Webb Ranch, Inc. v. Gary Webb as Trustee of the Webb 2008 Family Trust, et al.

June 2, 2026 Law and Motion Calendar PAGE 30 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ This buy-out procedure has been described as follows:

In response to a corporate shareholder filing for involuntary dissolution, section 2000 prescribes the procedure for a shareholder defendant, or the corporation, to avoid dissolution by purchasing the shares of the party who initiated dissolution. (Schrage v. Schrage (2021) 69 Cal.App.5th 126, 136 [284 Cal.Rptr.3d 279] [“the ‘statutory buyout provisions of the Corporations Code provide a defendant in an involuntary dissolution action with a mechanism for avoiding dissolution by purchasing the plaintiff's shares or other interests’ ”]; Trahan v.

Trahan (2002) 99 Cal.App.4th 62, 75 [120 Cal.Rptr.2d 814] (Trahan) [“[t]he objective of section 2000 is to provide an alternative to dissolution through a buy-out by the holders of 50 percent or more ... of the corporation”].) Once the non-initiating shareholders invoke this statutory procedure, the ensuing “special proceeding under section 2000 ... ‘supplants’ a cause of action for involuntary dissolution.” (Ontiveros v. Constable (2018) 27 Cal.App.5th 259, 264 [237 Cal.Rptr.3d 892].) “In such a [section 2000] proceeding, purchasing parties aspire to buy out the moving party, with minimal expenditure of time and money that would otherwise be spent in litigation, in order to preserve the corporation.

If they (or the corporation) cannot pay the purchase price, or decide not to do so, then both sides must walk away, receiving pro rata the proceeds resulting from dissolution of the corporation. On the other hand, if the purchasing parties tender the amount determined by the court, the moving party cannot reject the share price as being too low.” (Go v. Pacific Health Services, Inc. (2009) 179 Cal.App.4th 522, 531 [101 Cal.Rptr.3d 736].) Put differently, “[i]f the purchasing parties believe the price fixed by the court is too high, they can refuse to purchase the shares at that price and permit the winding up and dissolution of the corporation to proceed.

Their only liability would be to pay the expenses (including attorney fees) incurred by the moving parties in the appraisal process. [Citations.] No comparable provision allows moving parties to refuse to accept a share price they believe to be too low.” (Trahan, at p. 75, 120 Cal.Rptr.2d 814..) In sum, “[t]he objective of the statutory appraisal process is to find a fair value for the shares of the parties seeking dissolution and to award the 50 percent shareholders seeking dissolution the liquidation value they would have received had their dissolution action been allowed to proceed to a successful conclusion.” (Ibid.; accord, Go, at p. 531, 101 Cal.Rptr.3d 736..)

Section 2000, subdivision (a), defines “fair value” as “the liquidation value as of the valuation date but taking into account the possibility, if any, of sale of the entire business as a going concern in a liquidation.” Subdivision (b) provides “[i]f the purchasing parties (1) elect to purchase the shares owned by the moving parties, and (2) are unable to agree with the moving parties upon the fair value of [such] shares, and (3) give bond with sufficient security to pay the estimated reasonable expenses (including attorneys’ fees) of the moving parties if those expenses are recoverable under subdivision (c), the court upon application of the purchasing parties ... shall stay the winding up and dissolution proceeding and shall proceed to ascertain and fix the fair value of the shares owned by the moving parties.”

June 2, 2026 Law and Motion Calendar PAGE 31 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ Section 2000, subdivision (c), instructs that “[t]he court shall appoint three disinterested appraisers to appraise the fair value of the shares owned by the moving parties, and shall make an order referring the matter to the appraisers so appointed for the purpose of ascertaining the value ... The award of the appraisers or of a majority of them, when confirmed by the court, shall be final and conclusive upon all parties.

The court shall enter a decree, which shall provide in the alternative for winding up and dissolution of the corporation unless payment is made for the shares within the time specified by the decree. If the purchasing parties do not make payment for the shares within the time specified, judgment shall be entered against them and the surety or sureties on the bond for the amount of the expenses (including attorneys’ fees) of the moving parties. Any shareholder aggrieved by the action of the court may appeal the court's decision.”

If the purchasing parties want “to prevent the winding up and dissolution, they shall pay to the moving parties the value of their shares ascertained and decreed within the time specified ... . On receiving payment or tender thereof, the moving parties shall transfer their shares to the purchasing parties.” (§ 2000, subd. (d).)

When the court fixes the fair value of the shares owned by the moving parties in an involuntary dissolution, “the valuation date shall be ... [the date the involuntary dissolution] action was commenced ... . However, ... the court may, upon the hearing of a motion by any party, and for good cause shown, designate some other date as the valuation date.” (§ 2000, subd. (f).)

