This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The case involves dissenting shareholders of New Mexico Banquest Investors Corporation (NMBIC) seeking the fair value of their shares after a corporate action involving the redemption of shares held by a major shareholder, Banco Bilbao de Vizcaya (BBV). The dissenting shareholders, collectively referred to as the Peters Group, alleged breaches of fiduciary duty and sought additional remedies, including punitive damages and a control premium on their shares (paras 1-10).
Procedural History
- District Court of Santa Fe County: The court determined the fair value of the dissenting shareholders' shares at $99.52 per share, without a minority discount or control premium, and awarded 10% interest compounded annually. It also found a breach of fiduciary duty by the controlling shareholder but denied punitive damages and other claims (paras 10, 27).
Parties' Submissions
- Appellants (Peters Group): Argued that the district court erred in refusing to add a control premium to the fair value of their shares, denying punitive damages for breach of fiduciary duty, and granting summary judgment on their breach of contract claim under the BBV Agreement (paras 11, 23, 36).
- Respondents (NMBIC and Bennett): Contended that the district court correctly determined the fair value of the shares without a control premium, denied punitive damages, and granted summary judgment on the BBV Agreement. They also argued that the court erred in awarding compound interest (paras 11, 23, 42).
Legal Issues
- Whether a control premium should be added to the fair value of the dissenting shareholders' shares (para 11).
- Whether punitive damages should be awarded for the breach of fiduciary duty (para 23).
- Whether the district court erred in granting summary judgment on the BBV Agreement (para 36).
- Whether the district court had the authority to award compound interest under the appraisal statute (para 42).
Disposition
- The Court of Appeals affirmed the district court's decision on all issues (para 47).
Reasons
Per Alarid J. (Bustamante and Vigil JJ. concurring):
Control Premium: The court held that the district court's decision not to add a control premium was supported by substantial evidence. The Peters Group failed to prove that a control premium was warranted, as the sale did not involve a controlling interest, and the fair value was determined without a minority discount (paras 11-22).
Punitive Damages: The court found that while a breach of fiduciary duty occurred, the Peters Group failed to demonstrate harm or damages resulting from the breach. The statutory appraisal remedy was deemed exclusive, and the conduct did not rise to the level of fraud or illegality to justify punitive damages (paras 23-35).
BBV Agreement: The court agreed with the district court's interpretation that the BBV Agreement was unambiguous in requiring all shareholders to act collectively to purchase BBV's shares. Summary judgment on this issue was upheld (paras 36-41).
Compound Interest: The court held that the appraisal statute allowed the district court to award compound interest as part of a fair and equitable remedy. The 10% annual compounded interest awarded by the district court was affirmed (paras 42-46).