While the vast majority of United States appraisal rights cases occur in Delaware, several other states — Florida among them — also recognize appraisal rights. This past summer, a Florida appellate court affirmed a minority shareholder’s right to exercise appraisal rights when the company sought to redeem its shares. In Omes v. Ultra Enterprises, Inc., 2017 WL 3611546 (Fla. Dist. Ct. App. Aug. 23, 2017), directors of Ultra Enterprises, which owns the intellectual property of the Ultra Music Festival, voted to redeem the shares of Alex Omes, one of Ultra’s co-founders, due to Omes’ self-dealing and competing personal businesses. Ultra notified Omes of the board’s decision and his right to seek appraisal to determine the value of his shares. Omes exercised his appraisal rights, rejecting Ultra’s valuation of $1,200 per share, and instead offering his own countervaluation of $111,111.11 per share.
After a bench trial, the trial court found that the appraisal process was properly invoked. In a turnabout of the more conventional use of appraisal, the appellate court observed that a majority shareholder has a right to engage the appraisal process “to eliminate the rights of dissenting shareholders and put an end to corporate strife.” The court ultimately determined that Ultra’s valuation analysis was supported by competent, substantial evidence. The case demonstrates that appraisal rights are indeed available in Florida, and we are continuing to watch out for additional rulings outside Delaware, as we posted about yesterday.