Business Valuation in Divorce Case Law Compendium, Fourth Edition

Divorce Compendium Fourth Edition 2019

April 2019 Hardcover, PDF

BVR (editor)

Business Valuation Resources, LLC

The most current analysis on how courts throughout the U.S. view business valuation methods and the issues that arise in divorce cases.

Divorce is a state law matter. Since U.S. states have different statutes and case law pertaining to marital distribution, it can be difficult for attorneys and financial experts alike to keep up with key valuation developments. With in-depth analysis from BVR’s legal team, the new Business Valuation in Divorce Case Law Compendium, Fourth Edition is an indispensable tool for every divorce professional to stay ahead of the game.

Now updated with five new chapters and 40 new cases that have helped shape the landscape of business valuation in divorce proceedings, this must-have compendium offers advice from top business valuation experts on how goodwill and S corporations are valued, and also offers insight into active/passive appreciation, double-dipping, fair value, and more. This one-of-a-kind legal resource saves you hours of research time with comprehensive coverage on the best (and worst) practices that attorneys and experts have used in making their case in courts throughout the country.

This publication and many more are also available for download with a subscription to the Digital Library or BVResearch Pro.
$249.00/PDF Add to cart
This is an approximate price based on the current exchange rate of {rate}. All purchases will be settled in USD.
Categories: marital dissolution/divorce
  • A.C. v. J.O.
    In divorce case, New York trial court prefers excess earnings over price-to-revenue method to value wife’s dental practice, because the former accounts for the business’s lack of tangible assets—a fact specific to professional offices in New York where re ...
  • Abedi v. Abedi
    Court of Appeal says trial court’s valuation of husband’s endodontic practice was arbitrary where trial court adopted valuation methods husband’s experts proposed but substituted key elements of their analyses with court’s own unsubstantiated figures.
  • Adams v. Adams
    Massachusetts Supreme Judicial Court rejects direct capitalization method for valuing hedge fund partnership interest, finding DCF method is more appropriate, plus tax-affecting.
  • Ahern v. Ahern
    Maine clarifies its position on enterprise versus personal goodwill.
  • Alexander v. Alexander
    Indiana appellate court considers adopting fair value standard in divorce.
  • Alexander v. Alexander
    In divorce case, appellate court upholds valuation of a small agriculture-related company based on the capitalization of net income approach; record supports court-appointed expert’s capitalization rate, including his selection of the supply-side equity r ...
  • Allison v. Allison
    Increase in value of owner’s minority interests in companies was due to owner’s efforts, which were “facilitated” by nonowner’s work in home; appreciation was active and marital property; no error in awarding nonowner half of profits from sale of assets.
  • Atherton v. Atherton
    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.”
  • Bair v. Bair
    Court says appreciation analysis suffers from improper use of active/passive framework; valuation of company must include all assets, including real estate whose value dropped, where marital labor contributed to overall appreciation of separate property.
  • Balicki v Balicki
    Court declines to distinguish personal from enterprise goodwill where the parties failed to produce evidence of personal goodwill component at trial.
  • Balicki v. Balicki
    Pennsylvania statute requires family courts to consider tax and other cost ramifications associated with each asset to be divided in divorce.
  • Banchefsky v. Banchefsky
    Divorce court limits professional goodwill of dental practice to the value of a non-compete agreement allocated in the sale of the practice during the proceedings.
  • Barnes v. Barnes
    Court affirms income-based valuation of husband’s dental clinic, including deduction for non-compete attributable to associate, but finds lack of signs that husband intended to sell practice precludes use of DLOM.
  • Barth v. Barth
    Appellate court affirms “sizeable” discounts for real estate development companies, including ones for bulk sale and carrying costs.
  • Baumboree v. Baumbouree
    Appeals court agrees with trial court that valuation in stock agreement is binding in partition action even though non-owner spouse refused to sign agreement and agreement did not mention divorce as one of the circumstances in which valuation applied.
  • Berg v. Young
    Appeals court says trial court erred in interpreting prenuptial agreement but reached correct result when it rejected wife’s claim to enhanced value of husband’s separate interest in car dealership by ruling appreciation in value was passive, not active.
  • Bernier v. Bernier (I)
    Massachusetts Supreme Court applies tax affecting analysis to valuation of subchapter S corporations in divorce.
  • Bernier v. Bernier (II)
    Massachusetts Court of Appeals remands the case—for the second time—to the trial court for an appropriate valuation of the parties’ S corporations, including a tax affecting according to the “Kessler metric” (adopted from the Delaware Chancery Court).
  • Bohme v. Bohme
    In a divorce case involving dental practice, appeals court says using income stream “as a tool” to value a professional business and then using it “as actual income for a spousal support calculation” does not per se amount to impermissible double dipping.
  • Brave v. Brave (I)
    State appellate court finds “professional license goodwill” exception, which treats personal goodwill as professional spouse’s separate property, applies to “unique,” successful restaurant and directs trial court to determine how much of the business’s go ...
  • Brave v. Brave (II)
    State high court rejects per se extension of personal goodwill concept to nonprofessional businesses and finds in case at issue restaurant’s valuation indicates goodwill is marketable and thus corporate and subject to marital distribution.
  • Brickner v. Brickner
    Frustrated by lack of consensus among expert valuations of marital business, Ohio Court of Appeals adopts the only valuation (cost approach) where the experts had limited agreement.
  • Brooks v. Brooks
    Fair market value standard requires court to consider more than just the appraised values of real estate held by the husband’s minority interest in LLCs; it requires consideration of marketability and minority discounts, plus transfer restrictions.
  • Brown v. Brown
    Issues were value husband's interest in the family florist business, whether stock should be discounted for minority interest or marketability, and whether stock was a gift.
