In response to last week’s BVWire™ item that quoted U.S. Tax Court Judge David Laro as having become “well-acquainted with the five models most commonly used to calculate marketability discounts,” a subscriber asked for more clarification regarding the models. His Honor was quick to respond, noting that at last year’s “Summit on Discounts for Lack of Marketability” (DLOM) held at the University of San Diego School of Law, some of the top valuation experts in the country discussed and debated the multiple techniques and models most commonly used to arrive at the lack of marketability discount.
“Courts, the government and the private community need to resolve these different techniques to produce a standard that can be respected,” Laro says, noting that the Summit will reconvene this year in October to resume the debate. “This year, with Jim Hitchner as the moderator, a distinguished panel will show how those models work [in real practice]. Among the different models and databases to be presented and applied will be these:
“The San Diego Summit has the virtue of bringing together high quality speakers in a neutral, academic-type environment and to give peer review to their examination of the lack of marketability discount,” Laro observes. “Our goal is to bring resolution to the problem of the diverse techniques involved in calculating DLOM. The San Diego meeting is a dynamic approach to these issues. Valuators will want to be present to observe and participate in this leading discussion.” For more information on the October 9th Summit, including the panel of distinguished presenters and how to register, click here. On the same page, we’ve also posted a podcast of the highlights from last year’s summit, summarized by Brian Pearson, with commentary by Stuart Weiss.
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