Guge v. Kassel Enterprises, Inc.Annotate this Case
The Supreme Court affirmed in part and reversed in part the ruling of the district court making a "fair value" determination of Plaintiffs' shares in an election to purchase in lieu of dissolution proceeding, holding that the district court erred in determining the fair value of the shares without any discount for transaction costs or built-in gain taxes.
This case concerned the three children of Lawrence and Georgia Kassel - Susan Guge, Peggy McDonald, and Craig Kassel. After their parents died, Susan and Peggy (together, Plaintiffs) filed a lawsuit against Craig, Craig's wife, two of Craig's corporations, and Kassel Enterprises, the family farming operation that the parents incorporated. Plaintiffs sought judicial dissolution of Kassel Enterprises under Iowa Code 490.1430(1)(b)(2) and 490.1430(1)(b)(4). Kassel Enterprises elected to purchase Plaintiffs' shares for fair value in lieu of a judicial dissolution of the corporation. Both sides appealed the district court's determination of fair value. The Supreme Court reversed in part, holding (1) remand was required for the court to determine and apply the appropriate deduction of transaction costs to the value of the corporation's assets in setting the fair value of Plaintiffs' shares; and (2) the district court's judgment was otherwise affirmed.