Court Discredits Valuation Based on Unrealistic Projections and Incorrect Comparables

BVLaw
Court Case Digests
April 10, 2020
5074 Plumbing and Heating Equipment and Supplies (Hydronics)
423720 Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers
judicial dissolution
expert testimony, fair value, income approach, buyout, discount for lack of marketability (DLOM), discounted cash flow (DCF), market approach, working capital, public company comparables

Magarik v Kraus
Index No:606128-15, Nassau County, Supreme Court—State of New York, J. Destefano
US
State Court
New York
Supreme Court of New York (Trial Court)
Randall Paulikens (petitioner); Paul Marquez (respondents)
DeStefano

Summary

In buyout dispute, court rejects departing shareholder’s valuation based on income and market approach, where DCF model relied on company projections used for a bank loan that were never realized and, based on evidence, were “not accurate”; court says market approach used “incorrect comparables.”

See Also

Magarik v Kraus

In buyout dispute, court rejects departing shareholder’s valuation based on income and market approach, where DCF model relied on company projections used for a bank loan that were never realized and, based on evidence, were “not accurate”; court says market approach used “incorrect comparables.”

This article also appears in:
Business Valuation UpdateVol. 26 No. 11