DocketNumber: No. FA97 0399295
Citation Numbers: 1998 Conn. Super. Ct. 3488
Judges: MUNRO, J.
Filed Date: 3/30/1998
Status: Non-Precedential
Modified Date: 4/17/2021
Mr. Dahill has been, throughout the marriage, employed by a family business, the F.J. Dahill Company, Inc. The company was founded in 1883. It has remained continuously in the family since its inception. Just prior to the time of the parties' marriage in April, 1970, Mr. Dahill was paid $250/per week by the company. He also had a 28% stock ownership of F.J. Dahill, which share was worth about $39,200.00.
The real estate on which the company's facilities are located, is owned by a real estate holding company, Dahill Enterprises, Inc. Shortly before the marriage, in the financial affidavit for the dissolution of his first marriage, Mr. Dahill disclosed no ownership of any portion of that business.
At this time Mr. Dahill owns 1/2 of the shares of stock in F.J. Dahill and 1/3 of the shares of stock in Dahill Enterprises. On his financial affidavit he values his interest in the F.J. Dahill stock at $350,000 and in the Dahill Enterprises at $100,000.
In November, 1997, in anticipation of the surgery, Mr. Dahill executed a shareholder agreement with Mr. McAdam (the other shareholder) which made provisions for purchase of shares on the shareholder's death, retirement or disability. The formula for buyout of the shares, on the occurrence of one of these events, is one and one-half times book value. By the terms of the Shareholders' Agreement between the company, McAdam and Dahill, the defendant may first offer his shares to his son James Dahill. If he chooses not to do so, or they are not purchased, McAdam and then the corporation, sequentially have the right to purchase the stock. If the shares are being sold as a result of death or disability, the company must buy the shares (paragraph 4.2 of the agreement). Otherwise, if the stock sale is a result of termination, Dahill may sell the stock to any third party, without restriction. If the company buys the stock it may pay for the stock over a 7 year period with interest rising at prime rate (Shawmut). The entire payment could defer for ten years if the company's Board of Directors determines it necessary as defined in the Agreement.
Mr. Mark Harrison testified as an expert for the plaintiff CT Page 3490 regarding the valuation of the defendant's Dahill shares under the Shareholder Agreement. Mr. Harrison holds the dual credentials of Certified Public Accountant and an attorney. He has testified before this court previously; he is a well-established expert in the area of valuation of business interests. Mr. Harrison valued Mr. Dahill's share at $1,100,000, or one and one-half book value. He conceded that, to date no triggering event had occurred such that Mr. Dahill's shares were being marketed under the Shareholder's Agreement. He conceded that the value of $1.1 million is not the fair market value of the shares. Instead he defined it as the value to Mr. Dahill at this time (or, "the in hand value").
Mr. Dahill valued his stock at $350,000. This was based on a reported value to him over five years ago from the firm accountant. He had no independent basis for assigning a value to the stock.
The court is required to assign values to all of the assets subject to distribution in this matter. The value of Mr. Dahill's shares of stock, or one-half interest, in the closely held corporation of F. J. Dahill Company is before the court. "In assessing the value of . . . property . . . the trier arrives at h[er] own conclusions by weighing the opinions of the appraisers, the claims of the parties, and h[er] own general knowledge of the elements going to establish value, and then employs the most appropriate method of determining valuation. (Citations omitted.)" Turgeon v. Turgeon,
The court has the authority to appoint an independent expert to value Mr. Dahill's interest in the stock of the corporation. Pursuant to Connecticut Practice Book Section
1. The hearing of this matter is reopened for the sole purpose of allowing the expert witness intended to be appointed by this court, to provide evidence regarding the value of Mr. Dahill's stock ownership, such evidence to be subject to examination by the parties.
2. The court intends to appoint Kenneth Pia (or other such appropriate expert if he declines or is other wise unable to serve) subject to his acceptance of the appointment, to independently determine the fair market value of Mr. Dahill's stock ownership in the F. J. Dahill Company at the present time.
3. It is the intention of the court to order the parties to provide such documentation as may be required by the appointed expert so that he may his duties, in a timely manner, upon request. Counsel may be heard on this as well.
4. The court will determine the reasonable compensation to be paid to the expert witness and will direct payment of the same CT Page 3492 from the parties. Said funds will be utilized by the court for the payment of the expert's fees for the performance of these duties and his testimony before the court.
5. The parties are ordered present before this court on April 13, 1998 at 2:00 p. m. for a hearing pursuant to Practice Book section
6. The clerk of the court shall cause a copy of notice to Mr. Pia of these orders as well as to counsel of record.
Munro, J.