In a divorce matter, an Indiana appellate court has upheld the lower court’s decision not to allow a discount for lack of marketability (DLOM) on a 100% control interest in a business the husband owned. The business consisted of six dental practices, to which the husband applied a very high DLOM, primarily to reflect that most of the revenue was from Medicaid (according to him). The wife’s expert applied no DLOM to the valuation, and the trial court accepted it partly because the husband had shown no intention of selling the business. This is the first time the issue of intention to sell has arisen in Indiana in this context. The appellate court affirmed the decision of the trial court. There are some interesting points in the details of the case, which is Kakollu v. Vadmaludi, 2021 Ind. App. LEXIS 232; 2021 WL 3137204. A case digest analysis and the full opinion are available on the BVLaw platform.

Extra: BVR’s recent DLOM survey reveals that there is significant disagreement among valuation experts as to whether a DLOM is appropriate for a 100% control interest.