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Tax rate slipup in dental practice valuation

In a North Dakota divorce case, both sides had expert valuations done on the husband’s dental practice.

Top Issues Impacting Cannabis Valuations

An apple is an apple. A pear is a pear. A dispensary in MyTown USA is not the same as a dispensary in NextDoor USA. A cultivation facility in Michigan is not the same as a cultivation facility in Illinois. This webinar will focus on adult use legalization, Section 280E, geography, research and resources and other important issues impacting valuations in the cannabis space.

Kemmett v. Kemmett

The North Dakota Supreme Court reviewed several issues regarding the district court’s valuation of and distribution of the marital estate, including the determination of the value of the husband’s dental practice. The district court accepted the higher value of the wife’s expert’s value of the dental practice, noting that the wife’s witness was more credible than the husband’s witness.

North Dakota Supreme Court Affirms Choice of Wife’s Expert’s Value of Dental Practice

The North Dakota Supreme Court reviewed several issues regarding the district court’s valuation of and distribution of the marital estate, including the determination of the value of the husband’s dental practice. The district court accepted the higher value of the wife’s expert’s value of the dental practice, noting that the wife’s witness was more credible than the husband’s witness.

Two Ways to Treat the Vanishing Bonus Depreciation Tax Break

Michelle Gallagher and Nathan Olberding (both with Adamy Valuation) present a nice example of how to consider the sunsetting of the bonus depreciation rules in a valuation. The rules were enacted by the Tax Cuts and Jobs Act (TCJA).

Business tax break extensions stalled

At the time of this writing, the tax extenders legislation is still tied up in the Senate.

Valuing What You Cannot See: Intangible Assets

Accounting has historically done a poor job dealing with intangible assets, and, as the economy has transitioned away from a manufacturing-dominated 20th century to the technology- and services-focused economy of the 21st century, that failure has become more apparent. The resulting debate among accountants about how to bring intangibles onto the books has spilled over into valuation practice, and many appraisers and analysts are wrong, in my view, letting the accounting debate affect how they ...

Key Points From the VSCPA Forensic and Valuation Conference

An economic update, a new IRS crackdown, goodwill, reasonable comp, healthcare insights, expert testimony, and options are among the topics recapped from the annual two-day Forensic and Valuation Conference hosted by the Virginia State Society of CPAs.

BV News and Trends October 2023

A monthly roundup of key developments of interest to business valuation experts.

Untangling Assets and Uncovering the Truth: A Deep Dive into Divorce Financial Forensics

This webinar transcript provides a discussion of methodologies, tools, and techniques needed to untangle complex financials in the context of divorce proceedings ...

Points to know from the VSCPA conference

The annual two-day Forensic and Valuation Conference hosted by the Virginia State Society of CPAs is one event we never miss.

JBrick, LLC v. Chazak Kinder, Inc.

The defendants challenged the testimony of the plaintiff’s damages expert, and the plaintiff challenged the testimony of the defendants’ damages rebuttal expert. The case involved a Lego interpretation model of the Second Beit Hamikdash, or Second Holy Temple, and an alleged infringement of the copyright on this model. The court struck the plaintiff’s expert’s damages of a product related to the Temple Product but allowed testimony of damages on the Temple Product. The court also struck the plaintiff’s expert’s testimony that the plaintiff should be awarded lost profits on the Temple Product plus a disgorgement of the defendants’ profits. Both may not be awarded. The court also struck portions of the defendants’ rebuttal testimony and report.

Daubert Challenges on Experts on Damages Partially Successful

The defendants challenged the testimony of the plaintiff’s damages expert, and the plaintiff challenged the testimony of the defendants’ damages rebuttal expert. The case involved a Lego interpretation model of the Second Beit Hamikdash, or Second Holy Temple, and an alleged infringement of the copyright on this model. The court struck the plaintiff’s expert’s damages of a product related to the Temple Product but allowed testimony of damages on the Temple Product. The court also struck the plaintiff’s expert’s testimony that the plaintiff should be awarded lost profits on the Temple Product plus a disgorgement of the defendants’ profits. Both may not be awarded. The court also struck portions of the defendants’ rebuttal testimony and report.

