S Corp Status Adds ‘Discrete’ Value to Business, Chancery Says

BVLaw
Court Case Digests
December 21, 2017
5093 Scrap and Waste Materials
423930 Recyclable Material Merchant Wholesalers
judicial dissolution
fair value, income approach, capitalization rate, corporate tax, discount for lack of marketability (DLOM), real estate, statutory appraisal, synergy, s corporation, going concern value, sales comparison

Wright v. Phillips
2017 Del. Ch. LEXIS 857
US
State Court
Delaware
Court of Chancery
Charles Sterner (BV, petitioner); Dale Mitchell (BV, respondent)
Glasscock III

Summary

In fair value determination analogous to statutory appraisal valuation, Chancery says companies’ S corp status “has discrete value applicable here,” as captured in expert’s use of 14.5% tax rate (as opposed to 31%); court approves marketability discount.

See Also

Wright v. Phillips

In fair value determination analogous to statutory appraisal valuation, Chancery says companies’ S corp status “has discrete value applicable here,” as captured in expert’s use of 14.5% tax rate (as opposed to 31%); court approves marketability discount.