Athlon Sports Communications, Inc. v. Stephen C. Duggan, et al.

This appeal arises from a dispute over the fair value of stock in a dissenting shareholders case. Athlon Sports Communications, Inc. (“Athlon”) completed a merger (“the Merger”) which converted the minority dissenting shareholders’ (“Defendants”) shares into cash consideration and terminated their rights as shareholders. Athlon offered cash consideration for the shares at $0.10 per share. Defendants contend that their shares are worth at least $6.48 per share. Athlon sued Defendants to determine judicially the fair value of these shares. This case was tried before the Chancery Court for Davidson County (“the Trial Court”). After a trial, the Trial Court, applying the Delaware Block Method for determination of share value, found that the share value was $0.10 per share as of the date of the Merger. Defendants appeal to this Court, arguing that (1) the Delaware Block Method is ill-suited for a business like Athlon attempting a new venture, and is antiquated, generally; and, (2) that the Trial Court erred in its application of the Delaware Block Method. We find and hold that, under Tennessee law, the Trial Court properly utilized the Delaware Block Method. We find and hold further that the Trial Court considered the competing expert testimony, accredited Athlon’s expert, and the evidence does not preponderate against the Trial Court’s factual findings. We affirm the judgment of the Trial Court.