521 P.3d 834
Or. Ct. App.2022Background
- Plaintiff Margarita Ybarra owned 7.98% of Dominguez Family Enterprises, Inc. (DFE) and sued under ORS 60.952(1) alleging waste, oppressive, and fraudulent conduct.
- DFE invoked ORS 60.952(6) and elected to purchase Ybarra’s shares; the court stayed the suit and held a fair-value hearing.
- Valuation evidence: Ybarra’s expert valued her share at $2,252,000 (no discounts); DFE’s expert gave $836,000 after applying minority and marketability discounts.
- The trial court found no oppression and ruled that discounts must be applied unless oppression is shown, resulting in a fair-value award of $927,595 to Ybarra.
- Ybarra appealed, arguing fair value under ORS 60.952 excludes minority and marketability discounts (i.e., proportionate going-concern value).
- The Court of Appeals vacated and remanded, holding that applying such discounts is a case-specific determination (not mandatory absent oppression).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether “fair value” under ORS 60.952(6) equals fair market value (so minority/marketability discounts must be applied unless oppression shown) | Ybarra: fair value is proportionate going-concern interest; discounts not appropriate | DFE: absent oppression court may apply discounts; trial court properly applied them here | Court: Trial court erred to treat discounts as mandatory absent oppression; discounts are case-specific and may be applied only after considering all circumstances; remand required |
| Whether minority and marketability discounts may ever be used in ORS 60.952(6) determinations | Ybarra: discounts never appropriate | DFE: discounts may be appropriate when no oppression and facts support them | Court: Discounts can be appropriate but only after case-specific analysis; discounts not allowed if oppression is found |
Key Cases Cited
- Hill v. Gold, 322 Or App 324 (Or. Ct. App. 2022) (controls: fair-value inquiry under ORS 60.952 depends on circumstances)
- Columbia Mgmt. Co. v. Wyss, 94 Or App 195 (Or. Ct. App. 1988) (dissenter‑rights precedent: appropriateness of discounts depends on case facts)
- Chiles v. Robertson, 94 Or App 604 (Or. Ct. App. 1989) (discounts not permitted where shareholder is victim of oppressive conduct)
- Graydog Internet, Inc. v. Giller, 362 Or 177 (Or. 2017) (legislative history and purpose of ORS 60.952 election to purchase)
- Hickey v. Hickey, 269 Or App 258 (Or. Ct. App. 2015) (fair-value determination must consider interests of both purchaser and selling minority)