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                               APPROVAL OF THE APPELLATE DIVISION
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                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-0495-16T2
















           Argued February 10, 2020 – Decided August 19, 2020

           Before Judges Messano, Ostrer and Susswein.

           On appeal from the Superior Court of New Jersey,
           Chancery Division, Bergen County, Docket No.

           Paul A. Sandars III argued the cause for appellants
           Koger, Inc., Koger Distributed Solutions, Inc., Koger
           Professional Services, Inc., and Koger Limited
           (Dublin) (Lum, Drasco & Positan, LLC, attorneys; Paul
           A. Sandars III and Bernadette Hamilton Condon, of
           counsel and on the briefs).

           Joseph P. LaSala argued the cause for appellant
           Rastislav Sipko (McElroy Deutsch Mulvaney &
           Carpenter, LLP, and Neal H. Flaster, attorneys; Joseph
           P. LaSala, of counsel, Neal H. Flaster, on the briefs).

           Appellant Rastislav Sipko filed a pro se reply brief in

            Michael S. Stein argued the cause for respondent
            (Pashman Stein Walder Hayden, PC, attorneys;
            Michael S. Stein and Dennis T. Smith, of counsel and
            on the briefs; Erik M. Corlett and Timothy Patrick
            Malone, on the briefs).


      We consolidated these two appeals which arise from proceedings that

followed the Supreme Court's remand in Sipko v. Koger, Inc.,  214 N.J. 364

(2013). Since we write solely for the parties who are intimately familiar with

the facts, we do not repeat the evidence adduced at the 2008–09 trial, which the

Court explained in detail, id. at 367–72, except as necessary to provide some

background and context for the issues now raised.

      In 2000, defendant George Sipko, an experienced computer programmer

who emigrated from Slovakia and formed Koger, Inc. (Koger), gifted 1.5% of

the company's stock to his two sons, plaintiff Robert Sipko and defendant

Ratislav (Ras) Sipko, who were both actively involved in the company's

business. 1 Id. at 369. The gift was not recorded by any writing. Ibid. George

also formed Koger Distributed Solutions, Inc. (KDS), and Koger Professional

  To avoid confusion, we use the first names of the family members. We intend
no disrespect by this informality.

Services, Inc. (KPS), in 2002 and 2004 respectively, with Robert and Ras each

owning 50% of each company's shares.2 Ibid. The companies were formed as

part of George's estate planning, although, at trial, the parties differed as to

whether KDS and KPS developed their own products or served solely as

licensing mechanisms for Koger's products and conduits for its income. Id. at


      KDS and KPS reported substantial income in their first years, and all

profits from the three Koger companies were shared at George's direction with

George receiving 50%, and Robert and Ras each receiving 25%. Id. at 370. The

relationships soured in fall 2005 because of Robert's romantic involvement with

a woman of whom his mother disapproved. Id. at 370–71. At trial, the parties

disputed what happened next, with Robert claiming his father physically

threatened and coerced him into signing various documents, and George and Ras

denying those claims and stating that Robert voluntarily executed the

documents. Id. at 371. Robert admitted that, on February 3, 2006, he signed

stock certificates transferring his interests in KDS and KPS back to the company

"[f]or Value Received," but claimed he did so under duress and that someone

  Koger Limited (Dublin) was formed to facilitate operations in Ireland. Id. at
369. Throughout this opinion, we will sometimes refer to the companies
collectively as "Koger."
had backdated the KPS certificate to December 31, 2004. Id. at 371 (alteration

in original).

      Robert resigned from Koger on March 10, 2006 and remained estranged

from his family. Id. at 372. Later that year, at a board meeting, George

purportedly recalled Robert's 1.5% interest in Koger effective the date of his

resignation. Ibid. Robert eventually filed suit.

      In its January 2009 decision, the trial court found "Robert's testimony to

be more compelling than that of George and Ras with respect to George's gift of

1.5% of Koger stock . . . [and] held that the gift was unconditional and effective."

Id. at 373. However, rejecting Robert's oppressed shareholder claim, the court

denied his request for a buyout of his interest in Koger and, as a result, Robert

remained a 1.5% shareholder in the company. Ibid. Regarding KDS and KPS,

the trial judge held that the companies "had no value as distinct companies and

that the contracts in those companies' names were, in reality, Koger contracts

dependent upon the licensing of Koger products[,]" and that Robert recognized

"that his interests in KDS and KPS had no value, [and] voluntarily surrendered

those interests, probably in February 2006." Ibid.

      On appeal, we reversed the trial court's finding that George's gift of Koger

stock to Robert was unconditional, "deeming it unsupported by the evidence."

                                          5 Id. at 374.   We also reversed the trial court's decision regarding Robert's

surrender of his stock interests in KDS and KPS, finding the transfer lacked

consideration. Ibid. Our May 2011 judgment resulted in Robert's reinstatement

as a 50% shareholder in KPS and KDS. The Court granted certification "limited

to the question[s] of whether George's gift of Koger stock was conditioned on

Robert's continued employment at Koger[,] . . . [and] whether Robert retain[ed]

his holdings in KDS and KPS." Id. at 374 (citation omitted).

      The Court issued its decision in July 2013. Regarding the first issue, the

Court reversed our judgment, reinstated the trial court's holding that George's

gift of Koger stock was unconditional, and restored Robert's 1.5% interest in

Koger. Id. at 377–78. The Court's resolution of the second issue, and the result

of its remand to the trial court, form the backdrop for the present appeals.

      As a preliminary matter, the Court concurred with our judgment that the

trial court's finding that KDS and KPS lacked any value "was not supported by

the evidence." Id. at 379. It noted that, in 2006, both companies had substantial

revenue, and, at trial, Robert presented the testimony of an expert, Hubert Klein,

who valued KDS at $1,547,278, and KPS at $34,973,236, at the time Robert

filed his complaint. Ibid. The Court noted that defendants failed to rebut those

valuations, and, instead "instructed their valuation expert not to separately

calculate the value of the two companies." Ibid. The Court held "the trial court's

conclusion that KDS and KPS were devoid of value cannot be sustained.

Instead, . . . Robert's interests in KDS and KPS clearly had value, which was not

quantified by the factfinder."    Id. at 380.   The Court concurred with our

conclusion that "substantial credible evidence support[ed] a finding the

transactions lacked consideration, and are therefore void. . . . Robert did not

relinquish his interests in KDS or KPS." Id. at 381.

      The Court then addressed the issue of "fashioning an appropriate

remedy[,]" which was "complicated by the procedural posture of th[e] case."

Ibid. It observed that the trial court had treated Koger, KDS, and KPS as a single

entity, and, upon concluding Robert failed to prove shareholder oppression,

dismissed his request to rescind the stock transfers for lack of consideration,

Robert's claim that George and Ras breached their fiduciary duties, and Robert's

demand for an accounting. Id. at 381–82. The Court "require[d] the trial court

to reinstate all of Robert's enumerated claims as they relate to KDS and KPS,

and to consider those claims on their merits." Id. at 382.

      The Court expressly left intact the trial court's and our determination that

Robert failed to demonstrate shareholder oppression. Ibid. Nonetheless, it held

that "a minority shareholder's failure to demonstrate conduct that rises to the

level of oppression does not necessarily deprive him of a remedy[,]" because the

oppressed shareholder statute,  N.J.S.A. 14A:12-7(1)(c), "does not limit the

equitable power of the courts to fashion remedies appropriate to an individual

case." Id. at 382–83 (citing Brenner v. Berkowitz,  134 N.J. 488, 512, 514

(1993)).3 Accordingly, the Court also remanded "for consideration of what, if

any, remedy is appropriate." Id. at 383. It held, "[T]he trial court has broad

discretion to consider such statutory and equitable remedies as may be

appropriate to this setting, including but not limited to an accounting of the

income and expenditures of KDS and KPS." Id. at 383–84 (emphasis added).

