Oppressive Shareholder Value Slashed by New Jersey Court

In a recent decision in New Jersey Superior Court involving cross claims of shareholder oppression pursuant to N.J.S.A. §14A:12-7, the Court found it appropriate to apply a marketability discount to the value of the privately-held company stock at issue in determining the buyout price to the oppressive shareholder.  As New Jersey is typically a “Fair Value” jurisdiction, marketability discounts are applied only under what is found to be “extraordinary circumstances,” such that failure to do so would unjustly enrich the oppressing shareholder or otherwise fail to adequately compensate the prevailing party.