Copyright (c) 2005 Journal of Law & Family Studies
Journal of Law & Family Studies
Case Note: Gibbons v. Gibbons: A How-To Guide for Achieving an Efficient Valuation and an Equitable Distribution of Stock Assets in Divorce Proceedings
7 J. L. Fam. Stud. 205
Cory D. Sinclair*
In Gibbons v. Gibbons, 1 the Oregon Court of Appeals analyzed the difficult question of how to value and distribute stock in a closely held corporation in divorce proceedings. The court used a valuation method that is advocated by law and economics scholars, specifically focusing on how much a hypothetical willing buyer would pay a hypothetical willing seller for the stock. 2 Roy Lynn Gibbons ("Roy") owned 102.23 shares of his family's logging corporation that he acquired during the last years of his marriage to Nanci Sue Gibbons ("Nanci"), which represented a minority interest in the corporation. 3 As a condition for receiving the final 64.23 shares of stock, Roy permanently assigned his voting rights to the president and gave the corporation the right to purchase the stock at a fair price if he decided to sell it for any reason. 4 During Nanci and Roy's divorce proceedings, both parties presented evidence on the proper value of the stock that was found to be a marital asset. Both the trial court and the court of appeals held that the valuation method presented by Roy's expert was the proper method because it more accurately reflected the economic rights held by the owner of the stock. 5 Moreover, the court of appeals ordered a more equitable distribution of the marital assets than did the trial court. This efficient valuation and equitable distribution should serve as a model for Utah courts.
In Utah, courts have declined ...
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