  • Brown v. Brown
    Trial court’s determination of medical practice value in divorce fails for lack of sufficient evidentiary findings ...
  • Browne v. Browne, Jr.
    Appeals court defers to trial court’s method of applying one expert’s cap rate to other expert’s cash flow analysis when valuing spouse’s interest in closely held company and says “purposeful” application of minority discount has support among valuators.
  • Brusach v. Brusach
    In divorce case featuring veterinary practice, appeals court finds trial court did not err when it did not differentiate between personal and enterprise goodwill and trial court’s spousal support determination did not represent unlawful double dipping.
  • Bulloch v. Bulloch
    Court says deducting personal goodwill from valuation of physician’s interest in outpatient surgical center is appropriate even if physician was not an employee of center; entity’s income and total value depended on its physician members’ patient base.
  • Burnett v. Burnett
    State Court of Appeals affirms expert’s use of excess earnings method to determine value of husband’s interest in large medical practice finding the calculation properly separated personal from enterprise goodwill.
  • Burstein v. Burstein
    Appeals court affirms trial court’s valuation of medical practices based on buyout provisions where wife’s expert made no attempt to ascertain businesses’ FMV by any other valuation method.
  • Burton v. Mooneyham
    Divorce court discredits conflict between expert’s testimony at trial and then a rehearing, when he originally said the husband’s rental car business was worth a net $200,000 as of 2008 but then later changed his opinion to say it was worth nothing at tha ...
  • Carney v. Carney
    Reviewing court says in valuing owner spouse’s auto transport business and performing equitable distribution analysis, trial court erred when it refused to consider tax effects of potential sale of business before assigning asset to owner; case remanded.
  • Caveney v. Caveney
    Massachusetts Court of Appeals confirms that the fair value standard in divorce cases precludes application of any discount, either for lack of marketability or lack of control, for any closely held company, even highly restricted shares in family owned b ...
  • Champion v. Champion
    The issue in this case was whether the trial judge erred in valuing of the husband's business.
  • Charles v. Charles
    California appellate court affirms trial court’s rejection of husband’s motion to value the community business at separation rather than at trial; the latter is the presumed valuation date under state law and the husband’s request was not “good cause,” bu ...
  • Chattree v. Chattree
    Court admits expert’s testimony despite his failure to appear for scheduled deposition where husband’s refusal to provide necessary corporate information delayed expert’s completion of the business valuation and says any error in the opinion was “invited”
  • Cobane v. Cobane
    In valuing owner-spouse’s minority interest in LLC, trial court “would have been well within its discretion to apply a minority discount,” appeals court says, but it was not error for trial court to reject a discount based on certain questionable actions related to the owner’s interest.
  • Code & Code
    Court says enterprise goodwill valuation of practice was based on expert calculation using excess earnings method and as such is supported by requisite “any” evidence; also, statute allows inclusion of practice’s premarital value in property distribution.
  • Colclasure v. Colclasure
    State Supreme Court finds trial court erred in valuing husband’s business interest based on buy-out agreement the parties ignored; on remand, valuation must meet statutory requirement of a fair and just division.
  • Cox v. Cox
    Court confirms appropriateness of applying a 50% marketability discount to the post-marital value of a steel business but not to its premarital valuation, citing the changes in the steel industry and company-specific factors.
  • Crews v. Crews
    Appeals court rejects business goodwill award to the husband as a community asset, finding there was no goodwill in the business entities, as the trial court well knew; the determination is based entirely on the expectancy of husband’s future earnings.
  • Crider v. Crider
    Appeals court affirms trial court’s above fair market value determinations regarding husband’s interests in various family businesses and the resulting equalization judgment but rejects trial court’s means with which to enforce payment of judgment.
  • Cummings v. Cummings
    Arkansas court precludes deduction for "personal goodwill" when valuing a family owned, commercial business in divorce.
  • Davidson v. Davidson (I)
    The Michigan Court of Appeals affirmed the use of the market approach rather than an income capitalization method to value the parties’ businesses under the facts of this case. The lower court found the market approach more appropriate in light of the com ...
  • Davidson v. Davidson (II)
    Trial court did not err by excluding proffered appraisal expert; even though he had 30 years of accounting and real estate experience, he lacked a college degree and had never been qualified as a BV expert.
  • Doe v. Roe
    Court confirms trial court’s application of double discounts (marketability and minority) and evidence of prior sales to value several closely held interests in divorce.
  • Doyle v. Doyle
    Appeals court finds incongruities in trial court’s unreported cash income and profit rate inputs make court’s valuation of timber business meaningless; further, trial court failed to explain reason for equalization payment and arrived at incorrect amount.
  • Drumheller v. Drumheller
    Divorce court disallows minority discounts in valuation of husband’s 10% interest in printing company and his 33% interest in real estate holding company.
  • Duke v. Duke
    Appellate court affirms $5.4 million value for business that supports emergency services department in hospitals, finding that it appropriately accounted for the risks of losing customer contracts as well as the absence of a non-compete agreement with the ...
  • Elliott v. Elliott
    Husband appeals the judgment entry entered by the Ross County Court of Common Pleas. He argues that the trial court erred in determining the value of Westside Ceramic & Vinyl Tile.
  • Farmer v. Farmer
    Washington State Supreme Court rejects absolute rule for valuing converted employment stock options in divorce, deferring to trial courts’ broad authority to assess expert valuation of the options, including its reference to the tort framework of measurin ...
  • Farrell v. Farrell (I)
    Appellate court remands for trial court’s express valuation of husband’s business interests and for explanation of its unequal distribution, awarding all of the business interests to husband.
