Cases added to BVLaw valuation case law database this month

A sampling of new cases added to the BVLaw database where litigation resolved around issues of business valuation include:

In re Greater Southeast Community Hospital Corp., 2012 Bankr. LEXIS 618 (Feb. 22, 2012)

In fraudulent conveyance action, court admits errors in its own discounted cash flow valuation of hospital, but denies motion to reconsider, finding the trustee has the burden to present competent expert evidence regarding reasonably equivalent value.                                 

Experts: Neil Demchick (plaintiff); Kevin Moss (defendant)

Judge: Teel Jr.

State/Jurisdiction: Federal/ Washington, D.C.

Court: U.S. Bankruptcy Court

Type of case: bankruptcy

SIC code and industry: 8062 General Medical and Surgical Hospitals


Carlton Energy Group, LLC v. Phillips, 2012 Tex. App. LEXIS 1299 (Feb. 14, 2012)

Court of Appeals reinstates full $66.5 million award for tortious interference with contract to develop natural gas reserves, even though this amount exceeded the valuation by plaintiff’s expert and was most likely derived from defendant’s industry report at the time of the breach. 

Experts: Peter Huddleston and Henry Crichlow (plaintiff)

Judge:  Jennings

State/Jurisdiction: Texas

Court: Court of Appeals

Type of case:  breach of contract

SIC code and industry: 1311 Crude Petroleum and Natural Gas


Wandry v. Commissioner, T.C. Memo. 2012-88 (March 26, 2012)

Tax Court upholds defined value clause in transfers of family LLC interests, overruling IRS’s public policy concerns, among other arguments.

Experts: none

Judge:  Haines

State/Jurisdiction: Federal

Court: Tax Court

Type of case:  federal tax

SIC code and industry: 6733 Trusts, Except Educational, Religious, and Charitable (personal trusts, estates, and agency accounts)

Caluori v One World Technologies, Inc., 2012 U.S. Dist. LEXIS 25508 (Feb. 27, 2012)

Court affirms expert’s use of prior lump sum settlement agreement in calculating reasonable royalty for infringement damages under the market approach, after showing that no other licenses existed and the settlement agreement directly related to the patent-in-suit. 

Experts: Stephen P. Heath (plaintiff); Richard Bero (defendant)

Judge:  Snyder

State/Jurisdiction: Federal/California

Court: U.S. District Court

Type of case: IP

SIC code and industry: 5251 Hardware Stores


University of Pittsburgh v. Varian Medical Systems, Inc., 2012 U.S. Dist. LEXIS 17162 (Feb 10, 2012)

District court finds that entire market value rule applies only when unpatented features are combined with patented invention, denying this and numerous other objections by defendant to plaintiff’s reasonable royalty calculations.

Experts: John Hansen (plaintiff); Bruce McFarlane (defendant)

Judge: Schwab

State/Jurisdiction: Federal/Pennsylvania

Court: U.S. District Court

Type of case:  IP

SIC code and industry: 8093 Specialty Outpatient Facilities, Not Elsewhere Classified


In re Marriage of Gelman, 2012 Wash. App. LEXIS 353 (Feb. 21, 2012)

A medical partnership’s exclusive contract to provide anesthesiology services to a hospital is an intangible asset, but since buy-sell agreement limits wife’s interest to $1.00, the court finds she has no ownership interest in the business and the contract is not a distributable marital asset.

Experts: Steven Kessler

Judge: Spearman

State/Jurisdiction: Washington

Court: Court of Appeals

Type of case: marital dissolution

SIC code and industry: 8011 Offices and Clinics of Doctors of Medicine (except mental health specialists, HMO medical centers, and ambulatory surgical and emergency centers)