Insurance Agencies/Brokerages
This industry comprises establishments primarily engaged in acting as agents (i.e., brokers) in selling annuities and insurance policies.
Thomasee v. Thomasee
The Louisiana appellate court affirmed the decision of the trial court in a divorce case that included the value of the husband’s business in the marital estate as community property. The husband argued that the FEMA adjuster business was a professional business and that the profits were all goodwill and, therefore, not included in the estate. The wife argued that the business was not a professional business and had value other than just the personal goodwill of the husband. The value was includable as community property, and any subsequent income was half hers. The trial court sided with the wife, and the appeals court affirmed.
Louisiana Appeals Court Affirms Husband’s Business Is Not a Professional Business and Has Value Other Than Personal Goodwill
The Louisiana appellate court affirmed the decision of the trial court in a divorce case that included the value of the husband’s business in the marital estate as community property. The husband argued that the FEMA adjuster business was a professional business and that the profits were all goodwill and, therefore, not included in the estate. The wife argued that the business was not a professional business and had value other than just the personal goodwill of the husband. The value was includable as community property, and any subsequent income was half hers. The trial court sided with the wife, and the appeals court affirmed.
King v. King
This divorce case appeal deals with three primary issues: the determination of the value of insurance agency marital asset, the determination of the amount of personal goodwill attaching to the insurance agency, and the appropriate amount of alimony. The court remands the value of the business as it relates to the exclusion by the trial court of the liabilities the business owed, remands as to the appropriate amount of personal goodwill, and remands as to the erroneous level of income of the husband for determination of alimony.
Florida Trial Court’s Valuation Findings, Including Personal Goodwill Determination, Do Not Hold Up Under Appeals Court Scrutiny
This divorce case appeal deals with three primary issues: the determination of the value of insurance agency marital asset, the determination of the amount of personal goodwill attaching to the insurance agency, and the appropriate amount of alimony. The court remands the value of the business as it relates to the exclusion by the trial court of the liabilities the business owed, remands as to the appropriate amount of personal goodwill, and remands as to the erroneous level of income of the husband for determination of alimony.
Stowe v. Stowe
In divorce case, appeals court overturns trial court’s valuation for an independent insurance agency; the trial court, without analysis, accepted there was goodwill and adopted expert’s calculation of goodwill using multiple “derived from a non-analogous source applying un-adjusted factors.”
Expert’s Goodwill Calculation Based on Rule of Thumb Sinks Under Appellate Scrutiny
In divorce case, appeals court overturns trial court’s valuation for an independent insurance agency; the trial court, without analysis, accepted there was goodwill and adopted expert’s calculation of goodwill using multiple “derived from a non-analogous source applying un-adjusted factors.”
Trial Court’s Stock Valuation Contravenes Agreement’s Buyout Provisions
In shareholder dispute over minority owner’s stock buyout, appeals court finds trial court’s sole reliance on five-year-old valuation and its rejection of appraiser’s recent valuation violates parties’ shareholder agreement and requires revaluation.
R. Kashmiry & Assocs. v. Ellis
In shareholder dispute over minority owner’s stock buyout, appeals court finds trial court’s sole reliance on five-year-old valuation and its rejection of appraiser’s recent valuation violates parties’ shareholder agreement and requires revaluation.
Solvency Determination Turns on Income Recognition Analysis
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
Solvency Determination Turns on Income Recognition Analysis
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
Redmond v. NCMIC Fin. Corp. (In re Brooke Corp.)
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
Expert’s Failure to Adhere to Objective Standard Spoils Analysis
Court excludes lost profits analysis under Daubert where expert calculates value of plaintiff’s book of business without documenting comparables, verifying plaintiff’s claims as to number of lost clients, and employing objective work-life expectancy data.
Russell v. Allianze Life Ins. Co. of N.A.
Court excludes lost profits analysis under Daubert where expert calculates value of plaintiff’s book of business without documenting comparables, verifying plaintiff’s claims as to number of lost clients, and employing objective work-life expectancy data.
Court Rejects Expert’s ‘Irrelevant’ Theory of Damages
Fifth Circuit vacates lost profits award because expert’s calculation was based on all clients who left plaintiffs after the defendants’ breach of non-compete agreements, rather than those who followed the defendants to their new place of employment; the ...
Gallagher & Co. v. Babcock
Fifth Circuit vacates lost profits award because expert’s calculation was based on all clients who left plaintiffs after the defendants’ breach of non-compete agreements, rather than those who followed the defendants to their new place of employment; the ...
NY Statutory Fair Value Includes Discounts Only for Less Than 50% Interest
New York court determines statutory fair value and buy-out price for insurance agency based on credible expert valuation, but excluding any marketability discount for a 50% interest.
In the Matter of Zulkofske
: New York court determines statutory fair value and buy-out price for insurance agency based on credible expert valuation, but excluding any marketability discount for a 50% interest.
It’s Critical to Apply Correct Measure of Lost Business Value
District court reverses $3.5 million award for lost business value due to expert’s use of incorrect measure of damages (income approach), and because owner’s attempt to cure by testifying as to market value was unfair surprise and speculative.
Fidelity Warranty Services, Inc. v. Firstate Insurance Holdings, Inc.
District court reverses $3.5 million award for lost business value due to expert’s use of incorrect measure of damages (income approach), and because owner’s attempt to cure by testifying as to market value was unfair surprise and speculative.
Pennsylvania Requires Divorce Courts to Consider Tax Affecting a Business
Pennsylvania statute requires family courts to consider tax and other cost ramifications associated with each asset to be divided in divorce.
Balicki v. Balicki
Pennsylvania statute requires family courts to consider tax and other cost ramifications associated with each asset to be divided in divorce.
Textbook Case of Proving Lost Future Profits Based on Past Finances of the Business
Court confirms expert lost profit damages of $21.1 million based on careful calculation of earnout payments under breached sale and employment agreement.
In re Texans CUSO Insurance Group
Court confirms expert lost profit damages of $21.1 million based on careful calculation of earnout payments under breached sale and employment agreement.
Expert’s Independence and Objectivity at Stake
Divorce court finds husband’s expert lacks independence and credibility when ignoring a contract in insurance company valuation.
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