                     The Remand and Entry of Judgment

      Within weeks of the Court's decision, the trial judge conducted a hearing

and the parties staked out their positions. Robert argued he was entitled to a

buyout of his 50% interests in KDS and KPS in an amount based on the expert

valuations at trial, or, alternatively, he requested an accounting. Defendants

argued Robert was only entitled to a return of his 50% interests in the two


   Under the statute, a 50% shareholder in a corporation may be deemed a
minority shareholder, "[b]ecause a [50%] shareholder cannot direct outcomes as
a 51% shareholder can, [and] he does not have 'control' of the corporation."
Sipko,  214 N.J. at 382 n.7 (quoting Balsamides v. Protameen Chems. Inc.,  160 N.J. 352, 371 n.7 (1999)).
      After considering the parties' briefs and oral argument, the judge issued a

written decision.   He noted that the Court's conclusion that Robert's stock

transfers were void meant as a matter of law that he "never ceased being a [50%]

owner." The court declined Robert's request for a buyout of his interests in KDS

and KPS because Robert had failed to identify oppression, fraud, illegality,

mismanagement, or misconduct by the defendants. However, the court agreed

that an accounting was appropriate, after which it would reconsider the buyout

remedy. The accounting was to include "all revenues and distributions, assets

and liabilities of both KDS and KPS, [from] January[] 2006 to the present, and

including an accounting of the use and disposition of all assets, including

contracts, for that time period."

      The judge also revisited the alleged backdating of the surrendered KPS

stock certificate, noting that he reached no conclusion after trial about the

circumstances because he had determined the stock in both companies lacked

any value. However, because the Court recognized that KDS and KPS had

independent value, he intended to reconsider the issue. Based on the trial

evidence, the judge concluded that Ras backdated the certificate, or caused

someone else to backdate it, and intended to deprive Robert of the economic

benefits of his KPS ownership interests between December 2004 (the misdated

date of transfer) and February 2006, when Robert acknowledged his surrender

of the shares. Despite this finding of misconduct, the judge did not conclude

immediately that it justified a buyout. He ordered Ras to conduct an accounting

of the two companies.

      The accounting Ras produced was, to say the least, revealing. Although

KDS had entered into licensing agreements with third parties in the interim, one

contract was assigned to Koger and the others essentially lapsed without

renewal. According to the accounting, KDS entered no new contracts thereafter

and filed a certificate of dissolution in June 2009. As to KPS, the accounting

revealed it had entered a number of new contracts with third parties in 2005 and

2006; several were assigned thereafter to Koger and others terminated or were

not renewed.4 KPS entered no new agreements after 2007.

      After receiving the accounting, Robert submitted a report prepared by

Withum, Smith & Brown, PC, an accounting firm, authored by one of its

partners, William J. Morrison. The report analyzed the revenues earned by the

two companies. KDS earned $447,749 in revenue in 2005, and $455,925 in

  In his written opinion following trial, the judge wrote that prior to his departure
in 2006, "Robert was a foundation pillar in the Koger enterprises. The nature
and extent of his very significant contributions were established during the
trial. . . . It was unclear whether the company would even survive his
2006, but nothing thereafter.    KPS earned $5,149,575 in revenue in 2006,

$8,994,899 in 2007, and $8,086,147 in 2008; however, in 2009, KPS earned less

than $200,000, and in 2010, less than $100,000. The report determined that the

companies' revenues declined dramatically after "certain clients were assigned

or 'transferred' to Koger," and concluded that substantial KPS revenue streams

were diverted to Koger in the midst of the litigation.

      Defendants submitted their rebuttal report, prepared by the accounting

firm of Wilkin & Guttenplan, PC. The report criticized Morrison's analysis and

asserted that because all of KDS's and KPS's clients originally came from Koger,

the companies were "not viable businesses without the discretionary grace

bestowed upon them by Koger" to use its intellectual property. Wilkin provided

no alternative valuation of KDS and KPS.

      After again considering oral argument, the judge issued his final decision

on July 27, 2016. He explained that the accounting was ordered to ascertain

what happened to the "exceedingly valuable contracts" held by KDS and KPS.

The issue the court sought to resolve was: "[W]hat remedy if any is . . . Robert

. . . entitled to beyond the post-remand, court-ordered accounting[?]" Echoing

the Court's determination that KDS and KPS were distinct legal entities with

independent value and substantial revenues at the time Robert filed his

complaint, the judge concluded that Ras and George acted in concert to "shield

from recovery . . . any value [Robert] might achieve in the litigation" by

transferring licensing contracts from KPS and KDS to Koger and, that,

beginning in 2008, "Ras and George caused KPS contract revenue to flow to

Koger." The judge concluded that Ras's backdating of the KPS stock certificate

was "an effort to deprive Robert of the value of his interest in KPS attribut able

to certain contracts negotiated by Robert in 2005, which began to yield rich fruit

in 2006." The judge found defendants' actions decreased the value of Robert's

property and were unlawful, as the transfers were done "in complete derogation

of corporate formalities" and with the "specific purpose of shielding value from

Robert[] and absorbing it into Koger."

      The judge rejected Ras's explanation that the value of KDS and KPS

decreased because of Robert's voluntary departure. He also rejected George's

explanation that he could "do whatever he liked with KDS and KPS" because he

controlled Koger. The court found that, although George exercised de facto

control over KDS and KPS, he had no ownership interest in them.

      The judge rejected defendants' assertion that the Court limited Robert's

remedy on remand to the return of his 50% interests in KDS and KPS.

According to the judge, "Seen in the light of the post-remand record, it is clear

that value has been deliberately diverted by Ras and George precisely to put it

beyond Robert's reach. Equity cannot abide that." The judge wrote, "The

undisclosed assignment of assets, the redirect of contract revenues, the

backdating of the stock certificate, the misrepresentation and nondisclosure of

assets in the KDS account at the time of the original trial, properly require a


      Because KDS and KPS were essentially worthless, the judge determined

a third-party sale or forced dissolution of the companies would be empty

remedies. Therefore, the judge concluded that the "only appropriate available

remedy" was to impose a buyout obligation upon defendants and order them to

pay Robert the value of his 50% interest in KDS and KPS as of the date Robert

filed the complaint. The judge accepted the unrebutted opinion Klein offered at

trial, noting the court's "post-remand invitation to the defense to consider

another expert was rebuffed."

      The judge concluded, "Robert's value [was] not zero. No alternative but

zero has been put forth by the defense." The judge determined Robert's 50%

interests in KDS at the date of valuation was $773,642, and his 50% interest in

KPS as of that date was $17,486,618, i.e., 50% of Klein's valuations. The court

imposed the obligation upon Ras as the remaining shareholder, and upon George

and Koger, as the beneficiaries of Robert's interests in KDS and KPS.

      Following hearings to settle its form, the court's August 19, 2016

judgment awarded Robert damages against KPS, KDS, George, Ras, and Koger,

jointly and severally, for $24,697,571.14, which included pre-judgment interest.

The court imposed a constructive trust on Koger's profits and enjoined Koger,

George, and Ras from transferring any assets until full satisfaction of the

judgment or the posting of an appropriate bond. The judge stayed execution on

the judgment for thirty days to permit the posting of a supersedeas bond pending


      The judge denied defendants' motion for reconsideration and to post

alternative security for a stay pending appeal by order dated September 26, 2016.

Defendants filed their appeal (A-0495-16).

