Sullivan v. Loden
In this malpractice case against an estate attorney, the attorney was denied a summary judgment. The primary issue related to the attorney’s valuation of stock of a family business that was gifted to two of the four children of the decedent. While an “equalization payment” was made to each of the two remaining children, one of these two sued the attorney for both breach of fiduciary duty and for undervaluing the stock gifted, resulting in an underpaid equalization payment.
Estate Attorney Is Denied a Summary Judgment for Alleged Incorrect Valuation of Gifts of Stock—Malpractice Case Proceeds
In this malpractice case against an estate attorney, the attorney was denied a summary judgment. The primary issue related to the attorney’s valuation of stock of a family business that was gifted to two of the four children of the decedent. While an “equalization payment” was made to each of the two remaining children, one of these two sued the attorney for both breach of fiduciary duty and for undervaluing the stock gifted, resulting in an underpaid equalization payment.
A Lesson in Healthcare Supply and Demand—and Market Power, Part 1
This is a follow-up to 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 is 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 April 2022
A monthly roundup of key developments of interest to business valuation experts.
Appraisal Review for Financial Reporting
Appraisal reviews are increasing in importance and frequency. Available guidance on the appraisal review process is modest. Join Ray Rath to cover topics important to the process of performing an appraisal review as well as responding to inquiries from a reviewer of a valuation prepared for financial reporting. Ray Rath will focus on the review process and not a listing of common errors or overview of technical knowledge required to prepare or review an appraisal.
Snyder v. Snyder
In this Pennsylvania divorce matter, the appellate court accepted the wife’s valuation of the marital business using the “gross sales approach,” despite the husband’s objection that she was not qualified to determine the value. The trial court master recommended the wife’s value be accepted. However, the appellate court finds that the trial court double counted four business assets and remanded for a redetermination of the marital estate.
Court Affirms Acceptance of the Wife’s Gross Sales Valuation Method for the Marital Business, Remands for Double Counting of Business Assets
In this Pennsylvania divorce matter, the appellate court accepted the wife’s valuation of the marital business using the “gross sales approach,” despite the husband’s objection that she was not qualified to determine the value. The trial court master recommended the wife’s value be accepted. However, the appellate court finds that the trial court double counted four business assets and remanded for a redetermination of the marital estate.
Sproule v. Johnson
In this partnership dissolution case, the North Dakota Supreme Court affirmed the district court’s decision to use an appraisal of the Canadian entity as of 2019 instead of a value from an earlier agreement in principal. The later date was within the purview of the district court’s flexibility. Further, the Supreme Court affirmed the district court’s decision not to reduce the value of a partnership asset of stock in a Canadian corporation for taxes.
North Dakota Supreme Court Affirms Valuation Date, Affirms No Deduction for Taxes in Determining Stock Value
In this partnership dissolution case, the North Dakota Supreme Court affirmed the district court’s decision to use an appraisal of the Canadian entity as of 2019 instead of a value from an earlier agreement in principal. The later date was within the purview of the district court’s flexibility. Further, the Supreme Court affirmed the district court’s decision not to reduce the value of a partnership asset of stock in a Canadian corporation for taxes.
Whatever Happened to Specific Company Risk? Accounting for Management Risk in Private Partnerships
Multidisciplinary valuation projects set many traps for the unwary. Join Dennis Webb to learn about one such trap that affects virtually every asset holding company valuation because the real property appraiser and business valuer usually don’t know what the other needs. For specific company risk, such an omission can be quite a big deal.
TAF calls for papers on the ‘art of valuation’
The Appraisal Foundation (TAF) has issued a call for qualified candidates to submit proposals for papers that will go into a book on the art of doing business valuation.
ESOP companies more optimistic about recovering
Valuation experts assessing how a subject company will recover from the pandemic will be interested in a new study.
Two cases on trapped-in gains tax—with opposite outcomes
In a California divorce case we recently covered, an appeals court disallowed a discount for possible future taxes because the taxes were neither immediate nor specific.
Valuation standards needed for digital assets
“An agreed-upon reliable valuation method does not exist for cryptocurrencies in 2022,” say the authors of a new paper, “Digital Asset Valuation.”
Weaver reviews healthcare valuation in 2021
A collection of articles by valuation practitioners at Weaver give a 2021 year in review for healthcare valuations.
BV News and Trends February 2022
A monthly roundup of key developments of interest to business valuation experts.
TAF seeks candidates for its board of trustees
The Appraisal Foundation (TAF) is searching for candidates to serve on its board of trustees.
New book on valuing fractional interests
For almost 25 years, valuing fractional interests involving real estate has been the specialty of Dennis A. Webb (Primus Valuations).
BVLaw Review: The Top Valuation Cases of 2021
Here is our pick for the state and federal court decisions that enhanced our understanding of valuation issues as they arose in a litigation setting during 2021.
BV News and Trends January 2021
A monthly roundup of key developments of interest to business valuation experts.
Appeals court OKs one discount, KOs another in divorce matter
In a California divorce matter, the husband’s expert applied two discounts to the valuation of the wife’s one-half interest in his business: one discount for possible future taxes and one for a discount for lack of marketability (DLOM).
Bohac v. Benes Serv. Co.
The Nebraska District Court in this case applied discounts to its determination of fair value (FV). The Supreme Court found that the district court did not use the correct definition of fair value, resulting in discounts being applied to the estate’s shares. The Supreme Court also found that the proper premise of value was going concern and the proper methodology for value was the asset approach. The Supreme Court also allowed as a liability the deferred tax on potential future sale of assets by the corporation.
The Nebraska District Court Is Reversed in Its Determination of Fair Value
The Nebraska District Court in this case applied discounts to its determination of fair value (FV). The Supreme Court found that the district court did not use the correct definition of fair value, resulting in discounts being applied to the estate’s shares. The Supreme Court also found that the proper premise of value was going concern and the proper methodology for value was the asset approach. The Supreme Court also allowed as a liability the deferred tax on potential future sale of assets by the corporation.
Survey shows the graying of the appraisal profession
Two-thirds of appraisers in the U.S. are age 55 and older, according to a survey The Appraisal Foundation (TAF) and the Appraisal Institute (AI) conducted.
Imaging centers: If you’ve seen one, you haven’t seen them all
If you value the local hardware store, the next one you value is likely to look pretty much the same.