The Fair Value of Minority Stock in Closely Held Corporations

In this Article, Professor Shishido examines the various methods—those used by the courts as well as those suggested by law and economics scholars—for determining the fair value of minority stock in closely held corporations. In Professor Shishido's view, the courts' method of weighing—the so-called Delaware block method—fails to arrive at the true value of the minority's shares and often undervalues their worth. Professor Shishido also argues that law and economics scholars fail to differentiate between closely held corporations and publicly held corporations, thus failing to include the effect of corporate law on the fair value of closely held corporate stock.