607.1301 Appraisal rights; definitions.—The following definitions apply to ss. 607.1301-607.1340:
(1) “Accrued interest” means interest at the rate agreed to by the corporation and the shareholder asserting appraisal rights, or at the rate determined by the court to be equitable, which rate may not be greater than the rate of interest determined for judgments pursuant to s. 55.03; however, if the court finds that the shareholder asserting appraisal rights acted arbitrarily or otherwise not in good faith, no interest shall be allowed by the court.
(2) “Affiliate” means a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, another person or is a senior executive of such person. For purposes of paragraph (6)(a), a person is deemed to be an affiliate of its senior executives.
(3) “Corporate action” means an event described in s. 607.1302(1).
(4) “Corporation” means the domestic corporation that is the issuer of the shares held by a shareholder demanding appraisal and, for matters covered in ss. 607.1322-607.1340, includes the domesticated eligible entity in a domestication, the covered eligible entity in a conversion, and the survivor of a merger.
(5) “Fair value” means the value of the corporation’s shares determined:
(a) Immediately before the effectiveness of the corporate action to which the shareholder objects.
(b) Using customary and current valuation concepts and techniques generally employed for similar businesses in the context of the transaction requiring appraisal, excluding any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable to the corporation and its remaining shareholders.
(c) Without discounting for lack of marketability or minority status.
(6) “Interested transaction” means a corporate action described in s. 607.1302(1), other than a merger pursuant to s. 607.1104, involving an interested person in which any of the shares or assets of the corporation are being acquired or converted. As used in this definition:
(a) “Interested person” means a person, or an affiliate of a person, who at any time during the 1-year period immediately preceding approval by the board of directors of the corporate action:
1. Was the beneficial owner of 20 percent or more of the voting power of the corporation, other than as owner of excluded shares;
2. Had the power, contractually or otherwise, other than as owner of excluded shares, to cause the appointment or election of 25 percent or more of the directors to the board of directors of the corporation; or
3. Was a senior executive or director of the corporation or a senior executive of any affiliate of the corporation, and will receive, as a result of the corporate action, a financial benefit not generally available to other shareholders as such, other than:
a. Employment, consulting, retirement, or similar benefits established separately and not as part of or in contemplation of the corporate action;
b. Employment, consulting, retirement, or similar benefits established in contemplation of, or as part of, the corporate action that are not more favorable than those existing before the corporate action or, if more favorable, that have been approved on behalf of the corporation in the same manner as is provided in s. 607.0832; or
c. In the case of a director of the corporation who, in the corporate action, will become a director or governor of the acquirer or any of its affiliates, rights and benefits as a director or governor that are provided on the same basis as those afforded by the acquirer generally to other directors or governors of such entity or such affiliate.
(b) “Beneficial owner” means any person who, directly or indirectly, through any contract, arrangement, or understanding, other than a revocable proxy, has or shares the power to vote, or to direct the voting of, shares; except that a member of a national securities exchange is not deemed to be a beneficial owner of securities held directly or indirectly by it on behalf of another person if the member is precluded by the rules of the exchange from voting without instruction on contested matters or matters that may affect substantially the rights or privileges of the holders of the securities to be voted. When two or more persons agree to act together for the purpose of voting their shares of the corporation, each member of the group formed thereby is deemed to have acquired beneficial ownership, as of the date of the agreement, of all shares having voting power of the corporation beneficially owned by any member of the group.
(c) “Excluded shares” means shares acquired pursuant to an offer for all shares having voting power if the offer was made within 1 year before the corporate action for consideration of the same kind and of a value equal to or less than that paid in connection with the corporate action.
(7) “Preferred shares” means a class or series of shares the holders of which have preference over any other class or series of shares with respect to distributions.
(8) “Senior executive” means the chief executive officer, chief operating officer, chief financial officer, or any individual in charge of a principal business unit or function.
(9) Notwithstanding s. 607.01401(67), “shareholder” means a record shareholder, a beneficial shareholder, and a voting trust beneficial owner.
...Pursuant to section 607.1322(1), when a reverse stock split "becomes effective, the corporation must deliver a written appraisal notice and form ... to all shareholders...." "Shareholder" includes a "record shareholder" which is "the person in whose name shares are registered in the records of the corporation ...." § 607.1301(7), (9), Fla....
...Contrary to the court's position, the appraisal process provides an adequate remedy at law, and the court had additional means to protect any derivative rights. "Statutory proceedings are regarded as law actions ...." Adams v. Dade *776 County, 202 So.2d 585, 586 (Fla. 3d DCA 1967). Section 607.1301, et seq., Florida Statutes, provides a variety of remedies for minority shareholders including the right to obtain a judicial determination regarding the fairness of the price and procedure by which the company determined the price....
...ther civil proceedings." Id. The court is charged with determining the fair value of the shares "[i]mmediately before the effectuation of the corporate action to which the shareholder objects" based on "customary and current valuation concepts ...." § 607.1301(4), Fla....
...litigation during the appraisal process, however, does not render it an inadequate remedy at law. The appraisal must value the corporation at the date "[i]mmediately before the effectuation of the corporate action to which the shareholder objects." § 607.1301(4)(a), Fla....
