## Facts

- A closely held corporation owned and operated an 18-hole, 147-acre golf course in Burrillville, Rhode Island.
- A shareholder owning 15% (15 shares) filed a Superior Court action seeking judicial dissolution under G.L. 1956 § 7-1.1-90, alleging illegal conduct and that those in control acted illegally, oppressively, or fraudulently.
- The corporation elected to avoid dissolution under G.L. 1956 § 7-1.1-90.1 by purchasing the petitioning shareholder’s shares for “fair value.”
- The parties could not agree on fair value; the Superior Court stayed the dissolution proceeding and used the valuation procedure in § 7-1.1-74, appointing an independent appraiser.
- The appraiser valued the 15% interest as of the close of business on the filing date of the dissolution petition; the court accepted a value of $139,095.
- The shareholder appealed, arguing the valuation failed to reflect statutory “fair value,” chiefly because it allegedly incorporated minority and marketability discounts.

## Issues

1. Whether “fair value” under §§ 7-1.1-90.1 and 7-1.1-74 is violated when an appraisal of a minority interest in a close corporation allegedly reflects minority and/or marketability discounts.
2. Whether the trial court erred in accepting the appointed appraiser’s valuation in the statutory appraisal process.

## Decision

- The Supreme Court of Rhode Island affirmed the judgment.
- The Court held that the statutory appraisal process was properly used to determine “fair value” as of the petition date.
- The Court found no reversible error in the trial court’s acceptance of the appraiser’s valuation on the record presented.
- The Court applied deferential review to the trial court’s valuation determination and declined to substitute its own judgment absent clear error or legal mistake.

## Legal Principles

- A corporation may avoid judicial dissolution by electing to purchase the petitioning shareholder’s shares for “fair value,” with the court determining value if the parties do not agree.
- In the statutory buyout setting, the trial court may appoint an appraiser under the statutory procedure and retains ultimate responsibility to accept, modify, or reject the appraisal conclusions.
- Valuation is primarily a fact determination; appellate review is deferential and will not disturb the trial court’s adopted valuation absent clear error or error of law.
- Allegations that an appraisal reflects minority or marketability adjustments do not, without an adequate showing that the resulting amount is inconsistent with statutory “fair value,” require reversal.

## Conclusion

The court upheld the statutory election to purchase the minority shareholder’s shares and affirmed the $139,095 “fair value” determination, emphasizing the trial court’s discretion in appraisal-based valuation and deferential appellate review.


Charland v. Country View Golf Club, Inc., 588 A.2d 609 (R.I. 1991)