  • Farrell v. Farrell (II)
    Appeals court says trial court erred in allowing husband to pay substantial portion of wife’s share in marital property over multi-year period; trial court must order immediate equal division of stock in family businesses.
  • Finby v. Finby
    Appeals court says financial analyst spouse’s ability to induce clients to follow her when switching employer resembles goodwill in professional practices and represents a divisible community asset; trial court erred when it found analyst’s book of busine ...
  • Fleischmann v. Fleischmann
    This action for divorce was commenced on January 23, 2006.
  • Foppe v. Foppe
    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).
  • Freihage v. Freihage
    Appeals court acknowledges impossibility of duplicating calculations underlying trial court’s valuation of husband’s LLC owning McDonald’s franchises but surmises result hinges on treatment of funds from family trust to LLC as debt, rather than equity.
  • Fuller v. Fuller
    Appeals court says trail income generated by solo financial planning practice is different from professional goodwill; it can be sold separately or assigned, and there exists a formula for valuing it; trial court was right to consider it a marital asset.
  • Gallo v. Gallo
    Appeals court finds Ohio statute requires trial court to consider income from all sources in calculating spousal support and overrules Heller I to extent Heller imposes a flat prohibition against double dipping; mandate is to ensure fairness and equity.
  • Garman v. Garman
    Court rejects doctor’s claims that by departing from medical practice just before divorce, his $15,000 buy-sell payout limits practice value, crediting instead a net asset value, adjusted for routine quarterly bonuses.
  • Gaskill v. Robbins (I)
    Kentucky considers joining the majority of jurisdictions that distinguishes personal from enterprise goodwill.
  • Gaskill v. Robbins (II)
    Kentucky Supreme Court holds with majority rule that distinguishes enterprise goodwill (marital property, divisible) from personal goodwill (non-marital, non-divisible) in valuing professional practices for purposes of divorce.
  • Gaskill v. Robbins (III)
    Court of Appeals confirms trial court’s reliance on a valuation performed closer to date of petition (rather than date of decree), finding a variety of factors in support, including spouse’s dissipation of funds from the sole proprietorship.
  • Gentile v. Gentile
    Appellate court affirms lower court’s Fair Market Value (FMV) determination of husband’s S corp. medical practice, which incorporates goodwill value the wife’s expert calculated based on the Goodwill Registry.
  • Gifford v Gifford
    New York appellate court finds trial court’s spousal support determination violated double counting rule where expert valued husband’s solely owned engineering company based on an income approach and the business was a service business.
  • Gill v. Gill
    Earn-out payments related to sale of a marital asset were marital asset and subject to equitable distribution, Supreme Court’s majority says, even though value of the payments was uncertain as of the valuation date and the sale of the husband’s company took place after the valuation date.
  • Goldfarb v. Yelton
    Appellate court affirms trial court’s decision to apportion most of the stock sale proceeds the husband reaped during marriage in connection with a company he set up before marriage to the community under Pereira, finding that during marriage, he became t ...
  • Goodman v. Goodman
    Appeals court upholds trial court’s finding of enterprise goodwill, finding husband’s habit of periodically placing business assets in his children’s names as well as wife’s significant involvement in the business indicate business was “transferable.”
  • Goodwin v. Goodwin
    Divorce experts diverged by more than $1 million in valuing steel business, and court adopts the larger value based on thorough expert evidence and compliance with the correct valuation date under applicable law.
  • Goswami v. Goswami
    The trial court performed its own valuation of husband's medical practice, which was higher than both experts values. The court of appeals affirmed.
  • Grant v. Grant
    Appeals court says use of DLOM in valuing interest for divorce depends on interest’s characteristics not owner’s intent to sell the interest, but appeals court affirms trial court’s decision to apply “slight” or no DLOM based on intent to sell analysis.
  • Graves v. Tomlinson
    Husband presents two experts to value wife’s three health care businesses, a forensic accountant to normalize the records and a business valuation expert to assess value under all three approaches.
  • Grelier v. Grelier (I)
    Alabama court of appeals declines to address application of statutory fair value in divorce cases, holding that wife stipulated to fair market value standard at trial and fully litigated applicability of discounts within that context.
  • Grelier v. Grelier (II)
    This court's opinion of December 19, 2008, is withdrawn, and the following is substituted therefor.
  • Grow v. Grow
    When the original valuation date preceded the 2008-2009 economic crisis, trial court erred by failing to consider its impact on the value of the business prior to trial.
  • Gupta v. Gupta
    Trial court appropriately values three rural medical practices and imaging center at $780,000 based on expert testimony that includes marketability discount and excludes professional goodwill.
  • Halliday v. Halliday
    Trial court did not overvalue husband’s interests in various businesses since it applied a DLOC whenever the husband did not have a 100% interest in the company and a DLOM that was consistent with expert testimony, state Court of Appeals finds.
  • Hamelink v. Hamelink
    Appeals court agrees that in valuing husband’s S corp for marital distribution “national case law” (Kessler, Bernier) supports his expert’s tax affecting but says it must defer to trial court’s decision to adopt competing expert’s position not to tax affe ...
  • Hanusin v. Hanusin
    In a divorce case involving a closely held corporation, the appeals court finds trial court was justified to credit a 2004 stock purchase agreement instead of a 2012 settlement when valuing husband’s shares; the buyout was a true arms-length transaction ...
  • Hartley v. Hartley
    Court of Appeals overturns trial court’s order limiting discovery of law firm records to production of buy-sell agreement, finding the applicable “fair value” standard requires production of all relevant pricing information in divorce.
  • Hartline v. Hartline
    Appeals court says distinction between professional goodwill and future earnings capacity “evanesces” when valuing solo professional practice; trial court erred in adopting value based on guideline transaction method that considered professional goodwill.