                      Events following Entry of Judgment

      Defendants then filed an application on short notice to post alternative

security, supported by certifications from George and Ras proposing to post their

entire 98.5% interest in Koger. Additionally, Ras offered to post $3 million in

cash and real property in Connecticut that he valued at $6.75 million. On

September 30, 2016, the judge entered an order granting the posting of this

alternative security, conditioned upon defendants providing a sworn accounting

of assets and liabilities, foreign and domestic. The order also provided that if

the court found, "after notice and hearing," any material misrepresentation in the

sworn accounting, it would forfeit defendants' posted cash, deed, and stock in

partial satisfaction of the judgment and vacate the stay. 5 Finally, the court

ordered defendants to provide "audited financial statements within 100 days,"

and enjoined them from encumbering, secreting, or transferring any assets

outside the ordinary course of business.

       On October 28, 2016, defendants submitted unaudited financial

statements, in which the accounting firm noted that defendants did not ask it to

verify the accuracy or completeness of the information provided by defendants.

The accountants noted that defendants "elected to omit substantially all the

disclosures ordinarily included in the statement of financial condition prepared

in accordance [with] generally accepted accounting principles." The financial

disclosures contained no backup documentation and asserted that George had a

total net worth of $44,051,100, and Ras's net worth was $21,729,700.

       On November 7, the court granted Robert's request to appoint a special

fiscal agent (SFA) to oversee Koger. In an oral decision, the judge said that the

    A subsequent corrective order added other New Jersey properties as security.
appointment was not based upon any finding of misconduct by defendants or

misrepresentation in their disclosures. However, because defendants intended

to post alternative security, it was appropriate to appoint an SFA so information

regarding the true value of the Koger stock pledge would be available.

      Robert moved for further relief, which the court partially granted in its

December 13, 2016 order. Noting that defendants had yet to post the Koger

stock or the real properties as security, and their continued "inability or refusal

to cooperate," the judge ordered the Koger stock and the properties be

immediately pledged to the SFA's satisfaction. He also required that defendants

supply documents supporting the financial statements previously furnished to

the court. Additionally, the order required defendants to file within thirty days

a sworn accounting of transactions by Koger which exceeded $50,000, and any

by George or Ras that exceeded $10,000, from September 30, 2015, through

November 30, 2016 (the look-back accounting).

      While motion practice continued, defendants filed the look-back

accounting with the SFA on January 13, 2017. It revealed that George and Ras

had transferred approximately $20 million in cash to overseas accounts in a

series of transactions between July 28, 2016 — one day after the judge issued

his final decision on remand — and August 11, 2016, approximately one week

before entry of judgment. According to the accounting, these t ransfers were

made to satisfy loan obligations incurred by George and Ras.

      Robert filed an order to show cause, certifying those named as recipients

of the transfers were George's sister, nephew and the wife or daughter of

George's brother-in-law. He asserted the purported purpose of the transfers was

a sham, and the true intent was to thwart Robert's ability to collect on the

judgment. He identified other wire transfers in the accounting for approximately

$2 million that were unexplained.

      George and Ras filed a cross-motion, in which they sought a hearing as to

the fair market value of the security they had posted. Ras also claimed that only

$3 million of the transfers were made by him, and he provided details alleging

the payments were made on account of loans he and George obtained to purchase

properties in Slovakia, and to preserve those properties as assets to satisfy the

judgment if necessary. Ras explained that full repayment of $17 million on one

loan was due in August 2016. In his certification, George confirmed these

details and attempted to explain the additional $2 million in transfers shown in

the accounting.

      The judge heard oral argument on these pending applications and issued

an order and written decision on February 13, 2017. Among other things, based

upon defendants' admitted transfer of money overseas immediately following

the decision on remand, the judge vacated the stay and ordered the forfeiture of

the $3 million and New Jersey properties previously posted as security. The

order imposed a constructive trust on George's and Ras's "assets and income,"

and awarded Robert counsel fees. In a corrected order filed February 28, the

court added Ras's Connecticut property to the list of forfeited assets.

      George and Koger filed an appeal from these post-remand orders (A-3128-

16), and Ras filed a separate appeal (A-3129-16).

      Robert subsequently moved to dismiss George's and Koger's appeals

based on the fugitive disentitlement doctrine (FDD), see, e.g., Matsumoto v.

Matsumoto,  171 N.J. 110, 128–29 (2002), citing the remand court's conclusion

that George fled the jurisdiction after secretly diverting assets overseas to

frustrate Robert's ability to collect on the judgment, and the court's threat of

imprisonment unless the assets were returned. 6 On February 14, 2020, we

granted Robert's motion to dismiss George's appeal in A-0495-16 pursuant to

the FDD, however, we denied Robert's motion to dismiss the appeal as to Koger,

  After ordering George and Ras to return the monies diverted overseas or face
incarceration, the trial court issued a warrant for George's arrest on July 18,
2018, after he failed to appear in court for a hearing.

which remains an on-going business under the SFA's stewardship. The Supreme

Court denied George's motion seeking leave to appeal our order on an

interlocutory basis. ___ N.J. ___ (2020).

      Thus, in A-0495-16, the appeal proceeds only as to Ras and Koger. The

effect of our order dismissing George's appeal is that some of the specific

arguments raised in the joint brief filed by George and Koger are no longer

before us, because they dealt with contentions that relate solely to George and

sought relief personal to him.

      George and Koger consented to dismissal of A-3128-16, and we entered

an appropriate order dismissing the appeal. 7 As a result, we only consider the

issues Ras raises in A-3129-16.

                                 As to A-0495-16


      Koger and Ras both argue that the judge abused his discretion by

expanding the scope of the remand ordered by the Court. Koger also contends

that the judge's order to provide an accounting of KPS's and KDS's assets

improperly considered events that occurred years after trial, and that Robert

  Robert also sought to dismiss two other appeals brought by George and Koger
based on the FDD, A-0666-17 and A-1960-17. They consented to the dismissal,
and we entered appropriate orders dismissing those appeals.
should have been required to file a new complaint if he was alleging post-trial

conduct justified relief beyond restoration of his 50% interests in KPS and KDS.

Both Koger and Ras argue that, at the least, the judge was required to hold an

evidentiary hearing before concluding that the companies willfully transferred

assets to Koger to avoid Robert's reach. We disagree.

      Initially, the Court specifically reinstated certain "enumerated claims" in

Robert's complaint, including his claim that "George and Ras breached their

fiduciary duties" and "his demand for an accounting of income streams and

disbursements relating to KDS and KPS during the relevant years to which he

may be entitled recompense . . . ." Sipko,  214 N.J. at 382. The Court concluded

that Robert's surrender of his stock in the two companies was void for lack of

consideration and ordered the judge on remand to "determin[e] . . . Robert's

claims . . . and . . . consider[] . . . what, if any, remedy is appropriate[,]" citing

the judge's "broad discretion to consider such statutory and equitable remedies

as may be appropriate . . . including but not limited to an accounting of the

income and expenditures of KDS and KPS." Id. at 383–84 (emphasis added).

The remand court's August 2014 order requiring Ras to conduct an accounting

of both companies was entirely consistent with the Court's remand. Moreover,

at the first hearing on remand, as stated by their counsel, defendants did not

object to producing "whatever financial statements [Robert] want[s] from these

two companies[.]"

      The accounting demonstrated that simply restoring Robert's interests in

KDS and KPS was not a meaningful remedy. We fail to see the merit of Koger's

argument that the judge was somehow forbidden from fashioning an appropriate

remedy if it relied on defendants' post-trial conduct. We discuss the court's

broad equitable powers below.

      Both Koger and Ras argue that the judge was required to hold an

evidentiary hearing before he could determine they illegitimately diverted

revenue streams from KPS and KDS to Koger with the purpose to hollow out

the companies' values. Robert argues that no one asked for additional testimony

or discovery, particularly since defendants' asserted position was that a buy -out

was inappropriate in the absence of shareholder oppression, and Robert was only

entitled to his 50% interest in the two companies "going forward."

