How have arbitrators dealt with a dispute between two 50% shareholders of a corporation pursuant to a buy-sell agreement?

¹⁴ The dispute in Hightower was between two 50 percent shareholders of a corporation, each of whom had the right to offer to sell his shares to the other at a specified price pursuant to a buy-sell agreement. If one of the shareholders exercised the right, then the other shareholder could either buy the shares or sell his shares to the other at the same price. (Hightower v. Superior Court,supra, 86 Cal.App.4th at p. 1421, 104 Cal.Rptr.2d 209.) One of the shareholders eventually exercised this right, and the other shareholder filed a demand for arbitration, claiming that the offering shareholder interfered with his ability to obtain financing to purchase the shares. (Id. at pp. 1422-1423, 104 Cal.Rptr.2d 209.) The arbitrator ruled in favor of the offering shareholder. The problem was the remedy. The offering shareholder had the financing to purchase the other shareholder's shares at the time he made the offer three years earlier, but it was uncertain whether he could obtain it again at the time of the award. So the arbitrator gave the offering shareholder the right, but not the obligation, to exercise his option, subject to 10 specified conditions. (Id. at p. 1426, 104 Cal.Rptr.2d 209 & fn. 15.) The arbitrator reserved jurisdiction to determine those potential and conditional issues that were likely to arise in connection with the exercise of the option and the various conditions. (Id. at p. 1439, 104 Cal.Rptr.2d 209.)

¹⁴ The dispute in Hightower was between two 50 percent shareholders of a corporation, each of whom had the right to offer to sell his shares to the other at a specified price pursuant to a buy-sell agreement. If one of the shareholders exercised the right, then the other shareholder could either buy the shares or sell his shares to the other at the same price. (Hightower v. Superior Court,supra, 86 Cal.App.4th at p. 1421, 104 Cal.Rptr.2d 209.) One of the shareholders eventually exercised this right, and the other shareholder filed a demand for arbitration, claiming that the offering shareholder interfered with his ability to obtain financing to purchase the shares. (Id. at pp. 1422-1423, 104 Cal.Rptr.2d 209.) The arbitrator ruled in favor of the offering shareholder. The problem was the remedy. The offering shareholder had the financing to purchase the other shareholder's shares at the time he made the offer three years earlier, but it was uncertain whether he could obtain it again at the time of the award. So the arbitrator gave the offering shareholder the right, but not the obligation, to exercise his option, subject to 10 specified conditions. (Id. at p. 1426, 104 Cal.Rptr.2d 209 & fn. 15.) The arbitrator reserved jurisdiction to determine those potential and conditional issues that were likely to arise in connection with the exercise of the option and the various conditions. (Id. at p. 1439, 104 Cal.Rptr.2d 209.)