(Crane v. R. R. Crane Investment Corp. (2022) 82 Cal.App.5th 748, 756–758 (footnotes omitted).)

Here, Webb does not oppose WRI’s request to stay the cross-complaint’s involuntary dissolution claim (Cross-Complaint, First Cause of Action), in light of WRI’s election to proceed under § 2000. Accordingly, Gary Webb’s request for an involuntary dissolution of WRI is HEREBY STAYED, pending the § 2000 procedure, and the posting of a bond, in an amount to be determined. (Corp. Code § 2000.)

The valuation date for the § 2000 proceeding shall be February 2, 2026, the date on which the suit for involuntary dissolution was commenced. (Corp. Code, § 2000, subd. (f).) The appraisers shall determine the fair value of Gary Webb’s shares based on the standards set forth in Corporation. Code section 2000.

The Court hereby sets a further hearing for July 21, 2026 at 2:00 p.m. in Department 4, for the purpose of selecting appraisers, setting the bond amount, and determining deadlines/scheduling.

Appraisers.

Corporation Code section 2000, subdivision (c) provides, in part:

(c) The court shall appoint three disinterested appraisers to appraise the fair value of the shares owned by the moving parties, and shall make an order referring the matter to the

June 2, 2026 Law and Motion Calendar PAGE 32 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ appraisers so appointed for the purpose of ascertaining the value. The order shall prescribe the time and manner of producing evidence, if evidence is required...

Neither party has proposed any specific appraiser. During an ex parte application on March 24, 2026, the court discussed the issue of the appraisers and counsel stated that the appraiser would need to be able to value ranches, horses and stables. The court reached out to colleagues in more rural counties and passed on to counsel some recommendations on potential ways to locate appraisers. Since neither party provided names, the court assumes that it will be difficult to find three appraisers with the expertise necessary to value the physical assets of the company.

In addition to the appraisal of the ranch, horses, and staples, it appears to the court based upon the briefing that the appraisers will also have to have expertise in appraising Webb’s claims of mismanagement, which are necessary for a valuation. (See Goles v. Sawhney (2016) 5 Cal.App.5th 1014, 1019 [“Section 2000 ... does not permit a lack-of-control discount when determining the fair value of a minority shareholder interest.”]; Brown v. Allied Corrugated Box Co. (1979) 91 Cal.App.3d 477, 485 [same].) It is unclear to the court if there are three appraisers who have expertise in both fields.

There needs to be a consensus of fair market value from at least two of the appraisers and this court needs to confirm an award of the majority of the appraisers; the court cannot take an average of the appraisers’ value if there is not a consensus, but instead must determine fair value de novo. (Goles v. Sawhney (2016) 5 Cal.App.5th 1014, 1020.) Thus, selecting appraisers who have the time to discuss their opinions to see if consensus can be reached is important.

Within five (5) day of notice of entry of the Order, the parties shall meet and confer regarding proposed appraisers. At least ten (10) days prior to the next hearing date, the parties shall either (a) jointly propose three independent appraisers (and provide their qualifications, hourly rate, statement that they are disinterested), or (b) file competing proposals, with each side proposing three appraisers, along with this information.

Bond amount.

Corporations Code section 2000, subdivision (b) requires that the party electing to proceed under section 2000 “give bond with sufficient security to pay the estimated reasonable expenses (including attorneys’ fees) of the moving parties if those expenses are recoverable under subdivision (c) ...” WRI’s moving papers did not propose any specific bond amount. Webb’s Opposition requests a bond of “at least $500,000,” but offers no evidence supporting such a large figure. WRI’s Reply brief requests a bond of $25,000.

The Court lacks sufficient information/evidence to determine an appropriate bond amount at this time. It also is unclear exactly what expenses the bond is meant to reimburse. At least 10 court days before the July 21, 2026 hearing, each party shall file a supplemental brief plus declarations with admissible evidence addressing the bond amount. Webb’s counsel shall provide the background and reasonable hourly rate of all attorneys and staff working on this case.

June 2, 2026 Law and Motion Calendar PAGE 33 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ Only one appraisal is necessary. The parties dispute whether Webb owns 37.5% of WRI (WRI’s position) or 50% of WRI (Webb’s contention). (See Cross-Complaint, Sixth Cause of Action.) Accordingly, Webb’s argues the appraisers should provide two valuations: one assuming a 37.5% ownership, and a second assuming a 50% ownership. Webb argues that two valuations are needed, because the per share value could differ depending on whether he owns 37.5% or 50%. The court disagrees.

First, even under Webb’s 50% ownership claim, he would not have a controlling interest. Second, the cases discussing the section 2000 valuation proceedings indicate that section 2000 appraisers should not provide different valuations based on a minority interest. (See Goles v. Sawhney, supra, 5 Cal.App.5th at p. 1019; Brown v. Allied Corrugated Box Co., supra, 91 Cal.App.3d at p. 485.)

