## Facts

- Three closely held Maine corporations (McLoon Oil Co., Morse Bros. Oil Co., and T‑M Oil Co.) merged into Lido Company of New England, Inc., a New Hampshire corporation, effective December 6, 1976.
- Two minority shareholders dissented and exercised statutory appraisal rights under 13‑A M.R.S.A. § 909 for their shares in the three Maine corporations.
- The Superior Court appointed a referee to determine the fair value of the dissenters’ shares as of December 5, 1976.
- Adopting the referee’s report, the court found the aggregate fair value of each dissenter’s stock across the three companies to be $334,925.
- The court awarded interest at 8% simple interest until payment and denied the dissenters’ request for attorney’s fees.
- Lido argued that fair value must be reduced to reflect the shares’ minority status and lack of marketability; the dissenters argued fair value requires a pro rata share of whole-company value without discounts.

## Issues

1. In an appraisal under 13‑A M.R.S.A. § 909, does “fair value” for shares in closely held corporations require minority and nonmarketability discounts?
2. Did the dissenters forfeit appraisal rights by failing to comply with statutory procedures?
3. Was venue improper as to the appraisal claim involving McLoon Oil Co. shares?
4. Did the trial court err in admitting a dissenters’ valuation expert witness?
5. Did the court err in (a) setting interest at 8% and (b) awarding simple rather than compound interest, and in denying attorney’s fees?

## Decision

- The court affirmed the determination of fair value without minority or marketability discounts.
- The court rejected Lido’s claims of procedural noncompliance and improper venue.
- The court upheld the admission of the dissenters’ expert valuation testimony.
- The court affirmed the 8% interest rate and the denial of attorney’s fees.
- The court modified the judgment to award compound interest instead of simple interest.

## Legal Principles

- “Fair value” in an appraisal proceeding is distinct from “fair market value” and is measured by the shareholder’s proportionate interest in the corporation valued as a going concern.
- In determining fair value for dissenting shareholders, the corporation is valued as a whole and dissenters receive their pro rata share; minority and nonmarketability discounts are not applied when they would shift value to the controlling owners.
- Trial courts have broad discretion on evidentiary rulings concerning valuation experts; valuation approaches are upheld if supported by an adequate foundation and the record.
- Interest in appraisal actions may be compounded to compensate for delayed payment and the time value of money.
- Attorney’s fees are not awarded in appraisal proceedings absent a specific statutory or equitable basis.

## Conclusion

The Maine Supreme Judicial Court held that statutory appraisal “fair value” for shares in closely held corporations is the dissenters’ pro rata share of the corporations’ going-concern value without minority or marketability discounts, and it modified the judgment to require compound (not simple) interest while otherwise affirming the valuation, rate of interest, and denial of attorney’s fees.


In re Valuation of Common Stock of McLoon Oil Co., 565 A.2d 997 (Me. 1989)