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Divorce: Business

James Hollis sought a court-ordered buy-out of his 50% interest in a Nevada corporation. In a bench trial in Judge Lynn Hughes’ district court, the court found that Dan Hill, holder of the other 50% interest, breached the fiduciary duty he owed to Hollis and ordered a buy-out of Hollis’ shares based on Rob Hancock’s assessment of the corporation’s value (including what Judge Hughes characterized as an “ex-dividend”) at an effective date more than one year prior to the date of judgment. Hill timely appealed. The 5th Circuit Court of Appeals affirmed in part and remanded in part due to an issue with the effective valuation date.

In the second trial, Rob Hancock testified on the corporation’s value at a later date (9 months henceforth) from the original trial valuation date). Judge Hughes then ruled from the bench with a similar court ordered buy-out based upon Rob Hancock’s testimony and opinions regarding value and accrued dividends. Hollis v. Hill, 232 F.3d 460 (5th Cir. 2000), the first reported federal court case in the 5th Circuit based upon a claim on minority shareholder oppression.