Denkins v. Zinkan Enterprises
Ohio Court of Appeals
1997 Ohio App. LEXIS 4742 (Oct. 29, 1997)
Denkins's (plaintiff) stock-purchase agreement with Zinkan (defendant) let him sell shares back for the greater of $1,500 or 2.5 times book value, calculated by dividing the company's after-tax equity "as shown on [the] yearly financial statement" by outstanding shares; when Denkins exercised the option, he calculated the higher damages figure using equity listed on a balance sheet Zinkan had given to a bank for unrelated purposes, but the trial court found he failed to prove that figure was the correct equity amount and instead awarded the $1,500-per-share alternative.
Whether, under an option contract, book value for a corporation's stock may be determined using an equity figure listed in a balance sheet provided to a bank for purposes unrelated to the contract.