Iowa Sup. Ct. revises minority shareholder rights
June 14th, 2013 by Ric Hanson
DES MOINES, Iowa (AP) – An Iowa Supreme Court decision in a dispute over the value of shares in a farm business two cousins inherited from their fathers gives additional clout to minority shareholders in closely held family businesses and could have wide-sweeping effect on inherited family business operations. The court’s decision released Friday centers on cousins Jack and Bob Baur who have argued over the value of Jack’s shares in Baur Farms Inc. since the early 1990s.
Jack Baur sued alleging Bob and the farm corporation engaged in oppressive conduct by refusing to buy Jack’s shares at a fair market value. The high court says minority shareholders may reasonably expect to share proportionally in a corporation’s gains, setting a new standard in disputes over the value of shares in family corporations.