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Supreme Court notes the Difficulty of Valuing Shares of Closely Held Corporation

31 Oct 2011
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By Lewis Tesser, Partner, and Timothy Nolen, Associate

A recent New York County Supreme Court case demonstrates the difficulty of valuing shares of a closely held corporation. The case involved issues of forensic accounting, business law, evidence and civil practice.

The case, Matter of the Determination of the Value of Shares of Harlem River Yard Ventures, Inc., 602341/07, NYLJ 1202510746036 (Sup. Ct. N.Y. County, July 11, 2011), concerned a 4.6 percent shareholder of a property-holding/lease corporation who sought a judicial determination/buyout of the petitioner’s shares. Initially, the Court noted that making conclusions as to future income is “not an easy task.” It then weighed a substantial amount of expert testimony about the value of the property and the corporation’s future income, ultimately determining that the petitioner’s shares were worth almost $3,000,000.

At Tesser, Ryan & Rochman, our attorneys are experienced in working with shareholders, partners and corporate officers seeking to arrive at the appropriate valuations for their investments.

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About Post Author

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Lewis Tesser is a senior partner in the New York law firm of Tesser, Ryan & Rochman, LLP, concentrating his practice in litigation and mediation, representing licensed professionals and professional practices, administrative law and commercial law. Lew Tesser is Vice-President of the New York County Lawyers’ Association and Director of its Ethics Institute. Prior to private practice, Mr. Tesser was an Assistant United States Attorney in the Eastern District of New York. In that capacity, he represented various agencies of the United States government in litigation in the United States District Court and United States Court of Appeals. Mr. Tesser also served as a Judge Advocate in the United States Army where he prosecuted and defended criminal cases and was the chief legal advisor to the Commanding General of the U.S. Army War College, Carlisle, Pennsylvania. He also has served as an Arbitrator for the American Arbitration Association, New York City Civil Court, a Judge for the Environmental Control Board of the City of New York and a lecturer for various Bar Associations and New York area law schools. Mr. Tesser, who was admitted to practice in 1971, is a 1970 Honors graduate from the National Law Center, George Washington University, a Masters graduate from the Wharton Business School, University of Pennsylvania (l974) and a graduate of the Harvard Law School Program of Instruction for Lawyers. He is a past President of Congregation Sons of Israel, Nyack, NY. Publications and Speaking Engagements Editor-In-Chief, “The New York Rules of Professional Conduct Annotated”, Oxford University Press, New York, 2010. A complete list of Mr. Tesser’s speaking engagements and publications is available if you would like to learn more about Mr. Tesser’s work. Representative Cases In Re Zhang, 376 Fed. Appx. 104 (2d Cir. 2010) Continental Casualty Co. v. JBS Construct. Mgmt., 2010 U.S. Dist. LEXIS 85467 (S.D.N.Y. 2010)

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Tesser, Ryan, & Rochman Blog

At Tesser, Ryan, & Rochman we are committed to keeping current, former, and future clients up to date. Here on our blog we will have news regarding our firm, as well as business analysis, various cases, case studies, and legal findings for the benefit of our clients.