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.
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.
Valuation Confirms Salability of ‘Unique’ Restaurant’s Goodwill
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.
For DLOM, Court Looks to Signs of Sale of Practice
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.
Court Affirms ‘Market Valuation Assessment’ of Family Businesses
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.
Marshall v. Marshall (I)
Appeals court says parties’ agreement is ambiguous as to whether distributions related to husband’s ownership in S corp. are includable in alimony and child support calculation; on remand, trial court must determine what income parties meant when specifying use of pretax income from employment.
Courts Agree Reasonable Compensation Is Sound Method for Calculating Spousal Support in S Corp Context
Appeals court says parties’ agreement is ambiguous as to whether distributions related to husband’s ownership in S corp. are includable in alimony and child support calculation; on remand, trial court must determine what income parties meant when specifying use of pretax income from employment.
Courts Decry Expert’s Failure to Explore Different Ways to Develop FMV
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.
Court Pans Valuation Based on Expert’s Fiction, Not Fact
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.
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.
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.”
Court Proscribes Litigant’s Efforts to Foil Expert’s Valuation
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”
Court Questions Idea of Goodwill in Solo Practice Valuation
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.
Appeals Court Tiptoes Around Tax Affecting in Divorce Setting
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 ...
Murky Goodwill Testimony Makes Partner Agreement Best Indicator of Value
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 ...
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.
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.
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.
Dated Valuation Not Per Se Unreliable Indicator of FMV
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 ...
Court Likens ‘Book of Business’ to Professional Goodwill
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 ...
Should Dated Buyout Set Value of Stock in Closely Held Corporation?
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 ...
In re Marriage of Valente
Appeals court says awarding wife a portion of business and a maintenance award is not double recovery (double dipping) where husband’s reasonable replacement compensation “was carved out of the income streams used for the valuation.”