Next week: VSCPA Forensic and Valuation Conference

BVWire will be at the Forensic and Valuation Conference held by the Virginia Society of CPAs (VSCPA) September 26-27 in Glen Allen.

Internal billings trigger M&A damages; GPCM prevails

A case in Delaware Chancery Court shows that the court will not award damages from an M&A transaction gone bad when the calculations are based on speculative lost synergies.

Wong v. Wong

The defendants and plaintiffs were all family members who co-owned seven apartment buildings that the defendants managed. The defendants embezzled profits from the buildings for at least a decade. On appeal, the defendants conceded plaintiffs were entitled to an award of both compensatory and punitive damages based on their wrongdoing, but they challenged the amount of the awards. The appellate court agreed that the punitive damages were excessive as a matter of law and adjusted them. All other defendants’ contentions were rejected, and the trial court was affirmed in those matters.

California Appeals Court Reduces Punitive Damages as Being Excessive

The defendants and plaintiffs were all family members who co-owned seven apartment buildings that the defendants managed. The defendants embezzled profits from the buildings for at least a decade. On appeal, the defendants conceded plaintiffs were entitled to an award of both compensatory and punitive damages based on their wrongdoing, but they challenged the amount of the awards. The appellate court agreed that the punitive damages were excessive as a matter of law and adjusted them. All other defendants’ contentions were rejected, and the trial court was affirmed in those matters.

Panel on trial testimony featured at VSCPA

How to survive expert testimony and cross-examination is one of the most popular topics at the annual two-day Forensic and Valuation Conference held by the Virginia Society of CPAs (VSCPA).

Agenda available for VSCPA conference September 26-27

BVWire never misses the annual two-day conference held by the Virginia Society of CPAs (VSCPA).

Low buyback value stings departing owners

Shareholder-employees should take a lesson from a recent case and take a fresh look at their buyout agreements—especially the part about the redemption value.

NetApp, Inc. v. Cinelli

The defendant hid improper recording of revenue from use of internal software in unaudited financial statements that were represented to be GAAP-compliant. The defendant was held to have breached the merger/sale contract in a manner that resulted in fraud. The plaintiff was awarded damages. The court accepted the expert’s GPCM as the most “responsible estimate” of the private company’s value as it was presented to the plaintiff.

Seller Breached Terms of Merger Agreement Including That Statements Were GAAP-Compliant—Expert’s GPCM Accepted

The defendant hid improper recording of revenue from use of internal software in unaudited financial statements that were represented to be GAAP-compliant. The defendant was held to have breached the merger/sale contract in a manner that resulted in fraud. The plaintiff was awarded damages. The court accepted the expert’s GPCM as the most “responsible estimate” of the private company’s value as it was presented to the plaintiff.

Use of Forensic Evidence in a Lost Profits Case

Financial forensics experts are often called upon to measure the lost profits a business suffered as a result of the actions of another party. The measurement typically compares the profits of the company had the defendant not acted inappropriately to the profits that the company actually realized. Because lost profits measurement involves the calculation of the value of something that should have happened but did not, the process must incorporate assumptions and significant reliance upon ...

Laurilliard v. McNamee Lochner, P.C.

The plaintiffs, minority shareholder employees in a law firm, brought suit against their firm for breaching their employment contracts. The court determined that the plaintiffs were at-will employees and that there was no breach of their agreements when they were terminated. The court also determined that the under-market-value payment under their repurchase agreements was allowable since they were at-will employees.

New York Court Allows Enforcement of Under-Market-Value Buy-Sell and Approves At-Will Termination of Shareholder-Employees

The plaintiffs, minority shareholder employees in a law firm, brought suit against their firm for breaching their employment contracts. The court determined that the plaintiffs were at-will employees and that there was no breach of their agreements when they were terminated. The court also determined that the under-market-value payment under their repurchase agreements was allowable since they were at-will employees.

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