MUM—the Mulitattribute Utility Model—an allocation method for distinguishing enterprise from personal/professional goodwill in divorce cases, just went to trial in Florida and received ratification by both the court and the appraiser in Neary v. Neary, Case No. 06-DR-3254 (18th Cir., Seminole, FL). “I’ve used this method in several divorce cases in Florida,” reports Kenton Thompson (RSM McGladrey, Inc., Orlando), “but this is the first one that has gone through the complete trial process and had a judge weigh in on the analysis. I find it to be a very useful way to analyze and present the analysis of enterprise versus personal goodwill in these cases,” he adds. “It obviously requires professional judgment and some subjective decision making by the valuation expert, but so does every method that we utilize. We all recognize that cookie cutter approaches and formulas aren’t accurate and carry their own sets of assumptions.”
The Neary case is not likely to see appellate court review, Thompson says. So far, the Illinois Court of Appeals is the only jurisdiction to publish a decision accepting the model, developed by David Wood. For more on MUM and its availability, see BVWire #54-1. To learn even more about goodwill, consider adding BVR’s Guide to Personal vs. Professional Goodwill to your reference library.
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