      Defendants' arguments regarding the trial court's refusal to conduct

discovery or hold a plenary hearing lack any citation to the record. We note that

in his letter decision denying defendants' motion for reconsideration, where the

argument was made as a basis for relief, the judge said that he never denied a

request to depose Klein, plaintiff's trial expert, and was "unaware of any request

to depose [Morrison,] and the court . . . never denied any request to depose that

expert or any expert."

      However, after Robert furnished Withum's report in response to Ras's

accounting, defendants did request to take Morrison's deposition. The judge

denied the request without prejudice, since defendants intended to furnish their

own report, i.e., the report from Wilkin & Guttenplan. Nothing in the record

indicates defendants ever renewed the request.

      Regarding other discovery, we note that during the July 11, 2013 hearing,

which was the first hearing on remand, defense counsel argued that the only

remedy Robert was entitled to, if any, was restoration of his 50% interest in KDS

and KPS and dissolution of both companies. 8 When the judge mused, "we know

the bones have been picked, so that really it will just lead into a fraudulent

conveyance type case[.]" Counsel replied "[t]hen we need to take discovery,

because our position is that distributions and income and expenses were made

  During the remand leading up to judgment, all defendants were represented
by the same counsel, who is George's and Koger's appellate counsel. Ras had
separate counsel during some of the post-judgment hearings, appeared pro se in
some, and has separate counsel on appeal.

at a time when there was no lawsuit and there was a resignation and . . . a give

back of stock." 9

      We found no other request by defendants for discovery, nor has any been

cited to us. The transcript of a hearing held on May 5, 2015, reveals that both

counsel signaled their agreement that no further discovery was necessary and

each would brief and argue their positions as to what remedy, if any, was


      In his letter opinion denying the motion for reconsideration, the judge


               [T]he parties advised the court that the discovery
               aspects of the case were concluded, and that the court
               would be presented the matter for post-remand decision
               based on the parties' written submissions and the
               argument of counsel. That is exactly what occurred.
               The court did not preclude a testimonial hearing; the
               parties, through their counsel, elected not to have one.

Defendants fail to cite anything in the record to refute the judge's

characterization of the procedural aspects of the remand hearing. We therefore

reject the claim that defendants were denied additional discovery or an

evidentiary hearing prior to the court's entry of judgment.

 This is the only support in the record that we could find for Koger's claim that
Robert had to file a new lawsuit to obtain relief based on the post-trial transfers.
      Koger and Ras both argue that the judge erred by concluding the post-trial

transfer of assets from KDS and KPS to Koger and payments made by those

companies to Koger were improper. Koger cites trial testimony from Robert

that reflected his belief that the two companies totally relied on Koger's

willingness to allow the use of Koger licenses, and that both were essentially

shell companies beholden to Koger's beneficence. It cites to the court's findings

following trial that support these conclusions. Koger further contends that

without holding a hearing, the judge made credibility findings, rejecting

legitimate business reasons for the transfers proffered in certifications filed by

George and Ras.10

      Our standard of review of the factual findings and legal conclusions of the

trial judge following a non-jury trial is as follows:

                   Final determinations made by the trial court
            sitting in a non-jury case are subject to a limited and
            well-established scope of review: "we do not disturb
            the factual findings and legal conclusions of the trial
            judge unless we are convinced that they are so
            manifestly unsupported by or inconsistent with the

    Ras posits the argument by claiming the judge's conclusion was "contrary to
the weight of the evidence." Rule 2:10-1 provides: "In both civil and criminal
actions, the issue of whether a jury verdict was against the weight of the
evidence shall not be cognizable on appeal unless a motion for a new trial on
that ground was made in the trial court." (Emphasis added). A challenge to a
verdict as being against the weight of the evidence is inapplicable to a bench
trial. Fanarjian v. Moskowitz,  237 N.J. Super. 395, 406 (App. Div. 1989).
            competent, relevant and reasonably credible evidence
            as to offend the interests of justice[.]"

            [Seidman v. Clifton Sav. Bank, SLA,  205 N.J. 150, 169
            (2011) (alteration in original) (quoting In re Trust
            Created By Agreement Dated December 20, 1961, ex.
            rel. Johnson,  194 N.J. 276, 284 (2008)).]

After his review of the accounting filed by Ras, Morrison's expert report, and

Wilkin & Gutteplan's expert report, there was ample evidence to support the

judge's conclusions that the post-trial conduct of KDS and KPS was in stark

contrast to their prior business conduct and stripped the companies of all value

to Koger's benefit.

      For example, according to Morrison's report, several contracts with KPS

remained in place after the litigation commenced. The judge found that the

contracts were automatically renewable by KDS and KPS. But, whereas KPS

received substantial income from those contracts in the past, it received no

revenue from them in 2009 and 2010. At the same time, the accounting revealed

substantial invoices from Koger to those same clients.

      The judge also found that there was no legitimate justification for a sudden

and complete diversion of revenue streams. The asserted position that these

clients were previously Koger's clients anyway was not an adequate explanation

or justification for the change or its timing. Regarding defendants' intention, the

judge relied heavily on the backdating of Robert's KPS stock surrender, noting

the issue was somewhat irrelevant at the time of trial because he had found both

companies to be worthless. However, on remand, the judge properly followed

the Court's instructions, accepting, as he was required to do, that both companies

had value and that Robert was, and remained, a 50% owner of both.

      As a corollary argument, defendants argue that the unilateral transfer of

licensed assets from the two companies to Koger was consistent with the judge's

findings following trial, i.e., that KDS and KPS had no independent value.

Therefore, any transfers could not have been made with an intent to devalue the

two companies. However, some of the license transfers occurred after Robert

filed his complaint and before the trial court's initial decision. Others occurred

after Robert filed an appeal, specifically contesting the transfer of his interests

in KDS and KPS because it lacked consideration.

      In his final decision on remand, the judge initially rejected defendants'

assertion that this conduct was "shielded by the business judgment rule." The

business judgment rule "protects a board of directors from being questioned or

second-guessed on conduct of corporate affairs except in instances of fraud, self-

dealing, or unconscionable conduct." In re PSE&G S'holder Litig. v. Codey,

 173 N.J. 258, 276–77 (2002) (quoting Maul v. Kirkman,  270 N.J. Super. 596,

614 (App. Div. 1994)). The rule is a rebuttable presumption. Id. at 277. A

challenger must initially demonstrate a corporate decision evidenced the

decision-maker's "self-dealing or other disabling factor." Ibid. (quoting Maul,

 270 N.J. Super. at 614). Upon rebutting the presumption, the burden shifts to

the decision-maker "to show that the transaction was, in fact, fair to the

corporation." Ibid. (citations omitted).

       The judge found Ras's claim that Robert's departure required these abrupt

deviations from the established practices of KDS and KPS regarding contracts

with   clients,   and   the   revenue      stream   from   those   contracts,   was

"unsubstantiated." Ras initially asserted that he could no longer operate the two

businesses alone and chose, instead, to "out-source[]" the work to Koger.

However, the judge noted that this outsourcing in some cases preceded actual

assignments of the licenses to Koger "in complete derogation of corporate

formalities." The judge rejected George's claim that he "could do whatever he

liked with KDS and KPS" as "legally untenable." In his written final decision

on remand, the judge rejected defendants' assertion of the business judgment

rule, concluding it could not be used to "shield" their conduct regarding KDS

and KPS "where it has the direct effect of enriching some family members at the

direct expense of one family member."

      Defendants raised the argument again in their motion for reconsideration,

which was supported by Ras's extensive certifications that provided some details

regarding the transfer of these assets.      The judge refused to consider the

certifications.   In his written decision supporting the order denying

reconsideration, the judge quite correctly noted that defendants engaged in "an

improper attempt to augment the agreed upon record with purported facts which

should or easily could have been put forth" before.

      It is axiomatic that "the decision to grant or deny a motion for

reconsideration rests within the sound discretion of the trial court ." Pitney

Bowes Bank, Inc. v. ABC Caging Fulfillment,  440 N.J. Super. 378, 382 (App.

