This appeal in a California court involved a dispute over an appraisal of the plaintiffs’ 15% interest in a grocery store the defendant operated. The plaintiffs alleged that the award of the superior court was obtained by fraud and that the arbitrator prejudiced their rights.
View Case Digest View Case
Papin v. Papin
High court upholds classification and valuation of husband’s investment management business, noting business consists of book of business, which can exist without owner, and owner’s skills and expertise, which are his separate property; proceeds from sale of book of business are community property.
Trajectory of Owner’s Investment Management Business Raises Characterization and Valuation Issues
A complex divorce case in front of the Idaho Supreme Court featuring an investment management business that the husband had set up before and sold during the marriage raised noteworthy issues about the nature of the business and the characterization and valuation of its various components (book of business vs. owner’s skills). A related flashpoint was whether the nonowner spouse was entitled to any appreciation (enhancement) in the value of the business that occurred ...
R.D. Clark & Sons, Inc. v. Clark
Trial court’s fair value determination in buyout dispute involving family business withstands appeal, including decision not to tax affect or apply majority and minority discounts; appellate court finds there is no controlling state law on the issues and upholds trial court’s findings on facts.
Courts Reject Tax Affecting and Use of Discounts in Connecticut Buyout Dispute
Trial court’s fair value determination in buyout dispute involving family business withstands appeal, including decision not to tax affect or apply majority and minority discounts; appellate court finds there is no controlling state law on the issues and upholds trial court’s findings on facts.
Bankruptcy Court Calls Choice of Comparables ‘Key Value Driver’ in Expert Valuations
Ruling on plan confirmation, Bankruptcy Court finds debtor expert’s determination of total enterprise value of reorganized debtor more credible than committee for unsecured creditors’ expert; in adopting debtor expert’s comparable company analysis, court calls choice of comparables set a “key value driver.”
In re Emerge Energy Services LP
Ruling on plan confirmation, Bankruptcy Court finds debtor expert’s determination of total enterprise value of reorganized debtor more credible than unsecured creditors’ expert; in adopting debtor expert’s comparable company analysis, court calls choice of comparables set a “key value driver.”
McLelland v. Paxton
In dissolution dispute, appeals court affirms trial court’s finding, based on plaintiff expert testimony, that dissolved professional LLC had entity goodwill at trial based, in large part, on ownership of three leases and operation of offices that doctors could use upon termination of partnership.
Washington State Appeals Court Adopts Rule on Entity Goodwill in Professional LLC
In dissolution dispute, appeals court affirms trial court’s finding, based on plaintiff expert testimony, that dissolved professional LLC had entity goodwill at trial based, in large part, on ownership of three leases and operation of offices that doctors could use upon termination of partnership.
IceMOS Tech. Corp. v. Omron Corp.
In contract dispute, court denies defendant’s Daubert motions, finding plaintiff’s experts are qualified based on extensive experience in relevant industry; experts could provide testimony relevant to surviving lost development support costs claim and their testimony is not unreliable as of now.
Plaintiff’s Projections Fail to Meet New York Test for Lost Profits or Lost Business Value
A breach of contract case in which the plaintiff asked for various types of economic damages is noteworthy for the court s extended discussion of what the plaintiff must show under New York law to make a case for lost profits. The court explained that the hurdle was particularly high for a new business or a business trying to break into a new market considering the company s lack of a financial track record. Damages must be ...
IceMOS Tech. Corp. v. Omron Corp.
In contract dispute, court says claims for lost profits and lost business value fail because, for both, plaintiff is unable to determine damages with reasonable certainty; relying solely on projections of future performance, without any proof of profit, is not enough under New York law.
Plaintiff’s Projections Fail to Meet New York Test for Lost Profits or Lost Business Value
A breach of contract case in which the plaintiff asked for various types of economic damages is noteworthy for the court s extended discussion of what the plaintiff must show under New York law to make a case for lost profits. The court explained that the hurdle was particularly high for a new business or a business trying to break into a new market considering the company s lack of a financial track record. Damages must be ...
