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Restaurant valuations decline to their lowest levels in four years
Restaurant valuations declined to their lowest levels in four years and cap rates continued to rise to their highest levels in recent history.
Affects of Sept. 11, 2001, Considered in Lost Profits Determination Involving California Restaurant
The California Court of Appeals, 1st District, reversed a lost profits award in this tortious interference with a business expectancy case involving a restaurant.
Can a Trial Court Value a Restaurant Based on Cash Flow But Ignore Gross Sales?
Husband appeals value of a restaurant that included only a portion of his expert report’s (cash flow) without accounting for the other portion (gross sales).
A Channel Analysis Is Key When Valuing a Fast-Food Restaurant
There has been a seismic shift in the operations of limited-service restaurants since the pandemic—and there’s no sign of reverting. Channels of revenue have been upended. Therefore, an analysis along these lines is important when valuing these entities, advises an expert in this space.
Arizona Court Says Owner’s Goodwill in Restaurants Represents Community Asset
Appeals court affirms trial court’s decision to give wife portion of value of goodwill in two restaurants husband set up with new partner during separation, where restaurants carried husband’s name and featured recipes he had developed during the marriage; goodwill is a community asset.
Using the transaction method
The Transaction (Merger and Acquisition) Method , Kyle Garcia , National Litigation Consultants' Review , March 2002, pp. 1-3. The transaction (or merger and acquisition) method is often the mos ...
Personal Goodwill, Asset Approach, and Other Sticky Topics in Restaurant Values
Last month’s digest of Mistretta v. Mistretta generated some immediate subscriber feedback in the BVWire™. Most seemed to accept he trial court’s agreement to reconsider the case due to the current economic downturn (and the appellate court’s denial of th ...
Real-world case studies of small business valuations
A Basic Guide for Valuing a Company , 2nd ed., Wilbur M Yegge, New York: John Wiley & Sons, Inc., 2002. 111 River Street, Hoboken, NJ 07030 (201) 748-600, fax (201) 748-6088, www.w ...
In a Siblings Ownership Dispute, Court Decides No Oppression and No Sums Owed by the Plaintiff, Determines the Value of the Plaintiff’s 25% Interest
In this dispute among siblings owning restaurants in Connecticut, the court determined that there was no oppression against one of the siblings whose employment was terminated and there were no wrongful acts. The court determined the fair market value of the plaintiff’s membership interests but denied discounts for lack of control and lack of marketability.
Maryland Appellate Court Affirms Trial Court on Value of Husband’s Business as Well as Several Other Divorce-Related Issues
In this Maryland divorce case, the Court of Special Appeals affirmed the trial court on all appealed issues including marital property determinations; monetary award to the wife; determination of incomes of the husband and wife; and determinations of alimony, child support, and related expenses. The Court of Special Appeals also affirmed that the husband’s business was not a gift and was marital property, and it determined the value of the business as the wife’s expert presented. Both parties were forensic accountants.
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 granted a motion by the defendant insurance company to dismiss claims of plaintiffs; plaintiffs did not argue that they sustained a physical loss, and coverage would have been denied nevertheless by the virus exemption.
Court Considers Deal Price Persuasive Indicator of Fair Value and Approves Synergy Deduction
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; synergy deduction is appropriate to account for value from anticipated cost and tax-related savings due to merger.
New book analyzes small business transaction data
Transaction Patterns is a very interesting and useful book for both the business appraiser and the business broker. The data is compiled from the BIZCOMPS database, but similar analysis could be done on The IBA Market Database and Pratt's Stats, and I believe that results would be similar.
Arkansas Court Clarifies What Sort of Businesses Can Have Personal Goodwill
Arkansas Court of Appeals rejects claim by owner of nonprofessional business that any value in business represents personal goodwill attributable to him; court says concept of personal goodwill has not been extended to nonprofessional business “such as the one involved here.”
Court Affirms Acceptance of the Wife’s Gross Sales Valuation Method for the Marital Business, Remands for Double Counting of Business Assets
In this Pennsylvania divorce matter, the appellate court accepted the wife’s valuation of the marital business using the “gross sales approach,” despite the husband’s objection that she was not qualified to determine the value. The trial court master recommended the wife’s value be accepted. However, the appellate court finds that the trial court double counted four business assets and remanded for a redetermination of the marital estate.
Court Deems Future Lost Profits Formula an Exercise in Speculation
Court rejects lost profits projections based on expert’s unique formula finding calculation was based on “questionable” assumptions; court also finds no “hard” evidence that damage from defendant’s conduct had long-term effect on plaintiff’s customers.
In COVID-19 Business Interruption Case, Court Finds Business Cannot Show Insurer’s Coverage Denial Breached Contract
In business interruption case resulting from mandatory shutdowns to control COVID-19, court finds plaintiff chiropractic clinic failed to show insurer breached its policy; court says plaintiff did not demonstrate “tangible damage” to property and failed to overcome policy’s express virus exclusion.
Plan of Reorganization Cannot Be Approved Because Essentially Only the Debtor Would Benefit
The Bankruptcy Court turned down a plan and amended plan of reorganization primarily because only the debtor would benefit from the plan and creditors would be left with little or no return. The court ordered a new plan be delivered to the court as soon as possible because time was of the essence.
BIZMINER: The New Alternative for Industry and Market Research
Editor s note: Competitive analysis is essential to every business valuation report. This month, we ll look at the new offerings from BizMiner. Next month, Russ Glazer will review improvements in the RMA industry research tools available from ValuSource. BVR began offering the BizMiner databases in April 2009 as it became increasingly concerned about data and pricing problems with Integra. Like Integra, BizMiner s data collection and analysis methods correct for biases that occur when relying on single ...
Tennessee Appeals Court Clarifies Use of Discounts and Tax Affecting in Court-Ordered LLC Buyout
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.
Court Considered Comparable Sale and Husband’s Direct Competition in Valuing the Parties’ Restaurant/Bar
The Virginia Court of Appeals affirmed the trial court's valuation and division of a marital business, a restaurant-bar. The trial court split the difference between the parties' valuations. However, it criticized the husband's expert regarding the sale.
Just in time: BVR’s new Guide to Restaurant Valuations
The U.S. restaurant industry should gradually recover this year as consumers ease recession-era spending cuts, says a new report from the National Restaurant Association (NRA).
Trial court relies on just cash flows (but not gross sales) to value a high-revenue restaurant
A couple owned a 60% interest in a successful Ohio restaurant. During their divorce, the wife’s expert valued the restaurant at $650,893.
Herremans v. Fedo (In re Herremans)
This case involved a hotly contested battle over the fate of a Ponderosa restaurant in Michigan. The two owners, having had a falling out, pursued contentious litigation to wrest control of the restaurant from each other. Having no business valuation available to the court, the court was left with a real estate appraisal and limited evidence of assets and liabilities to determine the fair value of a 50% interest in the restaurant to be used in the buyout of one of the shareholders by the other shareholder.
Valuing Restaurants
Valuing Restaurants Teleconference Handbook August 6, 2009 Panelists: Edward Moran, MBA, CPA/ABV, CVA, CBA Kevin R. Yeanoplos, CPA/ABV/CFF, ASA and John T. Hall, CPA, CFD Please note: This Handbook does not qualify for self study CPE credits. Copy ...