Alberta judge refuses to move buyout valuation date despite math error
That is where the numbers get large. For Dynasty Power, an energy trading business, the court noted shareholders’ equity of about $17 million at the end of 2017 had grown to about $376 million by the end of 2024, with an additional $158 million paid out to shareholders over that span. Because the firm funds its trading with retained capital, the later the valuation date, the larger the payout to the departing side.
The court had earlier set December 31, 2021, as the valuation date for Dynasty Power. The plaintiffs asked to move it to December 31, 2022, pointing to an arithmetic slip: the judge had described a litigation delay as “about seven and a half years” when the two dates were closer to six and a half years apart.
The court rejected the request in the July 13 decision. The judge wrote that the date was a discretionary call weighing many factors, not a math calculation, and that the misstatement had no effect on the outcome. He noted the true midpoint between the two dates fell in April 2022, closer to the date he had chosen than to the one the plaintiffs wanted.
The court did change one thing that matters to valuation professionals. It had previously limited the parties’ experts to estimate valuation reports, a mid-level standard set by the Canadian Institute of Chartered Business Valuators. On reflection, citing the complexity and value of the businesses, the court lifted that cap and now allows reports up to the most rigorous comprehensive standard.
Other issues, including claims for punitive damages, disgorgement, interest and the tax treatment of the buyout, were left for a final hearing. The parties have appealed and cross-appealed an earlier ruling in the case.
