In a Nebraska divorce case, neither side offered expert testimony as to the proper methodology for valuing the husband’s plumbing business. The husband’s expert (who did not testify) did a valuation of the physical assets of the business, which came to $288,575. The wife did not engage an expert and did a valuation herself, using a rule of thumb (ROT) of two to four times gross revenue, coming up with a range of $675,000 to $1.2 million.

Down the drain: The trial court disagreed with both valuations but used the wife’s ROT methodology, adjusting it downwards to one times gross revenue, which was $332,900. The court agreed with the wife’s assertion that the “business had more value than its physical assets” but did not explain why it chose the one times gross revenue multiple. (We note that the 2024 Business Reference Guide reports that MVIC/net sales for a plumbing business of this size is 0.42.)

The appellate court affirmed the trial court’s decision, noting that, since neither side presented expert testimony as to the proper methodology for valuing a business of this type, the trial court did not abuse its discretion in coming up with the value.

The case is Casement v. Casement, 2024 Neb. App. LEXIS 506, and a case digest and full opinion are available on the BVLaw platform.