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Value of Husband’s Business Affirmed Based on Trial Judge’s Reasonable Discretion
In this Iowa appellate case regarding a marital dissolution, the appellate court affirmed the decision of the trial court judge as to the value of the husband’s construction company. The wife’s expert used a valuation date of Dec. 31, 2020, versus trial date of December 2021 because of availability of information on the business.
Kwak v. Bozarth
The Appeals Court of Massachusetts affirmed the trial court determination of the value of the wife’s dental practice. A large amount and growth of the revenues was from prosthodontics. The wife provided her own value without expert testimony, and the trial court found the methodology not appropriate. The husband’s expert determined the value based on a capitalization of earnings method, with adjustments for compensation to the owner and a 21% discount for goodwill. The appeals court affirmed the decision of the trial court, primarily accepting the valuation of the husband’s expert.
Massachusetts Trial Court Rejects Wife’s Nonexpert Value of Her Dental Practice—Appeals Court Affirms
The Appeals Court of Massachusetts affirmed the trial court determination of the value of the wife’s dental practice. A large amount and growth of the revenues was from prosthodontics. The wife provided her own value without expert testimony, and the trial court found the methodology not appropriate. The husband’s expert determined the value based on a capitalization of earnings method, with adjustments for compensation to the owner and a 21% discount for goodwill. The appeals court affirmed the decision of the trial court, primarily accepting the valuation of the husband’s expert.
Lieberman-Massoni v. Massoni
The trial court in this New York divorce awarded the value of the husband’s class B units in lieu of awarding a portion of the actual units to the wife and also barred the wife from any distributions on those units occurring after the valuation date.
New York Appellate Court Affirms Award of Value of Husband’s Class B Units in Lieu of Actual Distribution of Share of Units
The trial court in this New York divorce awarded the value of the husband’s class B units in lieu of awarding a portion of the actual units to the wife and also barred the wife from any distributions on those units occurring after the valuation date.
Gutierrez v. Padilla
The plaintiffs bought two automotive supply businesses from the defendant. The plaintiffs alleged that the defendant and the defendant’s broker made representations about the condition of the businesses during the sale and breached various terms of the sale contract. The district court dismissed complaints against the defendant’s broker and awarded damages to both parties regarding alleged actions in regard to the sale contract. The appeals court affirmed the district court’s decisions.
New Mexico Appeals Court Affirms Awards of Damages to Both Parties on Claims of Breach of Contract
The plaintiffs bought two automotive supply businesses from the defendant. The plaintiffs alleged that the defendant and the defendant’s broker made representations about the condition of the businesses during the sale and breached various terms of the sale contract. The district court dismissed complaints against the defendant’s broker and awarded damages to both parties regarding alleged actions in regard to the sale contract. The appeals court affirmed the district court’s decisions.
Gamache v. Hogue
In a motion related to a lawsuit asserting ERISA violations under the ESOP plan for the defendants, including the Administrative Committee of Technical Associates of Georgia Inc. ESOP and certain individuals, the defendants moved to exclude the testimony and report of the plaintiffs’ expert, Jeffrey Krenzel. Krenzel was an “employee benefits lawyer” with 21 years’ experience, including eight years as a partner in a firm specializing in ESOP transactions. The court determined that Krenzel was qualified and that his opinions and report were reliable and helpful to the trier of fact.
U.S. District Court in Georgia Allows Testimony of Attorney as to ESOP Transaction Process for Employment Agreements
In a motion related to a lawsuit asserting ERISA violations under the ESOP plan for the defendants, including the Administrative Committee of Technical Associates of Georgia Inc. ESOP and certain individuals, the defendants moved to exclude the testimony and report of the plaintiffs’ expert, Jeffrey Krenzel. Krenzel was an “employee benefits lawyer” with 21 years’ experience, including eight years as a partner in a firm specializing in ESOP transactions. The court determined that Krenzel was qualified and that his opinions and report were reliable and helpful to the trier of fact.
Maher v. Cmejrek
The wife appealed the trial court’s decisions as to the values of the husband’s interests in his various medical practices and clinics and challenged the trial court’s determination of the husband’s income for support purposes. The appellate court affirmed the values of the medical practices and clinics and remanded the determination of income for support purposes for recalculation.
Indiana Appellate Court Affirms Valuation of Medical Practice Interests of Husband but Remands for Recalculation of Husband’s Income for Child Support
The wife appealed the trial court’s decisions as to the values of the husband’s interests in his various medical practices and clinics and challenged the trial court’s determination of the husband’s income for support purposes. The appellate court affirmed the values of the medical practices and clinics and remanded the determination of income for support purposes for recalculation.
Expert Survives Daubert—Allowed to Testify as to Lost Business Value
The case dealt with two motions to preclude testimony of an expert witness as to the loss in value of the plaintiff’s business. The plaintiff was an environmental consulting firm allegedly injured as a result of the actions of certain employees including breach of their fiduciary duty. The court concluded that the witness may testify because his report was based on sufficient facts and data and he applied reliable principles to the facts of this case.
White Buffalo Env’t, Inc. v. Hungry Horse, LLC
The case dealt with two motions to preclude testimony of an expert witness as to the loss in value of the plaintiff’s business. The plaintiff was an environmental consulting firm allegedly injured as a result of the actions of certain employees including breach of their fiduciary duty. The court concluded that the witness may testify because his report was based on sufficient facts and data and he applied reliable principles to the facts of this case.