Cited 10 times | Published | Florida 2nd District Court of Appeal | 2004 WL 1057824
...IMC stock on the relevant date: 4. IMC is a publicly owned corporation and its shares are traded on an interdealer quotation system. .... 13. On November 11, 1999, the relevant date for determination of "fair value" of dissenters' shares pursuant to § 607.1301(2), Fla....
...material fact sufficient to preclude summary judgment by attempting to create facts within IMC's unrebutted evidence." However, before deciding the summary judgment issue, we must first consider the meaning of the term "fair value" as it is used in section 607.1301(2), Florida Statutes (1999)....
...ity for dissenters to withdraw from the corporation." S. End Improvement Group, Inc. v. Mulliken, 602 So.2d 1327, 1332 (Fla. 4th DCA 1992). A critical part of Florida's statutory scheme giving dissenters the right to withdraw from the corporation is section 607.1301(2), which defines the term "fair value" for purposes of the dissenters' *1052 rights statute: "`Fair value,' with respect to a dissenter's shares, means the value of the shares as of the close of business on the day prior to the shar...
...Pertinent to our consideration of the meaning of the term "fair value" is the statutory requirement that the valuation process must exclude "any appreciation or depreciation in anticipation of the corporate action unless exclusion would be inequitable." § 607.1301(2), Fla....
...range of the shares during the one-month period prior to the relevant date. For the purpose of determining the fair value of IMC's shares, the exclusion of any appreciation or depreciation in anticipation of the proposed transaction was required by section 607.1301(2) unless exclusion would be inequitable....
Cited 7 times | Published | Florida 4th District Court of Appeal
...2d at 730).
Typically, the misconduct would have to affect the value of the shares
before appraisal rights are triggered, such that appraisal of the shares’
worth “[i]mmediately before the effectuation of the corporate action to
which the shareholder objects” would provide an unfairly low value. §
607.1301(4)(a), Fla....
Cited 6 times | Published | Florida 2nd District Court of Appeal | 2008 WL 818822
...-of-fact, should have considerable discretion in deciding to what extent it accepts or rejects the expert testimony. [1] As support for her position that the trial judge should be prohibited from applying a marketability discount, the Wife points to section 607.1301(4), Florida Statutes (2005), which defines the "fair value" of a corporation in the context of a shareholder's right to appraisal. Section 607.1301(4)(c) prohibits a discount for lack of marketability or for minority status in such an appraisal. Section 607.1301(4)(c) was enacted after the entry of the final judgment of dissolution of marriage in this case. See ch.2005-267, §§ 2, 27, Laws of Fla. at 1811, 1889. Section 607.1301 expressly states that its provisions apply only to sections 607.1302 to 607.1333, those sections providing certain shareholders appraisal rights upon the occurrence of specific events affecting the nature of the corporation or the shares held....
...Today, the appraisal remedy "serves a minority shareholder protection role, sometimes providing liquidity to shareholders, but most often operating to protect minority shareholders who are cashed out of their investment." Id. at 616. It is in this context that section 607.1301(4)(c) prohibits the application of a marketability discount in the valuation of the closely held corporation....
Cited 4 times | Published | Florida 1st District Court of Appeal | 2008 WL 762483
...Appraisal must determine the "fair value" of the dissenting shareholder's shares. See id. "`[F]air value' means the value of the corporation's shares determined: (a) Immediately before the effectuation of the corporate action to which the shareholder objects." § 607.1301(4)(a), Fla....
...(2003) (providing *730 that appraisal right is triggered upon, inter alia, "[c]onsummation of a disposition of assets"). Because the appraisal must be conducted with regard to the shares' value "[i]mmediately before the effectuation of the corporate action to which the shareholder objects," Section 607.1301(4)(a), Florida Statutes (2003), appraisal would likely have yielded an inequitable result....
...valuation methodology in accordance with industry standards.” However, the court then
adopted $1.9 million as the valuation of Sandhu’s interest in Lally Orange Buick. This
appeal follows.
Statutory appraisal rights are set forth in sections 607.1301 through 607.1333 of
the Florida Statutes. Section 607.1301, Florida Statues (2013), defines the fair value of
corporate shares:
(4) “Fair value” means the value of the corporation’s shares
determined:
(a) Immediately before the effectuation...
...However, the court’s conclusion as to fair value must be “supported by
competent, substantial evidence and properly conformed to the requirements for
determining fair value.” Dolan v. Springlite Bottled Water Corp., 656 So. 2d 211, 212 (Fla.
3d DCA 1995) (citing § 607.1301, Fla....
...mply with the fair value offer provisions of section ■'607.1322 also was supported by sufficient evidence that Woodbridge’s initial offer to the dissenting shareholders was not the product of an analysis using customary valuation techniques. See § 607.1301(4) (defining “fair value” as a value “determined ......
...M. We affirm the trial court’s determination of the fair value of Dolan’s shares in Springlite. The trial court’s valuation was supported by competent, substantial evidence and properly conformed to the requirements for determining fair value. § 607.1301(2), Fla.Stat....
...y
comply with the fair value offer provisions of section 607.1322 also was
supported by sufficient evidence that Woodbridge’s initial offer to the
dissenting shareholders was not the product of an analysis using
customary valuation techniques. See § 607.1301(4) (defining “fair value”
as a value “determined ....
This Florida statute resource is curated by Graham W. Syfert, Esq., a Jacksonville, Florida personal injury and workers' compensation attorney. For legal consultation, call 904-383-7448.