Div. 2015). Reconsideration

             is not appropriate merely because a litigant is
             dissatisfied with a decision of the court or wishes to
             reargue a motion, but

                   should be utilized only for those cases
                   which fall into that narrow corridor in
                   which either 1) the Court has expressed its
                   decision based upon a palpably incorrect or
                   irrational basis, or 2) it is obvious that the
                   Court either did not consider, or failed to
                   appreciate the significance of probative,
                   competent evidence.

             [Palombi v. Palombi,  414 N.J. Super. 274, 288 (App.
             Div. 2010) (quoting D'Atria v. D'Atria, 242 N.J. Super.
             392, 401 (Ch. Div. 1990)).]

"Alternatively, if a litigant wishes to bring new or additional information to the

Court's attention which it could not have provided on the first application, the

Court should, in the interest of justice (and in the exercise of sound discretion),

consider the evidence." Cummings v. Bahr,  295 N.J. Super. 374, 384 (App. Div.

1996) (quoting D'Atria,  242 N.J. Super. at 401–02).

      Trial courts may also refuse to consider such certifications when the

"factual predicates" of a party's "new theory" were available before the court's

initial decision. Ibid. We have not hesitated to affirm denials of reconsideration

by the trial court where premised upon evidence that the moving party could

have produced earlier. Palombi,  414 N.J. Super. at 289 (citing Del Vecchio v.

Hemberger,  388 N.J. Super. 179, 188–89 (App. Div. 2006)).

      Koger and Ras do not explicitly challenge the judge's decision not to

consider the certifications. We find no abuse in the judge's exercise of his

discretion to deny reconsideration. The Court remanded the case in 2013. The

judge held the first hearing on remand within weeks of the decision. Defendants

had ample opportunity to explain any purported legitimate business reason for

the transfers well before the judge's July 2016 written decision, but they offered

only the ones noted by the judge in that decision.

      In sum, there was ample support for the judge's conclusion that defendants

diverted revenue from KDS and KPS with a purpose to shield the assets of those

corporations from Robert's reach. We reject both the procedural and substantive

challenges to that finding.


      Koger argues Robert was not entitled to a buyout remedy because he failed

to prove shareholder oppression, a finding by the trial court that was left

undisturbed by our judgment and the Court's decision. 11 Koger cites  N.J.S.A.

14A:12-7(1)(c), which provides for the court-ordered sale of stock in a

corporation having twenty-five or less shareholders when "the directors or those

in control have acted fraudulently or illegally, mismanaged the corporation, or

abused their authority as officers or directors or have acted oppressively or

unfairly toward one or more minority shareholders[.]" However, the trial judge

did not rely on the statute in fashioning his remedy.

      Robert's amended complaint sought to rescind the 2006 transfer of his

stock in the two companies because it lacked consideration. The Court affirmed

our holding that the transfers were void, thereby affirming that Robert was

  Ras makes no argument that the buyout remedy was unavailable to the remand
judge. "An issue not briefed on appeal is deemed waived." Sklodowsky v.
Lushis,  417 N.J. Super. 648, 657 (App. Div. 2011).
entitled to an appropriate remedy. Sipko,  214 N.J. at 381. The judge never

relied on the statute in ordering the buyout, nor was relief on remand limited by

the lack of a finding of shareholder oppression. Id. at 383 (noting despite the

failure to prove oppression, "a broad range of remedies" remained available, and

the statute did "not limit the equitable power of the courts to fashion remedies

appropriate to an individual case" (citing Brenner,  134 N.J. at 512, 514–15)).

      After Ras furnished the accounting, and after the judge considered the

reports from each side, he faced a dilemma. Since the value of Robert's 50%

interests in KDS and KPS had been "absorbed into Koger," what additional

remedy, if any, was appropriate under the circumstances? The judge concluded

merely restoring Robert's shares was "an intolerable result."      He therefore

ordered the purchase of Robert's 50% interest in both companies, valued as of

the date of trial.

      Koger argues this was an abuse of the judge's equitable powers and, in the

absence of a finding of shareholder oppression, it exceeded any remedy

suggested by the Court's reference to Brenner. We disagree.

      In Brenner, the Court held that  N.J.S.A. 14A:12-7 provides remedies for

corporate misconduct that does not rise to the level of shareholder oppression.

 134 N.J. at 506–07. The Court emphasized that the statute provides a court with

broad discretion in fashioning an appropriate remedy to address the misconduct,

beyond dissolution of the corporation, which is "an extreme remedy to be

imposed with caution[.]" Id. at 510–11. The Court held that while  N.J.S.A.

14A:12-7(8) only authorized a voluntary stock buy out, "in appropriate

circumstances a court exercising its equitable powers, as an alternative to

dissolution, could compel the purchase of a shareholder's stock by the

corporation; under exceptional circumstances, the court's equitable power might

encompass the power to compel an involuntary buy-out by the other

shareholders." Id. at 513. Contrary to Koger's contention, neither the statute

nor the Court's decision limited the remand court's equitable powers to fairly

restore Robert to his rightful ownership share of the two companies.

      The immediate remedy available on remand was, of course, rescinding the

2006 stock transfers, one specific claim for relief pled in Robert's complaint.

"Rescission is an equitable remedy" and, for it to be available, "[t]he court must

be able to return the parties to the 'ground upon which they originally stood.'"

Intertech Assocs., Inc. v. City of Paterson,  255 N.J. Super. 52, 59 (App. Div.

1992) (quoting Hilton Hotels Corp. v. Piper Co.,  214 N.J. Super. 328, 336 (Ch.

Div. 1986)); see also Am. Container Corp. v. Hanley Trucking Corp.,  111 N.J.

Super. 322, 334 (Ch. Div. 1970) ("The law is clear that a rescission contemplates

a return to status quo ante." (citing Medivox Prods., Inc. v. Hoffmann-LaRoche,

Inc.,  107 N.J. Super 47, 75–76 (Law Div. 1969))). Under the facts presented

here, rescission alone was an inequitable remedy.

      We have said that "a judge sitting in a court of equity has a broad range

of discretion to fashion the appropriate remedy in order to vindicate a wrong

consistent with principles of fairness, justice, and the law." Graziano v. Grant,

 326 N.J. Super. 328, 342 (App. Div. 1999). "[A] court's equitable jurisdiction

provides as much flexibility as is warranted by the circumstances[.]" Matejek

v. Watson,  449 N.J. Super. 179, 183 (App. Div. 2017). "[A] court of equity

should not permit a rigid principle of law to smother the factual realities to which

it is sought to be applied." Graziano,  326 N.J. Super. at 342 (citing Grieco v.

Grieco,  38 N.J. Super. 593, 598 (App. Div. 1956)). "Equity will not permit a

wrong to be suffered without affording the appropriate remedy." Ibid. Most

importantly for our purposes, "[d]ecisions concerning [the application of an

equitable doctrine] ordinarily are left to the sound discretion of the trial court.

'An appellate court should not substitute its judgment for that of the trial judge

unless there is a showing of clear abuse of that discretion.'" Feigenbaum v.

Guaracini,  402 N.J. Super. 7, 17 (App. Div. 2008) (second alteration in original)

(quoting Kurzke v. Nissan Motor Corp. in U.S.A.,  164 N.J. 159, 165 (2000)).

      The remand judge did not abuse his discretion in ordering the forced

buyout of Robert's interests in the two companies. There was no other equitable

remedy in light of the court's findings and conclusions regarding defendants'

conduct, which, as noted above, were amply supported by the record.


      Koger challenges the entry of judgment holding it jointly and severally

liable.12 In his written decision supporting the judgment, the judge reasoned that

George and Koger were "beneficiaries of the value of Robert's interests in KDS

and KPS, of which he would otherwise be deprived." After oral argument

considering the form of judgment, the judge noted defendants' continued claim

that KDS and KPS were "shells" and essentially worthless. He reiterated that

"the other defendants . . . received the benefit of that which had not gone to . . .


