The inability of financially successful cooperatives to recognize appreciation of patron’s equity creates a dilemma for cooperative members. The value of an enterprise as an investor-oriented firm may exceed the value of patron’s participation in a limited patronage horizon. This difference has been a factor in the decision of several cooperatives to restructure wholly or partially as investor-oriented firms. Reasons for valuation differences are discussed and related to six cases of cooperative restructuring.
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Lee F. Schrader (1989) studied this question.