The Court ruled, on summary judgment, that the word "value" in a Trust Agreement meant "’fair market value’ of the shares of the railroad company which was the subject of the case as value would be viewed by the Trust, as prospective seller, and the Blue family [those entitled to buy them per the Trust Agreement], as prospective purchasers." The term "value" did not mean the fair market value of the shares if they had been offered to the general public.
The Court rejected, at least at the summary judgment stage, the value for the shares established in a report prepared by the railroad’s accounting firm. The Court noted that this report had been prepared "for the limited purpose of determining the fair market value between a willing buyer and a willing seller in the general marketplace of a minority interest of a share of the Railroad’s common stock for gift and estate tax purposes." The Court found that there were material issues of fact whether this valuation, which incorporated a significant discount for the lack of marketability of the shares, reflected the intent of the settlor of the trust.
The Court rejected an argument by the Plaintiffs that they were entitled to challenge the methodology of the accounting firm. It held "the court notes that since [the testator] is deemed to have embraced the expertise of [the accounting firm] by virtue of paragraph 8.01 of the Trust Agreement, it is likely that criticism of [the accounting firm’s] valuation methodology would be of limited probative value, if it would be admissible at all."
The Court also allowed an amendment to the Complaint even though the proposed new allegations were "substantively different" from those in the original Complaint. It held that the duty of construing the relevant provisions of the Trust Agreement was its domain, and stated "variations existing between the Petition and the Amended Petition regarding the Trustee’s contended construction of the Trust Agreement are not of material consequence in this setting."