      Essentially, the judge concluded Koger had been unjustly enriched by the

diversion of assets. "To establish unjust enrichment, a plaintiff must show both

that defendant received a benefit and that retention of that benefit without

payment would be unjust." VRG Corp. v. GKN Realty Corp.,  135 N.J. 539, 554

  Much of the argument challenges George's personal liability for the judgment.
For reasons already explained, we do not address the issue.
(1994) (citing Assocs. Commercial Corp. v. Wallia,  211 N.J. Super. 231, 243

(App. Div. 1986)). "A person who is unjustly enriched at the expense of another

is subject to liability in restitution." Restatement (Third) of Restitution and

Unjust Enrichment § 1 (Am. Law Inst. 2011). Under certain circumstances, a

third party unjustly enriched by the diversion of assets may be held legally

responsible for restitution. Id. at § 47 ("If a third person makes a payment to

the defendant in respect of an asset belonging to the claimant, the claimant is

entitled to restitution from the defendant as necessary to prevent unjust


      For reasons already discussed, the judge's conclusion that Koger was the

recipient of the wrongfully diverted assets of KDS and KPS is supported by the

record. We therefore reject the argument that Koger could not be held jointly

and severally liable for the judgment.


      Koger contends that the judge erred in awarding pre-judgment interest.

"[T]he award of prejudgment interest on contract and equitable claims is based

on equitable principles." Cty. of Essex v. First Union Nat'l Bank,  186 N.J. 46,

61 (2006) (citing Pressler, Current N.J. Court Rules, cmt. 9 on R. 4:42-11

(2006)). The "primary consideration" in awarding prejudgment interest is that

            the defendant has had the use, and the plaintiff has not,
            of the amount in question; and the interest factor simply
            covers the value of the sum awarded for the
            prejudgment period during which the defendant had the
            benefit of monies to which the plaintiff is found to have
            been earlier entitled.

            [Litton Indus., Inc. v. IMO Indus., Inc.,  200 N.J. 372,
            390 (2009) (quoting Rova Farms Resort, Inc. v. Inv'rs.
            Ins. Co.,  65 N.J. 474, 506 (1974)).]

"The allowance of prejudgment interest is a matter of discretion for the trial

court." Cty. of Essex,  186 N.J. at 61 (citing In re Estate of Lash,  169 N.J. 20,

34 (2001)). "Unless the award 'represents a manifest denial of justice,' an

appellate court should not interfere." Ibid. (quoting Musto v. Vidas,  333 N.J.

Super. 52, 74 (App. Div. 2000)).

      Here, the judge awarded more than $6.4 million in interest on the buyout

of Robert's shares. The judge found it was "just fair that if you're awarded

something based upon a value fixed in time that you haven't had, that you get an

interest factor built into that." 13 The judge's reasoning was consistent with the

Court's reasoning in Rova Farms. Had Ras provided consideration for Robert's

transfer of his 50% interests, Robert would have enjoyed the benefits of the

   The judge specifically clarified that the prejudgment interest award was not
predicated upon  N.J.S.A. 14A:12-7(8)(d), which permits, in a voluntary stock
buyback, that the court may order interest "at the rate and from the date
determined by the court to be equitable[.]"
money for more than a decade. Instead, not only did Robert lack the money

during that time, but also during that same period, Ras and George took actions

that resulted in the devaluation of Robert's interests. We have already addressed

Koger's arguments that any devaluation of KDS and KPS resulted from valid

business judgments, or that it did not benefit from monies diverted from Robert.

As to Koger's claim that the amount of the award renders it inequitable, we

address that derivatively below.


      Koger and Ras challenge the judge's valuation of Robert's interests in KDS

and KPS.     As noted, on remand, with neither party seeking to offer any

additional evidence on the valuation of the two companies other than what was

presented at trial, the judge accepted Klein's opinions and entered judgment.

Consideration of defendants' arguments requires us to recount some of the trial


      Klein testified that he applied the income-based and market-based

methods of valuation, not an asset-based method of valuation, and considered

factors listed in the Internal Revenue Service (IRS), Revenue Ruling 59-60, C.B.

1959-1.14   After weighting and adjustment, Klein concluded that, as of

November 12, 2007, when Robert filed his initial complaint, KDS had fair value

of $1,547,278, and KPS had fair value of $34,973,236, and the fair value of

Robert's ownership was 50% of those amounts. 15

      In his written opinion following the 2008–09 trial, although the judge

never explicitly rejected Klein's opinions, he implicitly did so because he found,

among other things, that neither KDS or KPS "ever had any measurable value

apart from Koger . . . . They were created and operated for the estate planning

and liability-shielding benefits that might accrue, but had no viability or purpose

or value as distinct entities." The judge rejected Robert's claim that his transfer

of 50% interest in the companies was void for lack of consideration, "because

[he found] that neither of those two entities had value at the time Robert

   In Balsamides, the Court recognized this IRS ruling as "the key reference
regarding valuation of closely held companies[.]"  160 N.J. at 374 n.8.
   Defendants do not challenge the court's decision to accept Klein's valuation
date as the commencement of the litigation. Appellate courts review the
determination of a valuation date under the abuse of discretion standard. Torres
v. Schripps, Inc.,  342 N.J. Super. 419, 437 (App. Div. 2001). Nothing suggests
the court abused its discretion. The chosen valuation date is consistent with
 N.J.S.A. 14A:12-7(8)(a), governing voluntary court-ordered purchases of stock,
which provides the court may order the sale of shares valued at "their fair value
as of the date of the commencement of the action or such earlier or later date
deemed equitable by the court[.]"
surrendered his interests[.]"    Of course, the Court rejected that underlying

conclusion. Sipko,  214 N.J. at 380.

      On remand, the judge observed that at trial, defendants failed to "put forth

any approach to value which recognize[d] the existence of KDS or KPS as

corporations distinct from each other, distinct from Koger . . . , and distinct from

non-owner George." He noted that despite the Court's holding and instructions,

defendants maintained on remand that KDS and KPS lacked any value, and

"rebuffed" a "post-remand invitation . . . to consider another expert." The judge

accepted, without further analysis, the "coherent and convincing and unrebutted

evidence of value put [forth] at the trial by [Klein]."

      "The findings of the trial court are critical[,] as the valuation of closely-

held corporations is inherently fact-based." Balsamides,  160 N.J. at 368 (citing

Rev. Rul. 59-60). Valuation in such cases "is not an exact science," and "[t]here

is no right answer." Ibid. Our deferential standard of review that applies to

factual findings by a judge in a non-jury trial "is particularly significant in

valuation disputes, which frequently become battles between experts." Ibid.

(citation omitted). However, "we need not give deference to the trial judge's

determinations of what discounts or premiums the determination of fair value

may include, or must exclude, since they are questions of law."           Casey v.

Brennan,  344 N.J. Super. 83, 110 (App. Div. 2001), aff'd,  173 N.J. 177 (2002)

(citing Balsamides,  160 N.J. at 372–73); see also Denike v. Cupo,  394 N.J.

Super. 357, 382 (App. Div. 2007) (recognizing de novo standard of review

regarding "what standards of value are permissible to consider" in valuing an

LLC (citing Casey,  344 N.J. Super. at 113), rev'd on other grounds,  196 N.J. 502


      When valuing a closely held corporation, "[t]he goal is to arrive at a fair

market value for a stock for which there is no market." Bowen v. Bowen,  96 N.J. 36, 44 (1984).16 Although "[n]o general formula may be given that is

applicable to the many different valuation situations[,]" the IRS recommends

that "all available financial data, as well as all relevant factors affecting the fair

market value, should be considered." Ibid. (first alteration in original) (quoting

Rev. Rul. 59-60). Those factors include "the history of the firm, the nature of

the company, the outlook for the industry, the book value of the stock, the size

of the block to be valued, the earnings and dividend-paying capacities of the

company, and the existence of goodwill or other intangible assets."              Ibid.

