Judge Richard J. Sullivan
Donahue Schriber Realty Group (DSRG), as of December 2008 real estate investment trust, owned 86 properties, primarily shopping centers. After buying shares in 2002, Strategic DSRG LLC was one of DSRG’s largest investors, holding 38 percent of DSRG’s stock. Plaintiff Dutch pension fund (PMT)—an investor since 1999—owned 14 percent of DSRG’s shares. It exercised a “put” option to sell its shares to Strategic at a price equal to 95 percent of DSRG’s net asset value (NAV). At issue in PMT’s action seeking $18.5 million it claimed to be owed was whether the methodology used by DSRG’s directors in setting DSRG’s NAV as of Sept. 30, 2008—about $123 million, a price equivalent to 95 percent of NAV, set at $36.60 per share of DSRG’s Class G common stock—reflected DSRG’s actual value, as required by the “unscientific” put agreement, which did not require a full appraisal upon the option’s exercise. Finding it did, the court deemed PMT entitled to $18.5 million plus interest. The board’s decision not to adjust for changes in capitalization rates and net operating income, coupled with a stipulation that it acted in good faith and in conformity with fiduciary duties, supported a conclusion that the NAV adequately reflected DSRG’s value.