Tennessee Supreme Court Gives OK to Modern Methods for Valuing Stock

In a case involving dissenting shareholders forced out of a closely held Nashville corporation, the Tennessee Supreme Court has overruled its prior case law and adopted a standard that allows trial courts to use modern methods to determine the “fair value” of the dissenting shareholders’ stock. The court overruled a 1983 case that required courts to only use the "Delaware Block" method of valuation and adopted a more open approach. However, in the case at hand, Athlon Sports Communications, Inc. v. Stephen C. Duggan et al., the Supreme Court remanded it back to the trial court, as the lower court and other parties may have been operating under the mistaken assumption that Delaware Block was the only valuation method that was available to them.

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