Tennessee Appeals Court Clarifies Use of Discounts and Tax Affecting in Court-Ordered LLC Buyout

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Court Case Digests
July 30, 2020

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5812 Eating and Drinking Places
722511 Full-Service Restaurants
judicial dissolution
discount for lack of control (DLOC), expert testimony, fair value, tax affecting, appraisal, breach of fiduciary duty, buyout, discount for lack of marketability (DLOM), fair market value (FMV), gross v. commissioner
Raley v. Brinkman
2020 Tenn. App. LEXIS 341
US
State Court
Tennessee
Court of Appeals
Stephen M. Maggart (plaintiff/seller); Thomas M. Price (defendant/buyer)
Clement

Summary

In LLC member buyout dispute, the Court of Appeals finds the term “fair value” does not contemplate the use of shareholder-level discounts. However, tax affecting is relevant evidence when determining the going-concern value of subject S corp. Trial court must consider evidence on tax affecting.

See Also

Raley v. Brinkman

Full Text of Court Cases
July 30, 2020

In LLC member buyout dispute, the Court of Appeals finds the term “fair value” does not contemplate the use of shareholder-level discounts. However, tax affecting is relevant evidence when determining the going-concern value of subject S corp. Trial court must consider evidence on tax affecting.