Appeals court vacates going-concern valuation for firm being wound down

BVWireIssue #236-3
May 18, 2022

marital dissolution/divorce
business valuation, capitalization of earnings, reliability, owner-spouse, future income

In an Arizona divorce case, the couple owned a business that was being phased out. The husband had bought out the wife’s share and stopped operating the business—and started a new business in the same line of work. But the husband’s valuation expert was unsure that he knew about all this and valued the wife’s interest assuming a going concern, and the trial court accepted that valuation. The appellate court noted that the husband had not given the expert sufficient information that would have showed that the business was being wound down. Therefore, the trial court’s determination of value was vacated and remanded.

The case is In Re Riddle, 2022 Ariz. App. Unpub. LEXIS 304, and a case analysis and full opinion are available on the BVLaw platform.

Extra: The full agenda has been posted for the National Divorce Conference, sponsored by the American Academy of Matrimonial Lawyers (AAML) and BVR. The conference will be both online and on-site at the Venetian Resort on September 18-20, and up to 17.5 CPE/CLE credits are available.

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