One aspect that has valuators excited about the Kress v. United States gift tax case is that the federal court that ruled on the taxpayers’ challenge to the IRS’s gift tax assessment accepted valuations from both parties’ experts that applied a C corporation tax rate to value minority shares in an S corporation.
A protracted Minnesota buyout dispute involving the heirs to a local grocery store empire, Lunds & Byerlys, may have reached the end following a recent ruling from the state appeals court. The reviewing court upheld the trial court’s decision to grant the minority shareholder’s request for a buyout as well as the court's fair value determination.
The DOL’s aggressive oversight strategy concerning ESOPs has led to a number of controversial lawsuits, including, most recently, the Acosta v. Vinoskey case, which, in the past few months, went to trial over the DOL's overpayment claim.
In 2016, the U.S. Tax Court found for the Internal Revenue Service in a dispute over a series of exchanges that Exelon, the tax payer, designated as section 1031 transactions. The court found these were not like-kind exchanges and expressed dismay over the appraisals the tax payer offered to support its claim for significant deductions.
The parties’ dispute over how to classify earnout payments related to the sale of a valuable marital asset recently prompted a split ruling from the Minnesota Supreme Court. The issue was whether those payments were part of the sales consideration, as the wife argued, or represented future compensation to the husband, as the district court found.
If more proof is necessary to show that courts across all legal fields dive deep into the details of valuation testimony, a recent damages case that arose in the context of a condemnation proceeding should do the trick.
A decision from the Supreme Court recently led New Jersey to adopt key Daubert factors for determining the admissibility of expert testimony, but the high court’s ruling also expresses a reluctance to fully embrace the Daubert standard.
BVR is very sad to note that the eminent David Laro, a senior judge of the United States Tax Court, passed away on September 21. Valuators in particular looked up to Judge Laro for his unique understanding of the field of valuation and the role it plays in many tax cases.
There is a split in the valuation community as to the merit of calculation engagements. As we recently reported, some valuators are adamantly opposed to doing them, whereas other appraisers believe that calculation engagements have a rightful place in their tool kit.
For the longest time, Tennessee case law required trial courts presiding over dissenting shareholder actions to determine fair value by using the Delaware block method. In a recent ruling, the Tennessee Supreme Court struck down the requirement and Tennessee has joined the jurisdictions that allow "more modern" valuation approaches.
In the ongoing Brundle v. Wilmington Trust ESOP saga, which is now in the appeals stage, the Department of Labor recently filed an amicus brief in support of the district court’s $29.8 million judgment against the ESOP trustee. The case arose out of a plan participant’s claim that the ESOP trustee breached its fiduciary duties to the plan by causing the ESOP to pay more than fair market value for the employer’s stock.
One of the most controversial ESOP cases, Brundle v. Wilmington Trust, has now entered the appeals court phase. In 2017, the district court found that the trustee had caused the plan to overpay by $29.8 million by failing to scrutinize the financial advisor’s obviously flawed valuation analysis and value conclusions. The trustee and valuator had strong ESOP credentials.
After the petitioners in a statutory appraisal action recently lost big, they undertook a multifaceted assault on the Delaware Court of Chancery’s decision to use the unaffected market price as the indicator of value. Their motion for reargument went nowhere.
Arkansas is one of the many states that differentiate between enterprise goodwill and personal goodwill. The former is marital property and divisible at divorce; the latter is not. A question that has come up in recent years is whether the owner of a nonprofessional business can claim personal goodwill whose value is excludable from the marital estate.
Case law matters. Every month, BVLaw analyzes the most noteworthy court decisions dealing with valuation and damages issues. Subscribers should check out digests of three recent divorce rulings different state courts issued. All the cases dealt with the issue of whether it was appropriate to discount the owner-spouse’s interest in a closely held business.
In a developing ESOP case, the government recently suffered a setback when the court agreed with the trustee that portions of the damages testimony the government’s expert proposed failed to hold up under the Daubert reliability prong.
A recent Tennessee appeals court decision found that the trial court presiding over a drawn-out divorce had discretion to apply a marketability discount when it valued the owner-spouse’s interest in two companies in 2016.
Recent rulings from the Delaware Supreme Court make it seem as if the discounted cash flow analysis has lost its top ranking among valuation methodologies in statutory appraisals involving publicly traded companies. Not exactly.
The Delaware Court of Chancery recently had an opportunity to put into practice the directives the state’s high court had issued in DFC Global and Dell in terms of calculating fair value in a statutory appraisal proceeding.
The overarching issue in a recent Michigan divorce case was appreciation. Did the nonowner spouse (wife) have a right to a portion of the increase in value of her husband’s separate property, an S corporation? A related issue, and one that posed a question of first impression in Michigan, was how to treat the company’s retained earnings.
It’s written in stone that experts developing a reasonable royalty for a multicomponent product must be careful to apportion damages to the product’s protected features. However, there is flexibility in how experts perform the apportionment, the Federal Circuit recently confirmed.
The United States Supreme Court has agreed to review a patent infringement case on the scope of damages. The issue is whether a patent holder may obtain lost profits for actions that occurred outside the United States, where the patentee has proven a domestic act of infringement.
Every month, BVLaw analyzes and digests federal and state court decisions (including opinions from the United States Tax Court) that focus on valuation and damages issues and feature expert testimony. A BVLaw subscription is an efficient way for financial experts to keep up with developments in their areas of expertise and with the various courts’ takes on valuation methodology, Daubert and the art of presentation, and policy concerns.
Twice, in 2017, the Delaware Supreme Court struck down statutory appraisal rulings by the Delaware Court of Chancery that dismissed the importance of the market price.
Causation presents one of the most vexing problems for damages experts. But ignoring causation and simply working off the assumption that it exists may end up being the biggest problem for an expert.