Additionally, "[t]he very nature of the term 'fair value' suggests that courts must

   Although as the Court explained in Balsamides, the term "fair value" that
applies to a court-ordered voluntary buyout pursuant to  N.J.S.A. 14A:12-
7(8)(c), "is not synonymous with fair market value."  160 N.J. at 374.
take fairness and equity into account . . . ." Lawson Mardon Wheaton, Inc. v.

Smith,  160 N.J. 383, 400 (1999).

      Although expert testimony as to valuation is appropriate, the judge has

discretion to reject the expert's opinion, even if it is the only expert evidence

offered at trial. See Torres,  342 N.J. Super. at 431 (holding that trial judge has

discretion to reject expert valuation of corporate stock, even when it is only

expert evidence presented at trial). Accordingly, even properly admitted expert

valuation testimony is subject to the factfinder's analysis based on the methods

and assumptions used by the expert. See Bowen,  96 N.J. at 49–50 (in divorce

case, holding that accountant expert's valuation of stock in closely held

corporation was admissible but entitled to minimal weight, because expert

offered no basis in generally-accepted accounting principles).

      Defendants argue the judge erred by failing to provide any analysis

regarding the methods Klein employed in valuing the two companies, including

the criticisms of Klein's method noted by defendants' expert at trial, and the

overall fairness of Klein's valuation. Robert counters by arguing that the judge

provided defendants with an opportunity to present competing valuations, but

they chose not to do so. We conclude, however, that by simply accepting Klein's

opinions, which he implicitly rejected at trial, without any considered

explanation for their acceptance on remand, the judge failed to reach "a

reasoned, just and factually supported conclusion[,]" by "weigh[ing] and

evaluat[ing] the experts' opinions, including their credibility[.]" Pansini Custom

Design Assocs., LLC v. City of Ocean City,  407 N.J. Super. 137, 144 (App. Div.


      The lack of any analysis is especially problematic in light of the testimony

of Martin A. Schmidt, the defense expert at trial. Schmidt asserted that Klein

failed to account for the impact that Koger's support, infrastructure, and

goodwill had on the value he attached to Koger, KDS and KPS. In his testimony,

Klein admitted a lack of knowledge regarding the licensing agreements in place

between Koger and the two companies. In his decision following trial, the judge

obviously credited the import of Schmidt's testimony to some degree, because

he concluded that KDS and KPS lacked any independent value and were totally

dependent on Koger.

      Although he valued all the Koger entities as one, Schmidt justified

application of a marketability discount to their value. 17 In Balsamides, the Court

   At trial, plaintiff's counsel objected to Schmidt's explanation, arguing that
under Balsamides, a marketability discount was inapplicable to the buyout
ordered in an oppressed shareholder action. Ironically, following remand, with
definitive rulings from this court and the Supreme Court that there was no

held that trial courts must decide whether to apply a marketability discount to

determine the value of shares in a closely-held corporation and "must take into

account what is fair and equitable."  160 N.J. at 377. As the Court explained,

"A minority discount adjusts for lack of control over the business entity, while

a marketability discount adjusts for a lack of liquidity in one's interest in an

entity." Id. at 373. The Court recognized that while "marketability discounts

generally should not be applied in determining the 'fair value' of a dissenting

shareholder's stock in an appraisal action[,] . . . there may be situations where

equity compels another result." Id. at 376 (citing Lawson Mardon Wheaton,  160 N.J. at 402).

      Citing  N.J.S.A. 14A:12-7(1)(c), the Court also said, "[I]n deciding

whether to apply a marketability discount to determine the 'fair value' of shares

of a shareholder forced to sell his stock in a judicially ordered buy-out[, courts]

must take into account what is fair and equitable." Id. at 377. The Court


             It is important to note the distinction between applying
             a discount at the corporate level to one or more of the
             values initially determined in valuing the entire
             corporation, as opposed to applying a discount at the
             shareholder level after the corporation has been valued.

shareholder oppression, that objection, if it had merit at the time, lacks merit
            Discounting at the corporate level may be entirely
            appropriate if it is generally accepted in the financial
            community in valuing businesses.

            [Id. at 373–74 (quoting 1 John MacKay II, New Jersey
            Business Corporations, § 9-10(c)(2), n. 426 (citations

On remand, the court failed to address the issue at all.

      To be clear, while the judge should have considered Schmidt's criticisms

of Klein's methods on remand, he did not err by disregarding Schmidt's proposed

valuation, because Schmidt admitted that he did not treat KDS and KPS as

independent, valuable corporate entities. That opinion clearly conflicts with the

Court's holding that KDS and KPS had independent value. We also reject

defendants' argument that Klein's valuation was based heavily on an asset

identified by Robert — Enterprise Software — even though the judge

determined after trial that it did not exist.     Klein clearly testified that his

valuation relied on revenue streams derived from whatever assets the companies

had. Defendants' claim that Klein's valuation "heavily" relied upon a non -

existent asset is specious.

      We also reject Koger's attempt to present, for the first time in its appellate

brief, an alternative method of valuation based upon the profits and losses of

KDS and KPS from 2005 onward. Nothing in the record demonstrates Koger

urged this valuation method at trial. We refuse to address the argument for the

first time on appeal. See Nieder v. Royal Indem. Ins. Co.,  62 N.J. 229, 234

(1973) (noting general rule that appellate courts will not address an argument

presented for the first time on appeal (citing Reynolds Offset Co. v. Summer,  58 N.J. Super. 542, 548 (App. Div. 1959))).

      Accordingly, and reluctantly, we remand the matter to the trial court for

reconsideration of the valuation of KDS and KPS, and, in turn, the value of

Robert's 50% interest in each corporation as of the valuation date. The court's

conclusions following remand will also impact the amount of pre-judgment

interest included in the judgment, and, while we affirm an award of pre-

judgment interest, any award is subject to the discretionary guidance provided

above. The court should consider all sources of information that affect the

fairness and equity of Klein's suggested buyout price, including Schmidt's

criticisms, the idiosyncratic relationship between Koger, KDS, and KPS, and its

effect on valuation under all the circumstances of the case.

      We acknowledge the court's ability to marshal additional proofs, if

necessary, to determine a fair and equitable buyout amount. See Bowen,  96 N.J.

at 43 (trial courts may marshal additional proofs to resolve valuation disputes);

Torres,  342 N.J. Super. at 436 (when determining fair value of corporation's

shares, if parties fail to present sufficient expert testimony, trial judge must seek

assistance from other sources). However, we wish to make clear that we are not

ordering a new evidentiary hearing, additional experts' reports or further

discovery on the issue. We leave the conduct of the remand to the sound

discretion of the judge. 18

      In sum, in A-0495-16, we affirm in all respects, except as to the amount

of the judgment, including the amount of pre-judgment interest. We remand to

the trial court for further proceedings consistent with this opinion.

                                  As to 3129-16

      Ras argues that the judge abused his discretion by lifting the stay on

execution and summarily ordering the forfeiture of the alternative security in his

February 13, 2017 order, as subsequently modified by the court's corrective

February 28, 2017 order. He claims it was error for the judge to rely o n the

look-back accounting as justification. Ras also argues the judge wrongfully

imposed a constructive trust on his income and assets. We start with some

general principles.

   We recognize that the trial judge, who was also the remand judge, has since
retired. However, we have full confidence that based on the trial testimony and
the exhibits included in the appendices on appeal, and the exercise of his or her
discretion to seek further information if necessary, the judge on remand will be
able to complete this exquisitely difficult task.
      "A trial court . . . is empowered to condition a stay of a judgment pending

appeal by requiring an appellant to post a supersedeas bond in order to protect

the respondent from the loss of the use of funds otherwise immediately due."

