On October 7, 2025, the First Department issued a decision in Rosenblum v. Treitler, 2025 NY Slip Op. 05481, holding that a discount for lack of marketability as properly applied in valuing minority ownership of a business, explaining:
Contrary to plaintiff’s contentions, the trial court correctly applied a discount for lack of marketability (DLOM) to the value of his membership interests in the LLCs. The determination of fair value rests on fixing fair value, courts should determine the minority shareholder’s proportionate interest in the value of the corporation as a whole, that is, what a willing purchaser, in an arm’s length transaction, would offer for the corporation as an operating business. The next step is to calculate the DLOM. It is not an exact science, and it is the particular facts and circumstances of each case that will dictate the result.
Based on the record before the trial court, its choice to credit defendants’ business valuation expert over plaintiff’s can be reached under a fair interpretation of the evidence. Namely, defendants’ expert’s conclusion relied on the protracted litigation between the parties, the lack of an operating agreement setting forth a process for withdrawal and the amount of time and money spent on an unwillingness to compromise, all of which highlights the difficulties a third-party investor would risk in purchasing the LLCs and supports the DLOM applied. Conversely, plaintiff failed to submit any evidence supporting the value of a DLOM, maintaining instead that no discount should apply.
(Internal quotations and citations omitted).