## Facts

- Garden Arena, a Massachusetts corporation, owned interests including the Boston Garden arena, a subsidiary holding the Boston Bruins NHL franchise, a corporation holding the Boston Braves AHL franchise, and a food-and-beverage concession operation.
- On July 19, 1973, shareholders approved a merger in which New Boston became the surviving corporation.
- Plaintiffs, dissenting shareholders, invoked Massachusetts appraisal rights to obtain judicial determination of the “fair value” of their shares as of July 18, 1973 (the day before the merger vote).
- In the Superior Court, both sides presented extensive documents and expert testimony on valuation.
- The trial judge used a block-type valuation considering (1) market value, (2) earnings value, and (3) net asset value, assigned weights among them, and set fair value at $75.27 per share.
- Plaintiffs appealed, seeking greater reliance on asset value; the defendant appealed, seeking greater reliance on market price.
- The Supreme Judicial Court took direct appellate review.

## Issues

1. Whether the trial judge used an acceptable method to determine statutory “fair value” by considering and weighting market, earnings, and net asset values.
2. Whether the judge erred in valuing major assets included in net asset value, particularly the Boston Garden arena, the Bruins franchise, and the concession operation.
3. Whether the judge improperly treated expert testimony as controlling, misweighted valuation components, or improperly considered post-valuation-date evidence.

## Decision

- The court held that the trial judge generally followed acceptable appraisal procedures and acted within fact-finding discretion in using a multi-factor, weighted approach.
- The court upheld the judge’s treatment of market value as one component, including reliance on the last sale before merger announcement.
- The court upheld the earnings-capitalization approach and the judge’s selection of an earnings base and multiplier from competing expert views.
- The court upheld the assigned weighting among market, earnings, and asset measures as within the judge’s discretion.
- The court approved limited consideration of post-valuation-date evidence when it illuminates value as of the statutory date and does not reflect merger-related changes.
- The court upheld the interest award as within the judge’s discretion.
- The court remanded for further consideration of three valuation components: the Boston Garden arena, the Bruins franchise, and the concession operation.

## Legal Principles

- Under G.L. c. 156B, §§ 85–98, dissenting shareholders are entitled to the “fair value” of their shares as of the day before the corporate vote, excluding value changes caused by the transaction.
- “Fair value” is not fixed to a single formula; a court may consider market value, earnings value, and net asset value and determine an overall value by assigning reasonable weights supported by the evidence.
- Market price may be discounted where trading is limited or otherwise unreliable; it is not necessarily dispositive of fair value.
- Expert valuation testimony is advisory; the judge must exercise independent judgment and may not treat expert figures as binding.
- Post-valuation-date evidence may be used to the extent it bears on value as of the valuation date, but not to capture subsequent changes attributable to the merger.
- Appraisal valuations of complex or unique assets require careful attention to the record to avoid errors such as overreliance on a single transaction price or miscounting the economic contribution of separate business components.

## Conclusion

The court largely affirmed the appraisal methodology and most valuation judgments under Massachusetts dissenters’ rights law, but remanded for reconsideration of the valuation of the Boston Garden, the Bruins franchise, and the concession operation to ensure independent evaluation of the evidence and accurate treatment of key assets.


Piemonte v. New Boston Garden Corp., 377 Mass. 719, 387 N.E.2d 1145 (1979)