3.3.5.3 Costs and fees of appraisal

In all state legislations, it is the norm today that barring exceptional circumstances, the costs of the appraisal are assessed against the corporation. Courts can apportion attorney's fees and expenses of expert as they deem equitable.1

Costs and fees will mainly be assessed against the corporation if the corporation fails to pay dissenting shareholders in time, or its estimation of fair value is substantially lower than the court's valuation. Costs and fees, however, are mainly assessed against the petitioner if the petitioner acts arbitrarily, vexatiously, or not in good faith.2 Furthermore, if the court in an appraisal proceeding finds out that the services of counsel for any shareholder are of substantial benefit to other shareholders similarly situated, and that the fees for those services should not be assessed against the corporation, the court may award to such counsel reasonable fees to be paid out of the amounts awarded to the shareholders who are benefited.3 "The discretionary nature of costs and attorney fees tends to encourage parties to act in good faith and settle without a judicial appraisal."4