Business Valuation Law News


Blue-Sky Method in Valuing a Car Dealer—Redux

In a recent issue of the BVLaw Alert, we published a short piece about a shareholder dissent/oppression appellate decision in Tennessee regarding the valuation of a “high-end” car dealership. Our headline noted, “Court Tweaks Blue-Sky Method in Valuing a Car Dealer.” We received a question from a reader asking whether the rule of thumb blue-sky method was explained in the case. Read more >>

Subsequent Transaction Used to Find Damages Without Trial in New York Case

In this surmised summary judgment as to damages, a New York trial court awarded damages to the plaintiff in a breach of contract suit. The determination of damages was made without a trial but “on paper.” Additionally, the court used a subsequent sale of the stock to determine the damages and opine that the company was “worthless.” Read more >>

New IRS Trap for GRATs When There Is a Merger Pending

The Chief Counsel office (IRS) recently released a memorandum, which comes to two primary conclusions. First, under the fair market value standard, the hypothetical willing buyer and willing seller of a company would consider a pending merger when valuing stock for gift tax purposes. Second, the retained interest is not a qualified annuity interest under § 2702 of the Internal Revenue Code (Code) because the donor used an outdated appraisal that did not take into account all the facts and circumstances of a pending merger. Read more >>

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