Marriage Of Connolly

591 P.2d 911 (1979)

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Nature of the Case

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Facts

H and W were married April 16, 1961, in Los Angeles, and they have three minor children. The couple separated July 29, 1973. In August 1973, W filed a marital dissolution. Disposition of the community property was conducted from May 17 to 20, 1976. Consistent with Civil Code section 4800, the parties agreed that all securities owned by the community were to be valued as of May 17, 1976, for purposes of division. There were 10,000 shares of the common stock of Amdahl Corporation (Amdahl). H had become an 'outside' director of Amdahl in 1972 and had been permitted to purchase these shares at 6 cents a share. In 1973 Amdahl had unsuccessfully attempted a public offering of its stock. A second attempt in 1974 was also frustrated. In November 1975, seven months prior to trial, Amdahl publicly announced a third attempt at a public offering. The company has not yet turned a profit, but many wouldn't be surprised if it earned $10 million in 1976.' H testified accurately that recent private sales of Amdahl shares had been in the range of $5 to $10 per share and that the company had set a value of not more than $10 per share on the stock for the purpose of stock option plans for employees and directors. W valued the stock at $100,000 and suggested that it be awarded to H. The court issued its original memorandum of intended decision June 29 indicating that it proposed to award the Amdahl stock to husband and to require him to execute and deliver an unsecured promissory note for half the value of the stock, without designating the principal amount of the note. The 10,000 Amdahl shares, valued at $7.50 per share, were awarded to H. W got a note for $37,500 payable in 11 annual installments with interest at 7 percent. In August, an underwriter agreed to price the shares at $30 a share, at the low end of the $30 to $35 range originally estimated. The opening price of the stock was $27.50 a share, translated into a value for 10,000 shares as of the date of the offering, of $275,000. W filed a motion to reopen the interlocutory and final judgments of dissolution alleging fraud on the part of H in failing to reveal voluntarily that Amdahl contemplated a public offering. The court refused, and W appealed.