  • Hayden v. Pittendrigh
    Court dismisses wife’s claim fraud against the husband, finding that she accepted $1 million for her share in the marital business, based on a limited appraisal, and waited too long after finding out the company sold for $54 million to bring her suit.
  • Haynes v. Haynes
    Divorce court adopts a broker’s net asset value for licensing bureau, finding that its lack of transferability was key applying to this approach versus a BV expert’s capitalization/excess earnings analysis.
  • Hebert v. Cote
    In appreciation in value case, court excludes nonowner spouse’s valuation testimony under Daubert, finding expert’s calculation of “minimum marital component” is not a methodology approved under the applicable SSVS for determining fair market value and also violated other SSVS requirements.
  • Held v. Held
    The issue in this marital dissolution case was whether the trial court correctly disallowed enterprise goodwill in valuing husband's insurance agency, Joseph Held Company.
  • Helfer v. Helfer (I)
    Courts that follow majority rule re: distinction of enterprise/professional goodwill in divorce need to make a compete record of valuation findings and rationale.
  • Helfer v. Helfer (II)
    Trial court has the discretion to rely primarily on rebuttal expert’s testimony to assign a zero value to the enterprise goodwill of a chiropractic practice.
  • Heller v. Heller (I)
    Court of Appeals determines, based on the nature of the husband’s interest in an S corporation, that the state marital dissolution statutes prohibit the double dip; i.e., the trial court awarding the wife an interest in the business and then awarding spou ...
  • Heller v. Heller (II)
    Court of Appeals determines, based on the nature of the husband’s interest in an S corporation, that the state marital dissolution statutes prohibit the double dip; i.e., the trial court awarding the wife an interest in the business and then awarding spou ...
  • Heller v. Heller (III)
    Court of Appeals ratifies its prior decisions concerning the prohibition against the double-dip in this case, but reverses the trial court’s support award as unreasonable and unsupported use of his business profits.
  • Henry v. Henry
    In community property partition case, appeals court upholds valuation of community-owned firm; firm is not responsible for debts of an acquired company that are personally guaranteed by husband but not by express corporate contract; valuation must not subtract debt amount.
  • Herbert v. Joubert
    In quantifying marital portion of appreciation of owner spouse’s separate property, trial court relies on owner’s “proportionate” share in company but also considers expert testimony as to third parties’ efforts and owner’s role in generating revenue; court rejects passive factor analysis.
  • Hill v. Hill
    Trial court was justified in disregarding any commercial goodwill in husband’s interest in a professional practice and relying on partnership agreement, Texas appeals court finds, where goodwill is not accessible and expert testimony as to its existence a ...
  • Hissa v. Hissa (I)
    Issue was whether trial court erred in preventing husband's counsel from referring to the expert's report during questioning and excluding the report.
  • Hissa v. Hissa (II)
    Appellate court upholds $553,000 valuation for medical practice based on trial court’s finding that by withholding financial information from wife’s expert, husband ended up discrediting his own expert’s valuation.
  • Hoebelheinrich v. Hoebelheinrich
    At issue in this case was the value of husband’s medical practice.
  • Howell v. Howell (II)
    At issue is whether the trial court erred in valuing husband's interest in his law firm.
  • Hugh v. Hugh
    Appeals court finds error in trial court’s refusal to value business; even if limited data caused expert’s estimate to fall short of AICPA standard, it was based on the market approach, a “sound and reasonable method to value a closely-held business.”
  • Hultz v. Kuhn
    Appellate court finds no error in trial court’s adoption of market-based value determination by husband’s expert; expert acknowledged this was not the preferred method to value the small company, but company’s problematic financials and uncooperative attitude “compelled” use of this approach.
  • Iacampo v. Oliver-Iacampo
    Appellate court affirms expert testimony regarding factors that contributed to active vs. passive appreciation of the marital business; even though his report didn’t make specific conclusions, it did apply a 10% discount for lack of control, which, while ...
  • In re Honer
    Court upholds expert’s idiosyncratic valuation approach based on ascertaining “marital value” of community’s grocery stores as opposed to stores’ “investment value”; since the stores were not sold, valuation properly captured their value to owner spouse.
  • In re Marriage of Alexander
    Court accepts “Multiattribute Utility Model” in calculating percentages of personal and enterprise goodwill for a professional practice.
  • In re Marriage of Armour
    Appellate court reverses the trial court’s in-kind division of 50,000 shares of company stock, finding that wife’s share would be redeemed at below-market, formula price while husband would continue to enjoy dividends and stock appreciation.
  • In re Marriage of Barten
    Appellate court permits valuation of professional’s earning capacity (goodwill) in appraisal of small law practice when there was no child or spousal support at issue.
  • In re Marriage of Bauer
    Appellate court upholds Business Reference Guide rules of thumb for valuing a physical therapy practice at 1.0 times gross income.
  • In re Marriage of Blazer
    California appellate court declines to adopt the prohibition against “double- dipping” in divorce.
  • In re Marriage of Broesder
    High court says trial court erred when it failed to consider tax implications where its final order appears to make sale of family ranch a necessity; evidence suggests there are no other assets with which to buy wife’s shares of ranch corporation at FMV.
  • In re Marriage of Bruns
    Divorce court confirms value of dental practice, excluding goodwill, is midway between a broker’s value and a BV expert’s.
  • In re Marriage of Cantarella
    Court rejects accountant’s preliminary valuation as lacking sufficient financial support to evidence value of marital business.
  • In re Marriage of Cheng
    Appeals court says there was no double dipping where the business, valued under an income approach, was a going concern, not a fixed asset, and would continue to generate income for owner spouse with which to pay maintenance award to nonowner spouse.
