Selected cases

For minority shareholder making gift of stock in software company with $300,000,000 valuation, PSA estimated minority and marketability discounts. PSA analyzed company, capitalization, ownership distribution, stockholder agreements, and publicly available data on marketability discounts. PSA determined appropriate discount for particular stock of client to be approximately 60%.

For stockholder with controlling interest in real estate LLC's, PSA estimated discounts applicable to holdings of minority stockholder to estimate fair market value. PSA's detailed analysis of relative rights and powers of parties and of pricing of comparable minority interests in marketplace indicated combined minority and marketability discounts for the two LLC's of 83% and 89%.

For minority stockholder frozen out of privately held fuel oil distribution company, PSA analyzed company, position in industry, and financial performance, and researched compensation of managers in comparable companies. Dr. Saunders testified at trial as to stockholder/managers' overcompensation and mediocre financial performance of company. Result was directed buyout on terms favorable to client.

For minority stockholder in restaurant chain alleging freeze-out from share in expansion restaurants, PSA analyzed inter-corporate relationships, identified sources of funds for expansion, and valued new restaurants. PSA report contributed to settlement which, in words of client attorney, was "as good as we would have gotten in trial, if everything went our way."

Publications

Marketability Discounts and Risk in Transactions Prior to Initial Public Offerings, Business Valuation Review.

"Control Premiums and Minority Discounts", in Robert B. Dickie, Financial Statement Analysis and Business Valuation for the Practical Lawyer (American Bar Association).