Appeal from the Order in the Court of Common Pleas of Butler County, Civil Division, No. 83-047 Book 43 Page 169
Paul A. Manion, Pittsburgh, for appellant.
Cirillo, President Judge, and Montemuro and Tamilia, JJ.
[ 369 Pa. Super. Page 135]
Appellant Spang Industries, Inc., (Industries), appeals from an Order of the Court of Common Pleas of Butler County which awarded dissenting shareholders a sum of $32.75 per share owned by each dissenter, as well as expert witness fees in the amount of $154,964.25 to Edgar V. Weir.*fn1
[ 369 Pa. Super. Page 136]
The appeal before us stems from an action below, pursuant to 15 Pa.S.A. § 1515, filed by Industries to determine the fair value of its stock on January 31, 1983. The following statements are contained in the trial court's findings of fact:
Industries is the successor in interest to Magnetics, Inc., which was founded in 1949 to manufacture and sell magnetic electronic components. On January 31, 1983, Industries was merged into Jethro Acquisition Inc., a wholly owned subsidiary of Spang & Co., pursuant to an Agreement and Plan of Merger dated November 16, 1982. Jethro Acquisition Inc. subsequently was merged with and into Spang & Co. The Plan of Merger was submitted to a vote of the shareholders of Industries at a special meeting properly called, noticed and held on January 31, 1983. The Plan of Merger was approved by 2,136,791 shares which constituted 89% of Industries' outstanding shares and 96.4% of the 2,217,435 shares of Industries' outstanding stock voted at the special meeting.
Approximately 90% of the minority shareholders present at the special meeting (i.e., 718 out of 811) voted in favor of the merger. The shares and shareholders eligible to vote at the January 31, 1983 special meeting and the results of the vote are accurately summarized on Industries' Trial Exhibit 34.
Of the minority shares represented at the meeting 34.1% voted against and 65.9% voted in favor of the merger. (P's. Ex. 34)
At the effective time of the merger, each issued and outstanding share of common stock par value $1.00 per share, of Industries, other than shares held by Spang & Company, became converted into the right to receive $20.00 in cash, without interest.
[ 369 Pa. Super. Page 137]
Within thirty days after the Plan of Merger became effective, Industries, in compliance with Section 515 of the Pennsylvania Business Corporation Law, gave written notice to each of the respondents that the merger had become effective on January 31, 1983, and reiterated its offer to pay $20.00 per share for their shares of Industries' stock. Each of these written notices was accompanied by a balance sheet of Industries at October 31, 1982, and a statement of income of Industries for the twelve months ended October 31, 1982.
(Slip. Op., Kiester, J., 11/19/85, pp. 7-10.)
The appellees did not accept the offer; instead, they filed a written objection to the plan of merger prior to January 31, 1983, and a written demand for payment of fair value after January 31, 1983. On November 19, 1986, the trial court issued an adjudication and decision, including findings of fact and conclusions of law. The fair value of Industries' stock was determined to have been $34.50 on January 31, 1983, and interest and expert witness fees were awarded to the dissenting shareholders. Industries filed post-trial motions, and the court issued an amended decision, adjusting the figure for investment value by removing the value it had purported to have taken from expert witness Reed's testimony.
In the amended decision, the trial court determined the fair value of the shares of Industries on January 31, 1983 was $32.76 per share; this fair value materially exceeded the $20 tender ...