Real Estate Owner – Win in Significant Valuation Dispute
Represented a real estate owner in a bet-the-company dispute regarding the valuation of its capital contribution in a real estate venture. Herrick’s client owns property in North Carolina and contracted with a national developer to convey the site to joint venture entities for its phased development for residential, retail, hotel, and office use. A dispute arose concerning the proposed appraisal instructions governing the valuation designed to establish our client’s capital contribution. Namely, if the intended use of the property for affordable housing should be considered in ascertaining its fair market value. Following substantially varied party appraisals, the development agreement required baseball arbitration, including the appointment of an arbitrator to decide a dispute concerning the qualifications of a neutral appraiser and the selection of a neutral appraiser to determine the valuation of our client’s capital contribution. After submissions, discussions with party appraisers, and rounds of argument from counsel, the arbitrator sided with our client’s position on the qualifications of a neutral appraiser and the neutral appraiser selected our client’s appraisal—a valuation of more than fourteen million dollars more than the developer’s appraisal.