  • In re Marriage of Devries
    Divorce court finds AICPA BV standards (SSVS-1) instructive but not binding on valuation of goodwill.
  • In re Marriage of Erpelding
    Appellate court confirms trial court’s discounting of hog confinement facilities based on testimony of industry expert regarding “troubled” state of the industry; and further, it appropriately excluded considerations of tax consequences.
  • In re Marriage of Gelman
    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 contrac ...
  • In re Marriage of Hagar
    Court declines to accept “calculation of value” by CPA expert in divorce, because it relied on industry rules of thumb and lacked required level of judgment compared to complete valuation.
  • In re Marriage of Hanscam
    Court affirms reliance on income approach to value solo CPA practice, including distinction between personal and enterprise goodwill, but rejects trial court’s finding that 25% of the firm was the husband’s separate property, based on his demonstrated int ...
  • In re Marriage of Hartung
    Court rejects income approach for valuing interest in business with low bar of entry and few repeat customers; court also says asset-based valuation following Section 179 tax treatment understates true value of the company and requires upward adjustment.
  • In re Marriage of Hashemian
    California approves excess earnings and “formula” approach to valuing atypical life insurance firm, based on industry compensation and revenue data.
  • In re Marriage of Johnson
    Appeals court strikes divorce ruling adopting income-based valuation of enterprise value of owner’s financial services business, valuation conflicts with data from similar transaction that occurred close to valuation date and involved owner-spouse.
  • In re Marriage of Kerkhoff
    Divided appeals court upholds decision not to award any part of appreciation in separate gifted stock to nonowner spouse; dissent says length of marriage and contributions by wife, regardless of their nature, support equal division of stock appreciation.
  • In re Marriage of Kingery
    In valuing the husband’s 25% interest in a law firm, the trial court erroneously accepted a valuation that included a “purchase acquisition cost” or “goodwill cost” derived from a buy-out of a former partner.
  • In re Marriage of Kirkendoll
    Court says awarding husband family business plus business income taken out to make business-related payments does not fit “notion of an impermissible ‘double dip’”; business was not a diminishing asset, and wife did not receive either of those assets.
  • In re Marriage of Meek-Duncomb
    Divorce court declines to credit “uncertified” business appraisal by CPA who reviewed only tax returns and Excel spreadsheets, without considering business’s assets and debts, sources of revenues and customer relationships.
  • In re Marriage of Preston
    In divorce case, appellate court upholds valuation based on opinion of husband’s expert using MUM method to separate total goodwill value into personal and enterprise components; court also upholds use of small marketability discount where owner spouse is the sole owner of the company.
  • In re Marriage of Price and Turkanis
    Court approves use of comparable sales data in valuing high-tech startup company, even though comparable transactions took place within one year after the valuation date.
  • In re Marriage of Restaino
    Court of Appeals reverses the trial court’s finding that pay-outs under a law firm dissolution agreement represented income to the husband rather than his equity share in a community asset, to which the wife could claim a portion.
  • In re Marriage of Rodenback
    Appellate court disavows day-of-trial valuation by expert that used the husband’s “off the cuff” forecasts, preferring value based on historical earnings, without consideration of the tax burden the husband would have to bear in making the equalization pa ...
  • In re Marriage of Ross
    Divorce court considers proper period of earnings to estimate goodwill value of law practice under excess earnings approach.
  • In re Marriage of Theurer
    California Court of Appeal confirms trial courts $2.4 million valuation of orthodontic practice, including $1.9 million goodwill but excluding patient prepayments.
  • In re Marriage of Vandal
    Appeals court says record supports nonowner spouse’s claim to a share of owner’s CPA’s practice; business changed from separate to community property, and most of its value consisted of professional goodwill, which was created by community labor.
  • In re Marriage of Williams
    Montana high court rejects 35% minority discount to husband’s half interest in a closely held, family business, which he owned with his father and had equal say over operations, management, and application of funds.
  • In re Mauer
    Appeals court affirms trial court’s decision favoring asset approach for valuing owner spouse’s medical practices; unlike income approach, it avoids accounting for owner spouse’s future earning twice, in asset valuation and determination of alimony.
  • In re the Marriage of Hoker
    Divorce court finds that husband manipulated assets of trucking company during divorce to lower its net asset value, and discredits husband’s expert for relying on manipulated data and applying a 10% marketability discount.
  • In re the Marriage of Thornhill (I)
    Colorado Court of Appeals considers extending statutory fair value standard—including preclusion of marketability discounts—to valuing close corporation in divorce.
  • In re the Marriage of Thornhill (II)
    Colorado Supreme Court declines to adopt statutory fair value standard in marital dissolution cases.
  • In re the Marriage of Tofte
    Issue was the value of husband's 10.1% interest in the family amusement park business and whether it was appropriate to apply a minority or marketability discount.
  • In re the Marriage of Watterworth
    Issue is whether court erred in valuing orthodontic practice based on formula in buy-sell agreement.
  • In the Matter of Cottrell
    Appellate court affirms trial court valuation of dental practice that included “substantial” goodwill value but did not apportion it between personal and business goodwill, noting that the appealing party bears the burden at trial to establish this amount ...
  • In the Matter of the Marriage of Gay
    Appellate court affirms trial court’s determination that—despite expert evidence from both parties—the valuation of the wife’s minority shares in a closely held was too speculative, particularly when no actual buyer was likely to buy the shares; a strong ...
  • Inzer v. Inzer
    Court finds that when a non-shareholder spouse signs a buy-sell agreement, she is bound by its value in divorce.
  • Jensen v. Jensen
    In deciding whether, in divorce, retained earnings in a closely held company that is separate property are includible in marital estate, appeals court creates presumption against inclusion and requires trial court to perform totality of circumstances review.
