Opinion
86-0858; CA A48210
Petitions for reconsideration of appellant filed January 19, 1990 Respondent filed January 24, 1990
Both reconsiderations allowed, former opinion modified and adhered to as modified June 6, 1990 Reconsideration denied July 25, 1990 Petition for review denied August 28, 1990
Appeal from Circuit Court, Linn County.
William O. Lewis, Judge.
Edward L. Daniels, Albany, for appellant's petition.
Joel S. Devore and Luvaas, Cobb, Richards Fraser, P.C., Eugene, for respondent's petition and response to appellant's petition.
Before Richardson, Presiding Judge, and Newman and Edmonds, Judges.
NEWMAN, J.
Wife's petition for reconsideration allowed; husband's petition for reconsideration allowed; former opinion modified to increase wife's judgment against husband to $19,932, payable within three years after date of appellate judgment, with interest at nine percent per annum; former opinion adhered to as modified. No costs to either party on reconsideration.
Husband and wife each petition for reconsideration, ORAP 9.15, of our former opinion. 99 Or. App. 703, 784 P.2d 111 (1989). We allow both petitions, modify our former opinion and adhere to it as modified.
Husband asserts that our statement that "[h]usband's parents own the majority of the 242 shares" is wrong. 99 Or App at 705. We correct it, and also the preceding sentence, to read:
"Husband was raised on a farm that he operated with his father until his father's retirement. Husband's parents and his siblings own the majority of the 242 shares."
Husband argues that we erroneously assumed that he probably would sell his stock to his parents. He asserts that we should have allowed a minority discount of 25 percent and a marketability discount of 30 percent on the basis of a probable sale to others. We disagree. As the Supreme Court has noted:
"Where, as here, the [shareholder's] interest is part of the family held corporation and there have been no sales of the stock of the company, the problem is difficult. Valuation then becomes, in part at least, a problem of avoiding the capricious and arbitrary while giving adequate recognition to the real." Unander v. Murphy, 208 Or. 77, 89, 299 P.2d 813 (1956).
This is a family farming operation. If a sale should occur, and there is no evidence of any prospective sale, it could as well be by a sale of the corporate assets at their fair market value as by a transfer of the stock. We decline to apply either a minority or a marketability discount.
Wife asserts, and husband concedes, that the corporate debt to husband's father is $33,800, and not $39,340. This correction reduces the corporate liabilities by $5,540 and increases the value of each share of stock by $23. Accordingly, we value each share at $1,961. Valuing the stock at $1,961 per share, and applying that value to the court's distribution of assets, husband has net assets of $151,294 and wife has net assets of $72,210. Accordingly, we conclude that wife should have a judgment against husband of $19,932, instead of $19,254.
Description: Husband: Wife: ------------ -------- -----
1. Family residence (equity) $ 55,000 2. Personal property in possession $ 1,400 2,678 3. Automobiles camper 1975 Chevrolet 875 1981 Oldsmobile 2,000 Camper 800 4. IRA — Husband 9,134 5. Life Insurance 4,223 6. Webber Farm, Inc. — stock: Premarital gift — 20 shares 39,220 Gifts during marriage — 47 shares 92,167 Purchased 12 shares 23,532 Contract of purchase (103 shares) -0- -0- ------- -------- $157,994 $ 73,035 Less Debts: 6,700 825 ----------- -------- -------- $151,294 $ 72,210
We compute the amount of the judgment as follows:
$151,294 -39,220 (20 shares X $1,961 each) --------- 112,074 -72,210 --------- 39,864 x .50 --------- $ 19,932
In her petition, wife argues that the trial court and this court erred in deducting $60,000 from corporate assets, representing a debt to the bank, without, as wife urges, adding an increase in corporate assets for an equivalent investment in the 1988 crops. Husband responds that on this record it would be speculative to do so. We do not modify further the distribution of assets; it is "just and proper in all of the circumstances." ORS 107.105 (1)(f).
Wife's petition for reconsideration allowed; husband's petition for reconsideration allowed; former opinion modified to increase wife's judgment against husband to $19,932, payable within three years after the date of the appellate judgment, with interest at nine percent per annum; former opinion adhered to as modified. No costs to either party on reconsideration.