Helen Ziegler Benjamin v. Island Management
In a family dispute featuring related closely held companies and claims of breach of fiduciary duty and mismanagement, court, based on financial testimony from plaintiffs’ expert, orders inspection of defendant company’s records, including general ledger, fee agreements, and executive compensation.
Financial Expert Testimony Persuades Court to Order Inspection of Company Records
In a family dispute featuring related closely held companies and claims of breach of fiduciary duty and mismanagement, court, based on financial testimony from plaintiffs’ expert, orders inspection of defendant company’s records, including general ledger, fee agreements, and executive compensation.
Perser v. Perser
Court upholds award to nonowner spouse related to value of husband’s medical practice where husband bought practice prior to marriage and was sole owner; court notes there was goodwill attributable to the business and finds other factors indicate business had assets that were marital property.
Factors Other Than Goodwill Support Award to Nonowner Spouse Related to Owner’s Medical Practice
Court upholds award to nonowner spouse related to value of husband’s medical practice where husband bought practice prior to marriage and was sole owner; court notes there was goodwill attributable to the business and finds other factors indicate business had assets that were marital property.
Linde v. Linde
Appellate court upholds trial court’s finding that majority shareholder breached fiduciary duty to minority shareholder and buyout order; trial court performed careful valuation analysis finding defense expert’s asset-based approach was “simply an improper method of valuation in the present case.”
Court Says Asset Approach ‘Is Simply an Improper Method’ in Present Appraisal Proceeding
Appellate court upholds trial court’s finding that majority shareholder breached fiduciary duty to minority shareholder and buyout order; trial court performed careful valuation analysis finding defense expert’s asset-based approach was “simply an improper method of valuation in the present case.”
County of Maricopa v. Office Depot Inc.
In denying defendant’s pretrial motion to exclude plaintiff’s expert testimony under Daubert and Rule 37, which specifies sanctions for failure to make disclosures or cooperate in discovery, court finds note-containing version of expert report is a draft not subject to discovery under Rule 26.
Expert Report Containing Notes Qualifies as Draft Not Subject to Discovery
In denying defendant’s pretrial motion to exclude plaintiff’s expert testimony under Daubert and Rule 37, which specifies sanctions for failure to make disclosures or cooperate in discovery, court finds note-containing version of expert report is a draft not subject to discovery under Rule 26.
Cline v. Sunoco
In class-certification context, court says plaintiff’s damages expert meets Rule 702/Daubert requirements as they apply in early stage of litigation; expert is qualified, and, damages model, even if not fully developed, provides a sufficiently reliable way to calculate damages on classwide basis.
Expert Testimony Offered at Class-Certification Stage Survives Daubert Challenge
In class-certification context, court says plaintiff’s damages expert meets Rule 702/Daubert requirements as they apply in early stage of litigation; expert is qualified, and, damages model, even if not fully developed, provides a sufficiently reliable way to calculate damages on classwide basis.
Office of Chief Counsel Internal Revenue Service Memorandum
IRS private letter ruling says that, under facts, gift tax valuation must consider merger that was being negotiated at the time the donor transferred company stock into a trust where the merger was only announced after the stock transfer and the announcement prompted an increase in stock value.
IRS Private Letter Ruling on Whether to Consider Pending Merger in Gift Tax Valuation
IRS private letter ruling says that, under facts, gift tax valuation must consider merger that was being negotiated at the time the donor transferred company stock into a trust where the merger was only announced after the stock transfer and the announcement prompted an increase in stock value.
In re Appraisal of Jarden Corp. (II)
Responding to petitioners’ motion for reargument, court concedes and corrects errors in court’s original DCF analysis but finds corrected DCF model still corroborates the original fair value determination; court affirms its reliance on unaffected market price as fair value indicator.