Mart

I. Introduction

Bradley C. Mart (Mart) and Leland Severson (Severson) are the sole shareholders of Bay World Trading Ltd. (Bay World). Mart appeals from a decree which provides that Bay World will be dissolved unless Bay World and/or Severson elects to buy out Mart’s shares in the corporation. Mart argues that the superior court’s determination of the “fair value” of his Bay World shares was erroneous as a matter of law. We agree and, therefore, reverse the trial court’s order.

II. Corporations Code Section 2000

This appeal is from a special proceeding conducted pursuant to section 2000 of the Corporations Code and is expressly authorized by that statute. (§ 2000, subd. (c).) Therefore, we begin by reviewing the statutory procedure.

The present case involves a voluntary dissolution proceeding. Shareholders of a corporation who represent 50 percent or more of the voting power may elect to wind up and dissolve that corporation by initiating a voluntary dissolution proceeding. (§§ 1900-1903.) The special proceeding established by section 2000 “enable[s] a 50 percent shareholder to avoid dissolution of the corporation by purchasing the stock of the shareholder(s) seeking…