Baur vs Baur inc.

[smokeyjay]

If one reads the first trial court verdict and this lawyer's opinion, an inheritance is basically worthless if it is received in the form of stock, but only if it is minority stock shares.  In essence, any minority shareholders are screwed from day one.

It's a good thing the Court overturned this verdict and forced the lower court to try to get it right again. 

Inheritance is an investment when received as shares. 

I cannot believe parents would do that kind of scam to any child, regardless of their active or inactive involvement on the farm.  There are better ways to provide for nonfarming children than to give them something that at the time is deemed to be valuable, yet deny them to materially benefit and be subject to the whims and fancies of their siblings.

[Jim Meade / Iowa City]

In the case at hand, the minority shareholder actively participated in and approved the buyout options which he then on two occasions refused to accept.  I have no pity for him at all.  What we have is the case of a minority stockholder holding the rest at ransom.  You guys are not tlaking about the case at hand, you're talking about some other made up situation which was not the case at hand.  You have a good imagination.

[smokeyjay]

Never guaranteed, I agree. 

But mortgaging a land or equipment purchase with minority stock equity and benefiting from it is another issue, don't you think? 

Another interesting note; the lawyer writing this brief suggested that it would be unfair to the corporation if forced to pay fair market value because it would incur a huge tax liability on the appreciated values.  Which makes me conclude his opinion is definitely prejudiced (after all, the Center for Law may be looking out for its best interests here) and something all readers must conclude these statements may not represent a reasonable interpretation of the law....and not necessarily be in their best interests to accept as a legal opinion. 

But why would they be concerned about it?  They never intend on selling the assets to anyone outside of the family.  The corporation was set up to ensure that it would never be sold.  It's a case of using an argument that in reality would never happen.

It is also interesting that the Court's verdict is a check and balance in ensuring this case is properly tried.

[smokeyjay]

Jim, I respectfully disagree.  I read the opinion on the link Kraft provided.  Understand it as well as anyone here.

[sw363535]

Smokey correct me if wrong,  but in Ks the minority owner can force the sale of the assiets of the corporation if a market value certified appraisal of overall value is not acceptable by both parties-------- or a buyout value is not reached if the minority owner wants out.  Would wording handcuffing minority owners be allowed to restrict ownership rights??

[smokeyjay]

I am not sure, but looking back at some dissolutions years ago, I think it is so.  Have to bone up on that.

[sw363535]

too often it is hard to get the complete story on estate corp issues.

Often nobody wants out, but every owner wants to rule over the others

[Husker-J]

There are plenty of companies that do that sort of thing, growing the value of the shares, but not paying any dividends.  Depending on how this case turns out, it could become interesting down the road for some companies.