Judicial Evaluation Analysis On The Reasonable Share-repurchasing Prices Of Dissenting Shareholders

Appraisal right of dissenting shareholder is a special exit mechanism for shareholders and the judicial assessment of reasonable share-repurchasing prices is one of the most important parts. Among them, the right choice of the subject to start judicial proceedings ensures the smooth opening of judicial assessment procedures of reasonable prices. By the comparison of the economic strength, the ability to gather evidence and their attitudes for share-repurchasing litigations between the company and the dissenting shareholders, it can be found that although dissenting shareholders hold a more positive attitude to the proceedings, they are weaker than the company in other respects, and therefore to initi ate judicial proceedings as the obligation imposed on the company will be more conducive to promoting the entire judicial process. T he valuation date and the evaluation methods of reasonable prices will affect the formation and results of share-repurchasing prices. For the valuation date, based on whether the company will take the responsibility to send the notice of shareholders' general meeting to the dissenting shareholders, it can be divided into two cases. In the case that the company takes the respons ibility, the time when the major resolution is made is considered as the valuation date. And there are no exceptions and once the dissenting shareholders show their withdrawal, the specific reasons for their withdrawal do not constitute a basis to obtain a dditional benefits. In the case that the company does not take the responsibility, the time period from the opening date of shareholders' general meeting to the time when the shareholders know or should have known the major resolutions of the company is tr eated as the timeline and any point during this period can be chosen as the valuation date by the shareholders. However, in the share-repurchasing disputes, evaluation methods of reasonable prices need to run at a certain framework. In the fixed framework of reset capital method, capitalized earning method and market comparison approach and after fully considerations, the company and dissenting shareholders choose a single method or a combination of various methods to assess the share-repurchasing prices of the shares in accordance with the actual situation, the advantages and disadvantages of various methods and the important factors contained.