American Ethanol, Inc. v. Cordillera Fund, L.P., 127 Nev. 147

Summary

The Supreme Court of Nevada addresses the meaning of fair value under Nevada's dissenters' rights statutes in a shareholder appraisal proceeding arising from a merger. The court adopts a flexible valuation approach, holds that both the dissenting shareholder and corporation must prove their respective valuation positions by a preponderance of the evidence, and affirms the district court's $3-per-share valuation.

Holdings

1. A district court determining fair value may rely on any valuation technique generally accepted in the relevant financial community, must consider all relevant factors presented by the parties and any independent examiner, and must reach a value that is fair and equitable to all parties.
2. Both the dissenting stockholder and the corporation bear the burden of proving their respective valuation conclusions by a preponderance of the evidence.
3. The district court did not abuse its discretion by determining that Cordillera's shares had a fair value of $3 per share.

Questions Presented

1. What methodology and factors may a district court consider when determining the fair value of shares in a Nevada dissenters' rights appraisal proceeding?
2. Which party bears the burden of proving fair value in a Nevada stockholder dissenters' rights appraisal action?
3. Whether the district court abused its discretion by determining that the fair value of Cordillera's shares was $3 per share.

Disposition

affirmed