Grow Co. v. Chokshi,  403 N.J. Super. 443, 477 (App. Div. 2008); see also R.

2:9-5(a) (providing that a stay of a judgment "in a civil action adjudicating

liability for a sum of money . . . shall be stayed only upon the posting of a

supersedeas bond or other form of security . . . unless the court otherwise orders

after notice and on good cause shown").

      The court must determine whether "good cause" exists to permit the

posting of alternative security, and the burden is on the party seeking a stay

supported by alternative security, "to show that the posting of a supersedeas

bond in the full judgment amount would cause undue economic hardship and

that in the circumstances such lesser amount or other form of security is

adequate and just." R. 2:9-6(a)(2).

            In the event the court approves a form of security other
            than a supersedeas bond . . . , the court shall impose
            additional conditions on the judgment debtor to prevent
            the dissipation, the diminution in the aggregate value,
            or the diversion of the judgment debtor's assets during
            the appeal.


      The judge permitted the posting of alternative security, in part, because

Ras and George claimed a lack of liquidity and inability to pay for the

supersedeas bond. On the day after the judge's final decision on remand, defense

counsel represented that any supersedeas bond required one-hundred percent

collateralization. It was the same day that Ras and George began wiring money

to Slovakia.19 In his written decision supporting the February 13, 2017 forfeiture

order, the judge explained the significance of the timing:

                   The [d]efendants steadfastly concealed these
             transactions from late July and early August, 2016, up
             through January 14, 2017, in response to a court-
             mandated disclosure designed to ascertain, among other
             things, whether assets available for bonding were being

             The stark reality is that [d]efendants had cash . . . to
             fully bond the [j]udgment, knew that 100% collateral
             would be required for bonding companies, and elected
             instead to transfer the monies available to secure a stay
             to relatives overseas. And they chose to conceal it
             throughout the long, protracted efforts to get alternative
             security in place, based upon the supposed lack of any

He concluded that defendants' actions, "while . . . convincing the court to compel

[p]laintiff to accept woefully inadequate alternatives, . . . warrants the lifting of

   The judge made clear, as do we, that defense counsel had no knowledge of
these events at that time.
the stay and the execution on the sole asset posted, and the real estate long ago

ordered to be posted."

      As we understand Ras's argument, the judge's earlier September 30, and

December 13, 2016 orders anticipated forfeiture of posted assets only if it was

determined     after   notice   and   hearing   that   there   were    "material

misrepresentation[s]" in the ordered accounting of assets or the look back

accounting. He claims that the judge held no hearing and "impose[d] punitive

and draconian sanctions" on grounds other than material misrepresentations. He

also argues that the judge lacked jurisdiction to order forfeiture of his

Connecticut property, which was owned by a foreign limited liability company

in which Ras was the sole member, and because Ras only agreed to obtain a

mortgage on the property and offer its proceeds as security. We reject these


      Initially, it is clear that had the judge known that George and Ras

transferred an amount roughly equivalent to the judgment in the days following

the final remand decision, he would have never approved, even provisionally,

the alternative security arrangement. It was defendants' burden to demonstrate

good cause to support the posting of alternative security pending appeal, but

they repeatedly engaged in actions that tested the court's indulgence and

prolonged meaningful review of their financial circumstances. The court acted

well within its discretion by ending the alternative security arrangement and

ordering the forfeiture of defendants' posted security.

      The judge had the authority to order further financial disclosures " to

prevent the dissipation, the diminution in the aggregate value, or the diversion

of the judgment debtor's assets during the appeal." R. 2:9-6(a)(2). While the

financial disclosures and look-back accounting may have been accurate, the

overseas transfers effectively undermined any "good cause" that supported

posting the alternative security in the first place, regardless of the alleged

reasons for the transfers.    There were no disputed facts for the judge to

adjudicate at a hearing. More importantly, neither the September 30 nor the

December 13, 2016 order limited the court's inherent, equitable authority to

ensure the alternative security was adequate, and to forfeit the security when a

failure to do so otherwise threatened the court's ability to enforce the judgment.

      As for the Connecticut property, the February 28, 2017 corrective order

added it to the New Jersey properties already forfeited in the earlier order. In

support of defendants' motion on short notice to post alternative security, Ras

filed a certification. He certified that he was "ready and willing to pledge real

property" he owned — the Connecticut property — valued at $6.75 million. The

                                        50 September 2016 order that originally approved the posting of alternative

security required Ras to post "[t]he deed" to the Connecticut property. Ras

raised no objection on the grounds that the court lacked jurisdiction to i mpose

such a condition because the property was in Connecticut.

      The possibility of a mortgage, and the posting of its proceeds in lieu of a

deed, arose later. In a December 2016 letter to the judge, the SFA outlined the

jurisdictional issues and other difficulties and recommended that Ras obtain a

mortgage and post the proceeds as security. At proceedings that led to the

February 2017 orders, it was represented that Ras applied to refinance the

Connecticut property. Ras again never argued that the court lacked jurisdiction

over the asset. In fact, Ras never obtained a mortgage on the Connecticut


      We also reject the argument that the judge abused his discretion by

imposing a constructive trust on Ras's income and assets. "A constructive trust

is a remedial device through which the 'conscience of equity' is expressed; it

   Robert's brief asserts that the property became embroiled in Ras's subsequent
divorce proceedings and remained so as of the filing of Robert's brief. He asserts
that the property remains "out of the reach of execution." We express no opinion
about how Robert might execute on the property if it became available and what
procedure he would need to employ. We only reject the notion that the judge
could not order forfeiture of the property.
will be imposed when a person has acquired possession of or title to property

under circumstances which, in good conscience, will not allow the property's

retention." Thompson v. City of Atl. City,  386 N.J. Super. 359, 375–76 (App.

Div. 2006) (quoting Flanigan v. Munson,  175 N.J. 597, 608 (2003)). The

following two-prong test applies to determinations of whether a constructive

trust is warranted: "a court must find that a 'wrongful act' caused the property

to come into the hands of the recipient and that the recipient will be 'unjustly

enriched' if it is not returned." Id. at 376 (quoting Flanigan,  175 N.J. at 608).

The "wrongful act" necessary for imposition of a constructive trust need not be

criminal; it includes, but it is not limited to, "fraud, mistake, undue influence,

or breach of a confidential relationship, which has resulted in a transfer of

property." D'Ippolito v. Castoro,  51 N.J. 584, 589 (1968). The circumstances

in which a constructive trust may be imposed are as extensive as required to

reach an equitable result. Thompson,  386 N.J. Super. at 376.

      Here, the judge explained that his imposition of a constructive trust was

based upon Ras's failure to disclose the transfer of assets overseas. He focused

upon defendants' concealment of the transfers from the court, while at the same

time claiming they lacked sufficient liquidity to post a bond. That concealment

was certainly a wrongful act, as was Ras's failure to disclose in the first place

the existence of the Slovakian properties, the encumbrance of which was the

alleged reason for the transfers. The transfers permitted Ras to enrich himself

at the expense of his brother and delayed any possible execution on the extant


      We reject Ras's argument that imposition of a constructive trust conflicts

with statutory limits on post-judgment execution of wages and certain personal

property.  N.J.S.A. 2A:17-56(a);  N.J.S.A. 2A:17-19. The court's creation of an

equitable constructive trust is separate from the execution process.         The

arguments warrant no further discussion. R. 2:11-3(e)(1)(E).

      As to A-0495-16, we affirm in part, reverse in part, and remand for further

proceedings consistent with this opinion. As to A-3129-16, we affirm, subject

of course to the court's ability to vacate or amend the orders under review

following the remand proceedings. We do not retain jurisdiction.


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