One week after a New York trial court issued a contentious ruling that KO’d Discount for Lack of Marketability (DLOM) in Zelouf, a different court pronounced on the issue in another pot-stirring fair value proceeding that featured an “extremely successful company,” extremely contentious business partners, and extremely well-known valuators.
The successful company is AriZona (of iced tea fame), founded in 1992 by the plaintiff and the defendant and now the largest privately owned beverage company in the United States. Both partners were equal shareholders but after a few years into the business venture, they started to have a falling out. For the good of the business, they decided that the defendant should take control of the day-to-day decisions. They also signed an owners’ agreement limiting the transfer of shares in AriZona to a designated class of transferees.