  • Jimenez v. Jimenez
    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.
  • K.T. v. M.T.
    Appeals court affirms trial court’s ruling finding that, without noncompete from owner-spouse, under FMV standard, financial advisor’s solo practice fetches only net book value of its tangible assets; most of value lies in owner-spouse’s personal goodwill ...
  • Keane v. Keane
    New York Supreme Court considers extending prohibition against double counting from professional licenses to tangible assets.
  • Kehrin v. Kehrin
    Husband’s valuation expert incorrectly reduced the hard assets (cash and accounts) of an ongoing business by a personal goodwill value.
  • Keig v. Keig
    State Court of Appeals values husband’s interest in a family agricultural business at $1 million, including a discount for lack of control, and finds lower court’s $250,000 Grace award to spouse to compensate for exclusion of the value of the business fro ...
  • Kminek-Nierenberg v. Kenneth Nierenberg
    Appellate panel affirms majority of rulings as to nonowner spouse’s right to appreciation of premarital and gifted property; lower court correctly determined passive and active immune assets in affecting equitable distribution of business assets.
  • Kowalska-Davis v. Davis
    Massachusetts Court of Appeals acknowledge trend in that state to find an equitable solution to the problem of the double dip in divorce, involving making separate findings regarding the income of the owner-spouse from the business and the income/assets o ...
  • Lacoste v. Lacoste
    Appeals court rejects trial court’s valuation of husband’s fitness training company noting trial court lacked necessary financial evidence as well as testimony from experts; appeals court remands requesting “adequate valuation,” excluding goodwill.
  • Lemmen v. Lemmen
    Court of Appeals affirms minority and marketability discounts for cash-rich, closely held business in divorce; dissent urges statutory fair value standard.
  • Loutts v. Loutts
    State spousal support statute does not flatly forbid double dipping, but requires courts to consider all circumstances of a particular case and principles of fairness, appellate court rules.
  • Lunn v. Lunn
    Appeals court finds enterprise goodwill is not a marital asset when the business is a sole proprietorship and orders trial court to produce a valuation of husband’s solo dental practice without “consideration of professional or enterprise goodwill.”
  • Mandell v. Mandell
    Texas court holds unsigned buy-sell agreement controls value of husband’s medical practice, a privately held professional association, in divorce.
  • May v. May
    At issue in this case is the nature of husband's practice goodwill. Testimony by both experts at trial established the goodwill as "personal."
  • McCarter v. McCarter
    Appeals court affirms trial court’s finding that all the goodwill in husband’s auction business is nontransferable where the husband is the only licensed auctioneer and the sole shareholder of the company and allows for expansion of concept of profession.
  • McKee v. McKee
    Tennessee appellate court finds that patient records constitute professional goodwill value and are not a divisible asset in divorce.
  • McNee v. McNee
    Trial court did not err in classifying owner-spouse’s personal loan to his business during marriage as a marital asset, appeals court finds; loan could be seen as an increase in value of owner’s business or a debt owed to parties, appeals court says.
  • McRae v. McRae
    Court finds that net asset value of healthcare software company includes undeposited earnings, despite husband’s contention that the check was for future services.
  • McReath v. McReath (I)
    Wisconsin appellate court holds that all salable professional and corporate goodwill in a private practice is divisible in divorce.
  • McReath v. McReath (II)
    Wisconsin Supreme Court upholds the standard that all saleable goodwill in a professional practice, as evidenced by a non-competition agreement, is a divisible marital asset; and that it is not “double-counting” to base a maintenance award on the income p ...
  • Miller v. Miller
    Georgia Supreme Court adopts majority rule regarding disposition of goodwill value of professional practice.
  • Mistretta v. Mistretta
    Court denies motion for rehearing of divorce valuation based on unforeseen economic recession of 2007 – 2008.
  • Moll v. Moll
    Issues are whether personal or professional goodwill constitute "property" or "a thing of value" and whether NY domestic relations statutes recognize goodwill as marital property.
  • Monaco v. Stewart
    Kentucky court finds personal goodwill value of the husband’s 25% interest in a regional anesthesiology practice to be negligible.
  • Moore v. Moore
    In a first, state high court “cautiously” decides enterprise goodwill is marital property subject to equitable division and affirms that personal goodwill is not; court rejects claim that only professionals can develop personal goodwill in a business.
  • Moore v. Moore
    State high court says plain language of property distribution statute does not permit reclassification of nonmarital property as marital property under active appreciation doctrine; court invalidates doctrine and overrules body of case law applying it.
  • Moore v. Moore, Inc.
    Appellate court affirms value of movie theatre businesses that falls midway between the experts’ estimates, finding that husband/owner could manipulate their costs and contracts, so wife’s expert had a basis for using industry cost standards but not indus ...
  • Moretti v. Moretti
    Court finds that enterprise goodwill is marital, personal goodwill is not.
  • Myhre v. Myhre
    Appellate court upholds valuation of husband’s business where trial court faced two equally plausible values from experienced appraisers who gave “reasoned explanations” for their differing choices as to the treatment of a year with unusually high income ...
  • Nieman v. Nieman
    Appeals court says consideration of tax consequences related to owner-spouse’s business is “too speculative” because owner has no plan to sell in near future; trial court improperly assumed current tax rates and business interests would remain constant.
  • O'Donnell-States v. States
    Trial court did not err in valuing dental practice at an amount less than the husband's prior buy-in value; and did not improperly include personal goodwill value when neither expert included its value ...
  • Palmerino v. Palmerino
    Massachusetts court precludes discounts in valuing marital business in divorce, and says that while income approach is preferred, net asset value may be appropriate in the absence of determinable market value.
