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In appraisal action involving sale of public company, court says sale process had “objective indicia of reliability,” justifying use of deal price for fair value determination. 

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King v. King

This divorce case appeal deals with three primary issues: the determination of the value of insurance agency marital asset, the determination of the amount of personal goodwill attaching to the insurance agency, and the appropriate amount of alimony. The court remands the value of the business as it relates to the exclusion by the trial court of the liabilities the business owed, remands as to the appropriate amount of personal goodwill, and remands as to the erroneous level of income of the husband for determination of alimony.

Florida Trial Court’s Valuation Findings, Including Personal Goodwill Determination, Do Not Hold Up Under Appeals Court Scrutiny

This divorce case appeal deals with three primary issues: the determination of the value of insurance agency marital asset, the determination of the amount of personal goodwill attaching to the insurance agency, and the appropriate amount of alimony. The court remands the value of the business as it relates to the exclusion by the trial court of the liabilities the business owed, remands as to the appropriate amount of personal goodwill, and remands as to the erroneous level of income of the husband for determination of alimony.

Derek Scott Williams PLLC v. Cincinnati Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court declined to grant a motion to dismiss the claim of plaintiff as to coverage for loss of business income but does dismiss the claim of coverage under the civil authority provision of the policy. The court found the wording of the policy sufficiently vague, especially as to the meaning and definition of the word “loss.” In the case of the civil authority provision of the policy, the court decided that plaintiff has not alleged that “[a]ccess to the area immediately surrounding the damaged property is prohibited by civil authority.”

Court Declines Motion to Dismiss Claim of Coverage for Loss of Income, but Dismisses the Claim of Coverage Under the Civil Authority Provision

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court declined to grant a motion to dismiss the claim of plaintiff as to coverage for loss of business income but does dismiss the claim of coverage under the civil authority provision of the policy. The court found the wording of the policy sufficiently vague, especially as to the meaning and definition of the word “loss.” In the case of the civil authority provision of the policy, the court decided that plaintiff has not alleged that “[a]ccess to the area immediately surrounding the damaged property is prohibited by civil authority.”

Equity Planning Corp. v. Westfield Ins. Co.

In this business interruption case resulting from mandatory restrictions to control COVID-19, the court grants a motion to dismiss claims of the plaintiff. The plaintiff’s arguments that it suffered physical loss or damage to its properties did not sway the court. Nor did its arguments that the civil authority provisions and virus exclusion in the policy were not applicable to deny its claims.

Court Grants Insurance Company’s Motion to Dismiss Plaintiff’s Complaint That It Suffered Covered Loss of Income Due to COVID-19 Restrictions

In this business interruption case resulting from mandatory restrictions to control COVID-19, the court grants a motion to dismiss claims of the plaintiff. The plaintiff’s arguments that it suffered physical loss or damage to its properties did not sway the court. Nor did its arguments that the civil authority provisions and virus exclusion in the policy were not applicable to deny its claims.

Tax Court Allows for ‘Slight’ Discount for Lack of Control for Majority Interests in Real Estate Holding Companies

In a gift and estate tax dispute, the estate and Internal Revenue Service agreed to apply discounts for lack of control and marketability to the majority interests in a number of real estate holding companies. The U.S. Tax Court noted that, in prior decisions, the court found no discount for lack of control applied. However, given the parties’ agreement, here, the court said it would apply a “slight” or “low” discount.

Estate of Warne v. Commissioner

In a gift and estate tax dispute, the estate and Internal Revenue Service agreed to apply discounts for lack of control and marketability to the majority interests in a number of real estate holding companies. The U.S. Tax Court noted that, in prior decisions, the court found no discount for lack of control applied. However, given the parties’ agreement, here, the court said it would apply a “slight” or “low” discount.

Family Tacos, LLC v. Auto Owners Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants motions of the defendant to dismiss claims of the plaintiff. The plaintiff files claims for coverage under its insurance policy for losses resulting from COVID-19 shutdowns and seeks to establish a class. The court decides that coverage is not provided under the policy because there is no physical loss; the civil authority provision is likewise not effective, and there is a virus exception that is applicable to the case at hand.

Plaintiff Fails to Convince the Court That Physical Loss or Physical Damage Has Occurred; Virus Clause Applies and Defendant’s Motion to Dismiss Is Granted

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants motions of the defendant to dismiss claims of the plaintiff. The plaintiff files claims for coverage under its insurance policy for losses resulting from COVID-19 shutdowns and seeks to establish a class. The court decides that coverage is not provided under the policy because there is no physical loss; the civil authority provision is likewise not effective, and there is a virus exception that is applicable to the case at hand.

Innovation Ventures, L.L.C. v. Custom Nutrition Labs., L.L.C.

This case involves a consideration of motions by both the plaintiff and the defendant to exclude the testimony of the other party’s expert witness on the basis of Daubert and the Federal Rules of Evidence. The plaintiff’s expert offered testimony on how to calculate lost profits based on the plaintiff’s market share. The defendant’s expert offered testimony as to weaknesses in the plaintiff’s calculations and opinions on damages. The court denied both of these cross-motions.