Hoensheid v. Comm’r (In re Estate of Hoensheid)
The taxpayers made a valid gift of stock, but they realized and recognized gain because their right to the proceeds from the sale occurred before the gift was made. They also were not entitled to a charitable contribution deduction because they did not procure a qualified appraisal. The taxpayers were not liable for an underpayment penalty.
Petitioners Not Allowed a Charitable Contribution—Did Not Use a Qualified Appraiser
The taxpayers made a valid gift of stock, but they realized and recognized gain because their right to the proceeds from the sale occurred before the gift was made. They also were not entitled to a charitable contribution deduction because they did not procure a qualified appraisal. The taxpayers were not liable for an underpayment penalty.
Griggs v. Griggs
The husband appealed this Vermont divorce case to the State Supreme Court inter alia to challenge the inclusion of PPP loan proceeds by the wife’s expert in determining the cash flows of the husband’s electrician services business for purposes of determining a value of the business using the capitalization of earnings method. The Supreme Court affirmed the lower trial court on this issue and allowed the PPP proceeds to be included in the cash flows.
Vermont Supreme Court Allows Inclusion of PPP Proceeds in Cap Earnings Cash Flow for Determination of Value
The husband appealed this Vermont divorce case to the State Supreme Court inter alia to challenge the inclusion of PPP loan proceeds by the wife’s expert in determining the cash flows of the husband’s electrician services business for purposes of determining a value of the business using the capitalization of earnings method. The Supreme Court affirmed the lower trial court on this issue and allowed the PPP proceeds to be included in the cash flows.
Tax Court (Grudgingly) Allows Tax Affecting Under the SEAM Method
This was a gift tax valuation case the U.S. Tax Court decided. Gifts of minority interests in The Biltmore Co. were made from the its shareholders, the Cecils, to their children and grandchildren. The IRS audited the gift tax returns and assessed deficiencies for reporting too low fair market values of the gifts of The Biltmore Co. stock. Both sides presented experts to value the gifted interests. The experts agreed that the cash flows should be tax affected. The court accepted the tax affecting while allowing that it was not an admission by the Tax Court that tax affecting should apply in all cases. The Tax Court made changes to the values presented and cobbled together a final value that resulted in refunds to the taxpayers/petitioners.
Estate of Cecil v. Comm’r
This was a gift tax valuation case the U.S. Tax Court decided. Gifts of minority interests in The Biltmore Co. were made from the its shareholders, the Cecils, to their children and grandchildren. The IRS audited the gift tax returns and assessed deficiencies for reporting too low fair market values of the gifts of The Biltmore Co. stock. Both sides presented experts to value the gifted interests. The experts agreed that the cash flows should be tax affected. The court accepted the tax affecting while allowing that it was not an admission by the Tax Court that tax affecting should apply in all cases. The Tax Court made changes to the values presented and cobbled together a final value that resulted in refunds to the taxpayers/petitioners.
Nix v. Nix
This case concerned an appeal of a trial court opinion in a divorce case in Indiana. The trial court based the value of a warehousing and logistics business on an offer to purchase the business the daughter of the divorcing parties presented at trial. The mother, the owner operator of the business, rejected the offer, made prior to the filing for dissolution of marriage. The appellate court remanded the decision of the trial court for revaluation of the business with instructions to determine a value within the valuation conclusions experts submitted for each party at trial.
Indiana Appellate Court Remands Value of Business—Trial Court Value Based on a Defective Offer to Purchase
This case concerned an appeal of a trial court opinion in a divorce case in Indiana. The trial court based the value of a warehousing and logistics business on an offer to purchase the business the daughter of the divorcing parties presented at trial. The mother, the owner operator of the business, rejected the offer, made prior to the filing for dissolution of marriage. The appellate court remanded the decision of the trial court for revaluation of the business with instructions to determine a value within the valuation conclusions experts submitted for each party at trial.
Cummings v. Cummings
In this appeal of a divorce case in Kentucky, the court determined that the family court did not abuse its discretion in its distribution of the proceeds of the sale of the husband’s veterinary practice. The family court determined that most of the proceeds were enterprise goodwill and, thus, marital property.
Kentucky Court Does Not Consider Date of Marriage Value of Veterinary Practice—Most of Value Is Enterprise Goodwill and, Thus, Marital
In this appeal of a divorce case in Kentucky, the court determined that the family court did not abuse its discretion in its distribution of the proceeds of the sale of the husband’s veterinary practice. The family court determined that most of the proceeds were enterprise goodwill and, thus, marital property.
O’Mahony v. Whiston
In a case of disputes among the owners of an Irish soccer bar in New York City, the court awarded economic damages and punitive damages after the controlling owners took proceeds of a lease buyout of the bar’s prior location to establish a new identical bar in a new location while cutting out the minority owners from the new bar. Using assets of the old corporation and thereby misappropriating a corporate opportunity of the old corporation, they started a new identical bar (including the name) in a new location in a corporation the control owners set up.
New York Court Awards Lost Corporate Opportunity and Punitive Damages in Restaurant-Related Case
In a case of disputes among the owners of an Irish soccer bar in New York City, the court awarded economic damages and punitive damages after the controlling owners took proceeds of a lease buyout of the bar’s prior location to establish a new identical bar in a new location while cutting out the minority owners from the new bar. Using assets of the old corporation and thereby misappropriating a corporate opportunity of the old corporation, they started a new identical bar (including the name) in a new location in a corporation the control owners set up.