The appraisers should provide a valuation of WRI, and the value of Webb’s shares can then be calculated based on his percentage ownership, whether it be 37% or 50%.

All asserted claims, including those in the Cross-Complaint, are STAYED pending the section 1200 proceeding. WRI’s Motion asks the Court to stay this entire case (including the Cross- Complaint) pending resolution of the section 1200 proceeding. Webb, conversely, argues that the Court should only stay the Complaint and the Cross-Complaint’s First Cause of Action (seeking WRI’s involuntary dissolution).

Both parties appear to acknowledge that the decision whether to stay the cross-complaint’s five other causes of action is discretionary with the Court. (See Opp. at 7-8 [Webb, arguing: “That discretion is squarely with this Court.”]); Koenig v. Centralia Limited Investors (2025) 112 Cal.App.5th 1174, 1191-92 [noting the court’s discretion to stay other claims asserted together with dissolution claim under analogous proceeding involving limited partnership].)

Gary Webb’s Cross-Complaint asserts the following causes of action:

1. Involuntary dissolution (Corp. Code § 1800); 2. Breach of fiduciary duty (Corp. Code § 309); 3. Conversion; 4. Fraud; 5. Accounting; 6. Declaratory relief, seeking a declaration that:

a. Gary owns 50% of the shares; b. Gary is entitled to past owed dividends; c. Corporate profits were wrongfully diverted by Defendants; d. Gary is entitled to a buyout under fair market conditions.

WRI’s Complaint, and the Cross-Complaint’s First Cause of Action (seeking WRI’s involuntary dissolution) are HEREBY STAYED pending the § 1200 proceeding.

June 2, 2026 Law and Motion Calendar PAGE 34 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ Exercising the Court’s discretion, the Cross-Complaint’s Second through Fifth Causes of Action are HEREBY STAYED pending the section 1200 proceeding. In addition to the practical reasons for staying these claims, they appear to be derivative in nature (Schrage v. Schrage (2021) 69 Cal.App.5th 126, 151), and since the appraisers will be required to consider the value (if any) of derivative claims, these claims should be stayed pending the section 1200 proceeding. (Goles v.

Sawhney, supra, 5 Cal.App.5th at p. 1019 (“[A] determination of the fair value of the shares of a corporation under section 2000 includes an assessment of the value, if any, of pending derivative actions and their effect on the fair value of the shares.” [citing Cotton v. Expo Power Systems, Inc. (2009) 170 Cal.App.4th 1376, 1374].)

Exercising the Court’s discretion, the Cross-Complaint’s Sixth Causes of Action is also HEREBY STAYED pending the section 1200 proceeding. Whether to stay the Cross- Complaint’s declaratory relief claim presents a more difficult question, because it seeks, in part, a declaration that Webb owns 50% of WRI, which is a disputed issue that will not be determined by the appraisers. Nonetheless, permitting discovery to proceed on this claim/issue while the § 1200 proceeding is on-going would undermine some of § 1200’s objectives, such speed and cost saving.

And as WRI points out, if WRI’s appraised value is “insignificant” (Reply at 7) or closer to the 2024 appraised WRI value of $216,000 (Suppl. Frechette Decl., Ex. 1), then it may not matter much whether Gary Webb owns 37.5% or 50%, in which case, judicial resources would be saved by deferring Gary Webb’s “improper dilution” claim. (See Reply at 7 [WRI arguing: “Conversely, if Gary Webb is correct that his shares are worth millions of dollars, WRI will be dissolved (and if he is right, all will be millionaires.)”) Either way, for the purpose of promoting efficiency and minimizing cost, the Court stays Gary Webb’s dilution claim, along with all other asserted claims.

The court finds the stay particularly important in this case. “Section 2000 does not provide for a full evidentiary hearing, nor for depositions of the appraisers.” (Abrams v. Abrams-Rubaloff & Associates, Inc. (1980) 114 Cal.App.3d 240, 247.) The appraisers will have the right to interview witnesses and review books and records. Their value will resolve the issues in the crosscomplaint. Thus, there is no need for discovery on the cross-complaint.

Conclusion. WRI’s request to proceed under Corporation Code section 2000 is conditionally granted. The Court sets a further hearing for July 21, 2026 at 2:00 p.m. in Department 4 to determine the appraisers, the bond amount, and to determine deadlines/scheduling. All asserted claims are STAYED immediately until further notice.

If the tentative ruling is uncontested, it shall become the order of the court. Thereafter, counsel for plaintiff shall prepare a written order consistent with the court’s ruling for the court’s signature, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.