value of shares in a closely held corporation, the trial court must either apply a value agreed upon by at least two of the three appraisers, or a value independently set by the trial court; the court cannot, as it did here, simply average the three appraisers’ differing values. Plaintiff held a minority of stock in a close corporation. She sued to dissolve the corporation. To avoid dissolution, the defendant agreed to buy plaintiff’s shares at their value as established by an appraisal under Corp. Code 2000. Three appraisers were appointed but rather than agreeing on a single appraised amount, each came up with a separate number—$69,000, $150,000 and $200,000. The trial court then adopted a value equal to the average of the three individual appraised sums. Held, reversed. Section 2000 requires either (a) application of a value agreed upon by at least two of the three appraisers, or (b) a value independently set by the trial court. Here, neither of these alternatives was used. Two appraisers did not agree on a sum. The court’s average was not an independently determined fair value of the shares. The matter was remanded for a reappraisal in accord with section 2000.
California Court of Appeal, Second District, Division 6 (Yegan, Acting P.J.); November 22, 2016; 2016 WL 6875926