The District Court Refuses to Throw Out Experts Under Daubert Motions, Citing Differences in Admissibility and Scrutiny Under Cross-Examination

This case involves a consideration of motions by both the plaintiff and the defendant to exclude the testimony of the other party’s expert witness on the basis of Daubert and the Federal Rules of Evidence. The plaintiff’s expert offered testimony on how to calculate lost profits based on the plaintiff’s market share. The defendant’s expert offered testimony as to weaknesses in the plaintiff’s calculations and opinions on damages. The court denied both of these cross-motions.

Hartman v. BigInch Fabricators & Construction Holding Co., Inc. (Hartman II)

High court says there is no blanket rule against the use of discounts in a compulsory, closed-market buyback; parties’ freedom to contract right allowed for discounts under shareholder agreement that mandated buyback of plaintiff’s minority interest by company under fair market value standard.

Indiana Supreme Court Rejects Blanket Rule Against Discounts in Compulsory, Closed-Market Share Buyback

High court says there is no blanket rule against the use of discounts in a compulsory, closed-market buyback; parties’ freedom to contract right allowed for discounts under shareholder agreement that mandated buyback of plaintiff’s minority interest by company under fair market value standard.

Tax Court Rejects Claimed Deduction for Management Fees

The U.S. Tax Court recently agreed with the Internal Revenue Service that management fees a corporation paid to its three shareholders over a three-year period were not deductible since none of the fees were paid “purely for services” and the petitioner failed to show the fees were “ordinary, necessary, and reasonable.” Rather, they represented disguised distributions, the court found.

Aspro, Inc. v Commissioner

The U.S. Tax Court recently agreed with the Internal Revenue Service that management fees a corporation paid to its three shareholders over a three-year period were not deductible since none of the fees were paid “purely for services” and the petitioner failed to show the fees were “ordinary, necessary, and reasonable.” Rather, they represented disguised distributions, the court found.

In re Kinser Group LLC

In § 506(a) hotel valuations, bankruptcy court finds creditor’s experienced expert premised appraisals on “fundamentally flawed” base assumption that hotels would be sold on the valuation date, where debtor’s plan said debtor would retain and operate hotels; court said replacement value applied.

Expert’s Failure to Review Debtor’s Reorganization Plan Results in ‘Defective’ Hotel Appraisals

In § 506(a) hotel valuations, bankruptcy court finds creditor’s experienced expert premised appraisals on “fundamentally flawed” base assumption that hotels would be sold on the valuation date, where debtor’s plan said debtor would retain and operate hotels; court said replacement value applied.

AFM Mattress Co. v. Motorists Commercial Mutual Insurance Company

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants a motion to dismiss claims of plaintiff. While plaintiff claims losses due to COVID-19, it does not sufficiently move the court to consider the virus exclusion of the policy inapplicable. A motion for a sur-response to espouse an alternative theory was also denied but without prejudice.

In COVID-19 Business Interruption Case, Court Finds Plaintiffs Did Not Argue Physical Loss and Virus Exemption Applies

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court grants a motion to dismiss claims of plaintiff. While plaintiff claims losses due to COVID-19, it does not sufficiently move the court to consider the virus exclusion of the policy inapplicable. A motion for a sur-response to espouse an alternative theory was also denied but without prejudice.

Sufficiently Comparable License Obviates Further Apportionment for Reasonable Royalty

Federal Circuit affirms plaintiff’s damages theory that relies on sufficiently comparable license to calculate reasonable royalty; court says there is an assumption that apportionment was built into negotiations for comparable license, obviating need for further apportionment in instant case.

Vectura v. GlaxoSmithKline LLC

Federal Circuit affirms plaintiff’s damages theory that relies on sufficiently comparable license to calculate reasonable royalty; court says there is an assumption that apportionment was built into negotiations for comparable license, obviating need for further apportionment in instant case.

Finkel v. Palm Park, Inc.

In LLC member dispute, court faces “conundrum” where fair value buyout seeks to avoid LLC’s dissolution and court leans on expert’s FMV valuation using net asset value approach premised on “orderly liquidation”; court notes FMV is based on hypothetical actors and transaction, not specific parties.

Court’s Fair Value Determination Leans Heavily on Expert’s Fair Market Valuation Premised on Liquidation

In LLC member dispute, court faces “conundrum” where fair value buyout seeks to avoid LLC’s dissolution and court leans on expert’s FMV valuation using net asset value approach premised on “orderly liquidation”; court notes FMV is based on hypothetical actors and transaction, not specific parties.

Graspa Consulting v. United Nat’l Ins. Co.

In this business interruption case resulting from mandatory shutdowns to control COVID-19, the court dismisses plaintiff’s (a restaurant chain owner/operator) claims against insurance company; plaintiffs did not incur (nor did it assert) physical damages to premises as required by the terms of the insurance policy.

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