In Fukilman v. 31st Avenue Realty Corp. , a bunch of defendants agreed to purchase 20% of a plaintiff's interests in a corporation known as 31st Avenue Realty Corporation (which owned a medical office building).
While the defendants contracted to acquire that percentage interest at "full market value," a dispute arose as to whether the calculation was to be premised on the property's "highest and best use," or its "currently improved condition." The difference was substantial, with the former totaling $3.6 million, and latter at $2.7 million.
The Nassau County Supreme Court concluded that the $3.6 million calculation applied, as did the Appellate Division, Second Department.
While some might think that "full market value" would encompass a property's "existing use," Fukilman v. 31st Avenue Realty Corp. demonstrates that the phrase is afforded a broader interpretation -- one that could have significant financial implications.
Caveat drafters!
For a copy of the Appellate Division's decision, please use this link: Fukilman v. 31st Avenue Realty Corp.