  • Pappas v. Pappas
    In valuing husband’s partnership interest in rental-storage business, trial court could consider income capitalization or cost approach and adopt valuation that included non-controlling (minority) interest discount of 33% based on real estate appraiser’s ...
  • Patel v. Patel
    The appellate court finds that, performing the requisite intrinsic value review, the circuit court properly declined to include in its analysis any discounts the husband’s expert proposed to account for his fractional interest in companies owning hotels ...
  • Pearlstein v. Pearlstein
    Trial court finds medical practice valuation that includes goodwill more persuasive, when the firm had been in business more than 50 years and had three locations.
  • Peltzer v. Peltzer
    Appellate court rules doctor husband who knew his expert was the only appraiser of his practice cannot blame trial court for relying on expert’s unclear discount in valuation.
  • Persaud v. Goad
    Court affirms divorce valuations for mixed real estate and business assets; even if trial court erred in stating negative value for business that generated no income but carried high annual costs, the error was harmless where court reframed decision as one of fairness rather than finances.
  • Prevost v. Prevost
    Expert’s “market valuation assessment” to estimate sale price of husband’s two businesses satisfies principles for valuation of closely held company, says appeals court; case law looks to IRS Revenue Ruling 59-60, but disfavors use of book value.
  • Rabe v. Rabe (I)
    Divorce court discredits expert valuation for failure to independently verify information provided by the owner/husband.
  • Rabe v. Rabe (II)
    Appeals court affirms trial court’s valuation, which implicitly assigned goodwill to business, finding that since the company was not a professional practice it is likely that the company’s, rather than the owner spouse’s, reputation brings in business.
  • Ramundo v. Ramundo
    Appeals court upholds medical practice valuation despite gaps in expert analysis, including failure to analyze goodwill and exclude premarriage value portion of practice; expert’s job was “complicated” due to owner-spouse’s noncompliance with discovery.
  • Reedy-Huffman v. Huffman
    State high court affirms trial court’s determination that husband’s naturopathic practice had zero goodwill value based solely on husband’s testimony that a similar practice in the area failed to attract a buyer despite being on the market for a year.
  • Rhodes v. Rhodes
    Miss. appellate court confirms “bright line” rule that all goodwill, whether enterprise or personal, of a professional or retail firm, is excluded from the valuation of a business in divorce.
  • Rohling v. Rohling
    Appeals court rejects claim that expert’s value determination pursuant to a calculation engagement rather than a valuation engagement was unreliable; trial court properly considered limitations inherent in a calculation engagement when crediting expert’s value estimate, appeals court says.
  • Root v. Root
    The issue in this marital dissolution was the valuation of the wife's interest in Big Horn Basin Pathology, Inc.
  • Rozenman v. Rozenman
    Divorce court did not err by using asset value to value husband’s separate business at the start of the marriage, and market value to measure the business at the end; the court was also correct in adopting an industry rate of return rather than an implied ...
  • Russell v. Russell
    Court of Appeals rejects husband’s claim that trial court erred in valuing interest in family business based on wife’s expert’s computation, which deviated from industry standards and included discounts (DLOM, DLOC, personal goodwill) based on expert’s ag ...
  • Salumbides v. Salumbides
    Divorce court values medical practice based solely on accounts receivable, largely due to lack of evidence and cooperation from owner-spouse.
  • Sampson v. Sampson
    The issues in this marital dissolution were the valuation of wife’s insurance agency and the “double-dipping” that wife claimed was a result of the improper division of the property.
  • Schickner v. Schickner
    Appeals court says state law does not bar use of minority share discount in divorce cases and declines to impose a bright-line rule; rather, the trial court has to consider interest holder’s level of control and likelihood of sale before use of discount.
  • Settele v. Settele
    Appeals court rejects claim that accounts receivable used in asset-based business valuation by wife’s expert are analogous to future income stream for purposes of arguing double dip in light of income determination for spousal support award.
  • Sharp v. Sharp
    In using the capitalization of earnings method to value husband’s medical practice, the wife’s expert did not improperly include personal goodwill, the appellate court finds; the valuation rested on actual earnings with some adjustment for reasonable comp ...
  • Shewbart v. Shewbart (I)
    Trial court (divorce) commits reversible error by valuing only the hard assets of a restaurant and ignoring evidence of its substantial annual income and consistent profits.
  • Shewbart v. Shewbart (II)
    Court finds that 2x EBITDA multiple is not too low for restaurant valuation, due to 2008 economic downturn and long hours by husband, a solo proprietor.
  • Short v. Short
    Appraisal used in estate tax valuation, which included substantial discounts for lack of marketability and control, were inappropriate for use 10 years later in divorce.
  • Shuck v. Shuck
    Nebraska appellate court precludes discounts for embedded capital gains tax under the asset approach, confirms tax “adjustments” to the cash flows of a business under the income approach, and affirms that applications of minority and marketability discoun ...
  • Sieber v. Sieber
    Court affirms valuation of husband’s minority interest in business featuring zero DLOC where husband was key driving force behind business’s success and wielded influence and control; use of asset approach rendered double-dip theory inapplicable.
  • Singley v. Singley (I)
    The husband in this marital dissolution matter appealed the trial court's valuation of his dental practice, which included a goodwill component.
  • Singley v. Singley (II)
    Among the issues in this case of first impression was whether goodwill should be included in the fair market value of a sole proprietorship for purposes of equitable distribution.
  • Singley v. Singley (III)
    Court amends opinion in response to amicus curiae brief, but refuses to distinguish between personal and enterprise goodwill where evidence does not.
  • Slater v. Slater
    Oregon court adopts majority rule, finding it improper to predicate the value of a professional practice on a noncompete.
