Country Visions Cooperative v. Archer-Daniels-Midland Company
958 N.W.2d 511
Wis.2021Background
- Country Visions held a recorded right of first refusal (ROFR) on the Ripon grain facility owned by ADM; the ROFR required ADM to deliver any bona fide written third‑party offer and gave Country Visions 15 days to match the purchaser's price and terms.
- ADM negotiated a $25 million package sale of four grain facilities to United; after Country Visions learned of the deal, ADM and United split the package into a $20 million agreement for Ripon alone and $5 million for the other three properties.
- Country Visions declined to match, sued for declaratory relief and specific performance, and disputed that the $20 million Ripon price was a bona fide allocation (alleging it was a sham to defeat the ROFR).
- At bench trial Country Visions’ expert appraised Ripon at ~$7.7 million; Defendants’ expert attributed $16.6 million of the $25 million package to Ripon based on buyer‑specific synergies; the circuit court found the $20 million number was a sham but adopted $16.6 million as the appropriate exercise price and ordered specific performance.
- The court of appeals affirmed in part and remanded to clarify whether the $16.6 million included personal property (which the ROFR did not cover). The Wisconsin Supreme Court affirmed that buyer‑specific synergies may justify an exercise price above an appraised fair market value but remanded to ensure the price includes only the real property covered by the ROFR.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the ROFR exercise price must equal the property's appraised fair market value | Country Visions: exercise price should be the fair market/appraised value (~$7.7M) — circuit court erred by using buyer‑specific price | Defendants: ROFR requires matching the bona fide third‑party terms; buyer‑specific synergies can justify a higher price | Held: Exercise price need not equal appraised fair market value; court may set price equal to the prospective buyer's actual offer when synergies justify it |
| Whether a package sale of multiple properties triggers the ROFR and how to allocate price | Country Visions: allocation must reflect fair market value of burdened parcel (avoid windfall) | Defendants: seller may allocate price among package components; ROFR obligates matching the buyer's terms if bona fide | Held: Package sale triggers the ROFR; court must break up package and determine the prospective offer price for the burdened property (not merely pro rata or slavishly the appraisal tiers) |
| Whether the $20M Ripon allocation was a sham and the correct exercise price | Country Visions: $20M was an artificially inflated allocation to defeat ROFR; actual price was much lower | Defendants: United genuinely valued Ripon highly due to operational synergies | Held: Circuit court correctly found $20M was a sham; but it may consider United's demonstrated willingness to pay above appraised value when setting the exercise price (court adopted $16.6M based on United‑specific value) |
| Whether the $16.6M exercise price included personal property excluded by the ROFR | Country Visions: the price may include personal property and must be reduced to cover real property only | Defendants: expert allocation reflected real‑property value to United | Held: Remand required — court must determine and record whether $16.6M includes personal property and ensure exercise price covers only real estate subject to the ROFR |
Key Cases Cited
- MS Real Est. Holdings, LLC v. Donald P. Fox Fam. Tr., 362 Wis. 2d 258 (2015) (defines ROFR basics and exercise procedure)
- Wilber Lime Prods., Inc. v. Ahrndt, 268 Wis. 2d 650 (2003) (addressed package sales and directed fair valuation of burdened parcel rather than pro rata split)
- Pantry Pride Enters. v. Stop & Shop Cos., 806 F.2d 1227 (4th Cir. 1986) (adopted middle‑road approach: specific performance on burdened property and remand for allocation rather than simple pro rata pricing)
- Edlin v. Soderstrom, 83 Wis. 2d 58 (1978) (explains ROFR as contractual preemptive right distinct from an option)
- In re Adelphia Commc'ns Corp., 368 B.R. 348 (Bankr. S.D.N.Y. 2007) (buyer‑specific synergies can justify paying more than fair market value; ROFR holder must match the actual offer)
- Metropolitan Assocs. v. City of Milwaukee, 379 Wis. 2d 141 (2018) (describes the tiered appraisal methodology for determining fair market value used in taxation/eminent domain contexts)