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Valuation Averaging: A New Procedure for Resolving Valuation Disputes

Keith Sharfman, Rutgers University

Article comments

88 Minnesota Law Review 357 (2003)

Abstract

In this Article, Professor Sharfman addresses the problem of "discretionary valuation": that courts resolve valuation disputes arbitrarily and unpredictably, thus harming litigants and society. As a solution, he proposes the enactment of "valuation averaging," a new procedure for resolving valuation disputes modeled on the algorithmic valuation processes often agreed to by sophisticated private firms in advance of any dispute. He argues that by replacing the discretion of judges and juries with a mechanical valuation process, valuation averaging would cause litigants to introduce more plausible and conciliatory valuations into evidence and thereby reduce the cost of valuation litigation and increase the chance of settlement. He further argues that imposition of the valuation averaging procedure would not deprive litigants of their constitutional entitlements to due process and the right to trial by jury. Finally, he argues that valuation averaging would improve upon current law and is superior to other proposed alternatives.

Subject Area

Administrative Law, Banking and Finance, Bankruptcy Law, Commercial Law, Constitutional Law, Contracts, Corporations, Courts, Dispute Resolution, Economics, Evidence, General Law, Judges, Law and Economics, Partnerships, Practice and Procedure, Remedies

Recommended Citation

Keith Sharfman, "Valuation Averaging: A New Procedure for Resolving Valuation Disputes" (December 2003). Rutgers University (Newark) Legal Working Paper Series. Rutgers Law School (Newark) Faculty Papers. Working Paper 6.
http://law.bepress.com/rutgersnewarklwps/fp/art6

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