[Shareholder Oppression] Link v. LSI: South Dakota Supreme Court addresses Va...
Eric Fryar
Link v. L.S.I., Inc., 793 N.W.2d 44 (S.D. Dec. 29, 2010).
The South Dakota Supreme Court recently reviewed issues relevant to shareholder oppression cases: valuation of shares, payment for those shares, and security when the trial court orders a payment plan rather than a lump-sum payment.
The Link case addresses the issue of valuation of shares when the corporation elects a buy-out to avoid dissolution pursuant to SDCL 47-1A-1434. The Court held that the value of the shares need not reduced for lack of marketability as the corporation serves as a market for the shares. A court has the authority to order a payment plan if a one-time payment would be too burdensome and the corporation is unable to obtain a loan for the payment amount. However, when a payment plan is in place, the court can also order that the corporation secure the payments, which can protect the shareholder as well as keep the corporation motivated to fulfill its obligation under the payment plan.
[Read Complete Cases Analysis of Link v. LSI]
Christina Richardson, Fryar Law Firm, P.C.
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Posted By Eric Fryar to Shareholder Oppression at 2/21/2011 01:55:00 PM