  • Slutsky v. Slutsky
    In a case about lawyer’s equity partner interest in a large firm, appellate court finds prior ruling was grossly deficient; expert testimony suggested the owner spouse’s compensation matched his earning capacity and there was no additional goodwill compon ...
  • Sommers v. Sommers
    Nancy Sommers appealed the judgment entered in a divorce action brought by Dennis Sommers. We conclude the trial court erred in valuing Dennis Sommers' orthodontic practice.
  • Spady v. Spady
    Appellate court holds that valuation date must bear a “rational relationship” to the assets being valued, and confirms no value for the auto dealership in this case, based on standard appraisal practice to round negative values to zero.
  • Sparks v. Sparks
    Appellate court upholds dated valuation husband’s expert performed of veterinary hospital two years prior to trial, where it informed proposed sale of minority interest in business to willing buyer and asset was not volatile; there is no “artificial cut-o ...
  • Starling v. Starling
    In divorce case, appellate court upholds classification of a family business as hybrid property, entitling the community to the increase in value that came about during the marriage; and, it validates the trial court’s decision to rest its valuation on th ...
  • Stemler v. Stemler
    Court invalidates antenuptial agreement for lack of adequate disclosure, including appraised values of husband’s assets ...
  • Stephanos v. Stephanos (In re Marriage of Stephanos)
    Trial court adopts goodwill value determination of wife’s expert (residual method) as well as expert’s finding that none of goodwill in family business is personal to owner spouse; business’s success was not dependent on owner’s continued presence or his execution of a noncompete, court says.
  • Stephens v. Stephens
    State Supreme Court adopts active appreciation rule, aligning itself with majority of jurisdiction that finds appreciation of nonmarital asset is marital property to the extent marital efforts caused it, i.e., the owner or nonowner spouse or both.
  • Sternat v. Sternat
    Appeals court says trial court’s decision to admit opinion of seasoned CPA expert who was not a credentialed business valuator was not error because valuation was a “non-issue” where evidence showed the indebted company was no longer a going concern.
  • Stewart v. Stewart
    Idaho declines to make the distinction between enterprise and personal goodwill in valuing a professional practice in divorce, holding all goodwill is marital property.
  • Stocker v. Stocker
    Trial court did not err in adopting income-based valuation offered by husband’s expert; appeals court calls husband’s attack on his own expert “counterintuitive” where expert explained the value of the company was in its cash flow rather than its assets.
  • Swaney v. Swaney
    North Carolina Court of Appeals affirms $30,000 goodwill value for closely held IT firm based on a multiple of earnings approach and assumption of a non-compete in a willing buyer/willing seller transaction.
  • Tate v. Tate
    Appeals court upholds valuation of minority interest in farm entities based on fair value standard of value; court notes prevailing expert specifically referenced buy-sell agreements that did not contemplate use of discounts in valuing exiting member’s partial interest.
  • Taylor v. Taylor
    North Carolina court of appeals affirms application of discount for lack of marketability to value of marital business (hospital pharmacy), as substantiated by the evidence.
  • Telfer v. Telfer
    In context of determining appreciation in value, appeals court says trial court did not err when it applied DLOM in valuing partial interests in businesses representing wife’s separate property; DLOM use is within trial court’s discretion and depends on facts of the case.
  • Trahan v. Trahan
    Divorce court finds the expert with more industry and company experience is the more credible, adopting his DCF with a 20% discount for lack of marketability.
  • Vedros v. Vedros
    Court says discounting for lack of marketability of minority interest in home healthcare agency, operating as an S corporation, is appropriate where LLC agreement included transfer restrictions and partners were not planning to buy out owner spouse.
  • Walsh v. Walsh
  • Ward v. Ward
    High court rejects valuation of husband’s interest in closely held company where wife’s expert transformed it from one owned by four people into one managed by one person to increase its overall value.
  • Waton v. Waton
    Husband failed to value the business before marriage in the context of an antenuptial agreement. The court held this did not void the agreement.
  • Watson v. Watson
    The issue in this case was the value of goodwill in husband's vet practice.
  • Weinberg v. Dickson-Weinberg
    Hawai’i court confirms majority rule regarding disposition of professional/enterprise goodwill and joins majority rule regarding valuation of contingency fee cases, with some adjustment.
  • Wiegers v. Richards-Wiegers
    Alaska high court finds trial court was not required to value husband’s shares in closely held company under the liquidation approach the company historically had used in buy-out situations; trial court’s “true asset” approach was based on credible expert testimony.
  • Wilson v. Wilson
    West Virginia Supreme Court finds that construction management fees, conditioned on completion of a project, are analogous to attorney contingency fee contracts and subject to same rules of equitable division.
  • Witt-Bahls v. Bahls
    Marital estate only has claim to increased value of stock from company for which owning spouse works if nonowning spouse can show owner’s active effort “to move the appreciation value from the nonmarital category to the marital one,” appeals court affirms ...
  • Wood v. Wood
    Appellate court rejects calculation of value of closely held business under buy-sell agreement that did use proper valuation date or standard of value (FMV).
  • Wright v. Wright
    Court considers the applicability of discounts to a minority shareholder’s interest in an S corp, and whether the company’s retained earnings may be properly attributable to a minority owner for child support determinations.
  • Wright v. Wright
    Trial court correctly applies 20% "attrition discount" to value of husband's accounting firm when there was credible, non-speculative evidence that the firm would lose customers in the future due to natural attrition.
  • Wright v. Wright
    Court of Appeals affirms use of excess earnings method to calculate business goodwill in husband’s law firm interest; no controlling authority exists to mandate that trial court limit its use to cases in which pertinent financial data is unavailable, cour ...
  • Yoon v. Yoon
    At issue is the valuation of husband's medical practice and the admittance of expert testimony.