Logue v. Logue
In this marital dissolution case in North Carolina, the appellate court affirmed the trial court’s determination of value of the wife’s dental practice. The trial court determined the value based on the value of the entire practice determined several years before the separation date. That value was determined by appraisals by professional appraisers to determine the buyout of the husband’s father’s 50% interest in the practice. No evidence of value as of the separation date was provided by the parties who decided not to hire appraisers to assess the value at the separation date.
North Carolina Appellate Court Values a Dental Practice Based on a Two-Year-Old Purchase of an Interest in the Practice
In this marital dissolution case in North Carolina, the appellate court affirmed the trial court’s determination of value of the wife’s dental practice. The trial court determined the value based on the value of the entire practice determined several years before the separation date. That value was determined by appraisals by professional appraisers to determine the buyout of the husband’s father’s 50% interest in the practice. No evidence of value as of the separation date was provided by the parties who decided not to hire appraisers to assess the value at the separation date.
Valuing Cannabis 2.0: Buckle Up, This is About to Get Interesting
The session will explore recent trends in valuing businesses and intellectual property in the cannabis industry. Appraisers often apply market-based metrics to historical data when performing traditional valuations. In the cannabis industry, history is not often indicative of the future and reliance on historical data may lead to inaccurate valuations. The value of businesses in established markets such as Colorado, Oregon, and Washington is different than the value of businesses in newly legal states or ...
Future editions of USPAP will have no end date
The current edition of the Uniform Standards of Professional Appraisal Practice (USPAP) will be extended by one additional year, according to an announcement from The Appraisal Foundation’s Appraisal Standards Board (ASB).
New valuation credential planned for healthcare compensation
During a recent BVR webinar, Tim Smith (TS Healthcare Consulting LLC) told the audience that a new credential is in the works for valuing the compensation of healthcare providers (physicians, physician assistants, and nurse practitioners).
Third exposure draft of USPAP released
During a recent BVR webinar that gave an update on valuation standards and guidance, Jim Alerding (Alerding Consulting) noted that a third exposure draft of USPAP was issued July 26 (available if you click here).
The Appraisal Foundation issues 2021 annual report
The following are a few items of particular interest to business valuers in The Appraisal Foundation’s annual report for 2021.
Healthcare whistleblower case regarding FMV can proceed
The CFO of a healthcare provider blew the whistle on his former employer, alleging it overpaid for a surgery center in order to induce it to refer future business.
Preorders open for unique guide to FMV under the new Stark regs
No other work can compare to a new guide to the new definitions of fair market value (FMV) under the recently updated regulations for the federal physician self-referral law—the Stark law.
Estate attorney sued over alleged undervaluation
The matriarch of a family business in Hawaii had four children, two of which were involved in the business.
Something from Nothing? Valuing Synergies in Acquisitions and Litigation
Acquisitions (and the prices paid for them) are often rationalized on the basis that the combined enterprise will be more valuable than the two businesses were separately. For both the business appraiser tasked with quantifying the potential synergy value in a business combination and the management team tasked with achieving those synergies, verifying and quantifying this potential value creates a unique set of challenges. In Something From Nothing? Valuing Synergies in Acquisitions and Litigation, expert ...
In re GGP, Inc. Stockholder Litig.
Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield paid a sizable preclosing dividend followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.
The Delaware Chancery Court Erred in Dismissing Claims Regarding Appraisal Rights Disclosures in a Merger—Supreme Court Remands
Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield funded a sizable preclosing dividend which was paid by GGP to eligible shareholders, followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.
No discounts in New Jersey shareholder buyout case
New Jersey is one of several states that allow discounts for lack of control and marketability in fair value situations if it is proven that the discounts are fair and equitable, but, in a recent case, the trial court disallowed the discounts—and an appellate court agreed.
BV News and Trends June 2022
A monthly roundup of key developments of interest to business valuation experts.
Date change for webinar on new Stark FMV regs
Part 1 of a two-part BVR webinar series on the new Stark FMV regs, originally scheduled for June 28, will be held on July 26.
ESOP valuations may be at a turning point
At last week’s inaugural ESOP Virtual Conference hosted by the American Society of Appraisers, the landmark Bowers case was discussed, which could represent a turning point for ESOP valuations.
No deduction for tax in shareholder buyout
In a North Dakota partnership dissolution case, the defendants argued on appeal that the district court erred in its valuation.
A Lesson in Healthcare Supply and Demand—and Market Power, Part 2
This is Part 2 of a two-part article that follows up on the author’s landmark research on the fair market value of physician compensation. The issue of insurance market structure and the related impact on the negotiating of provider contracts was addressed in Part 1 of this article. Physician distribution and the impact of local payment rates that determine compensation is addressed in Part 2.
BV News and Trends May 2022
A monthly roundup of key developments of interest to business valuation experts.
Comments due tomorrow on TAF exposure draft
Comments on the exposure draft, Understanding the Differences: Conclusion of Value v. Value Calculations, are due May 26.
Robertson v. Hyde Park
This case was a partnership dispute where the defendant partners tried to buy out the plaintiff partners. On appeal before the New Jersey Superior Court Appellate Division, the defendants argued that the plaintiffs’ dissociation was wrongful and damages should be assessed, discounts for lack of control and marketability should be applied to the value, and the partnership value should be reduced to account for partnership outstanding debts and other amounts. The plaintiffs argued that the trial court erred by relying on the defendants’ expert’s report and not their expert’s report, refusing to increase the value by personal loans taken by the defendant partners, and failing to find that the partnership overpaid management and accounting fees. The appellate court affirmed the trial court with one exception, whether the partnership agreement disassociated properly. On that count, the appellate court determined that the disassociation was appropriate.
New Jersey Appellate Court Affirms Valuation of Shopping Mall, Disallows Any Control or Marketability Discounts, Affirms Proper Dissociation by Plaintiffs
This case was a partnership dispute where the defendant partners tried to buy out the plaintiff partners. On appeal before the New Jersey Superior Court Appellate Division, the defendants argued that the plaintiffs’ dissociation was wrongful and damages should be assessed, discounts for lack of control and marketability should be applied to the value, and the partnership value should be reduced to account for partnership outstanding debts and other amounts. The plaintiffs argued that the trial court erred by relying on the defendants’ expert’s report and not their expert’s report, refusing to increase the value by personal loans taken by the defendant partners, and failing to find that the partnership overpaid management and accounting fees. The appellate court affirmed the trial court with one exception, whether the partnership agreement disassociated properly. On that count, the appellate court determined that the disassociation was appropriate.
Reminder: Comments due on TAF exposure draft
Comments on the exposure draft, “Understanding the Differences: Conclusion of Value v. Value Calculations,” are due May 26.
TAF issues exposure draft regarding conclusion of value vs. value calculations
In the first in a series of valuation briefs, The Appraisal Foundation (TAF) has published an exposure draft, “Understanding the Differences: Conclusion of Value v. Value Calculations.”