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Bates v. Bates

In appreciation case, appeals court says it was error to value owner’s separate, minority interest in car dealership based on buy-sell agreement; however, alternate valuation by nonowner spouse’s expert offered based on standard methods, including use of discounts, provided “appropriate valuation.”

Buy-Sell Stock Agreement Does Not Determine Value of Owner Spouse’s Separate Property

In appreciation case, appeals court says it was error to value owner’s separate, minority interest in car dealership based on buy-sell agreement; however, alternate valuation by nonowner spouse’s expert offered based on standard methods, including use of discounts, provided “appropriate valuation.”

Papin v. Papin

High court upholds classification and valuation of husband’s investment management business, noting business consists of book of business, which can exist without owner, and owner’s skills and expertise, which are his separate property; proceeds from sale of book of business are community property.

Trajectory of Owner’s Investment Management Business Raises Characterization and Valuation Issues

A complex divorce case in front of the Idaho Supreme Court featuring an investment management business that the husband had set up before and sold during the marriage raised noteworthy issues about the nature of the business and the characterization and valuation of its various components (book of business vs. owner’s skills). A related flashpoint was whether the nonowner spouse was entitled to any appreciation (enhancement) in the value of the business that occurred ...

Court Remands for Determination of Separate Asset’s Premarital Value

Appellate court affirms that increase in value of husband’s company is subject to equitable distribution but says trial court erred when it assumed company had zero value on the date of marriage because company then was not profitable; court remands for determination of company’s premarital value.

Appreciation in Liquor Company’s Value Represents Marital Property, Appeals Court Finds

Appeals court upholds ruling that appreciation in value of husband’s interest in family liquor business is marital asset; trial court carefully analyzed husband’s role in company to find he “substantially contributed” to the increase and husband stipulated to wife’s substantial contribution.

Fox v. Fox

Appellate court affirms that increase in value of husband’s company is subject to equitable distribution but says trial court erred when it assumed company had zero value on the date of marriage because company then was not profitable; court remands for determination of company’s premarital value.

Lucchesi v. Lucchesi

Appeals court upholds ruling that appreciation in value of husband’s interest in family liquor business is marital asset; trial court carefully analyzed husband’s role in company to find he “substantially contributed” to the increase and husband stipulated to wife’s substantial contribution.

Court Looks to Owner’s ‘Proportionate’ Share in Business to Quantify Appreciation in Value

In quantifying marital portion of appreciation of owner spouse’s separate property, trial court relies on owner’s “proportionate” share in company but also considers expert testimony as to third parties’ efforts and owner’s role in generating revenue; court rejects passive factor analysis.

Herbert v. Joubert

In quantifying marital portion of appreciation of owner spouse’s separate property, trial court relies on owner’s “proportionate” share in company but also considers expert testimony as to third parties’ efforts and owner’s role in generating revenue; court rejects passive factor analysis.

Using Jensen’s Alpha to Separate Active and Passive Appreciation

The author presents an alternate approach (Jensen’s alpha) to segregating passive from active increases in the value of a marital asset. An example is presented of an automobile dealer.

Court Rejects Appreciation in Value Calculation, Citing SSVS Violations

In appreciation in value case, court excludes nonowner spouse’s valuation testimony under Daubert, finding expert’s calculation of “minimum marital component” is not a methodology approved under the applicable SSVS for determining fair market value and also violated other SSVS requirements.

Hebert v. Cote

In appreciation in value case, court excludes nonowner spouse’s valuation testimony under Daubert, finding expert’s calculation of “minimum marital component” is not a methodology approved under the applicable SSVS for determining fair market value and also violated other SSVS requirements.

Letter to the Editor: Response to Article on Separating Active and Passive Appreciation in the Value of a Marital Asset

The author says there are flaws in Dr. Ashok Abbott’s approach to segregating passive from active increases in the value of a marital asset—and he presents an alternate approach.

Tenn. Appeals Court says DLOM in divorce appropriate under facts of case

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.

Tennessee appeals court allows slight DLOM in divorce case

Valuators working on divorce cases in Tennessee know that the jurisprudence on the use of the marketability discount has been nebulous.

Deal Price Represents Unreliable Starting Point for Fair Value Calculation

Appeals court agrees with trial court that deal price does not reflect target’s fair value because price resulting from merger of medical entities compensated shareholders for agreeing to substantial future pay reduction and for making other concessions.

Crocker v. Greater Colo. Anesthesia

Appeals court agrees with trial court that deal price does not reflect target’s fair value because price resulting from merger of medical entities compensated shareholders for agreeing to substantial future pay reduction and for making other concessions.

Michigan court explains treatment of S corp’s retained earnings in divorce

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.

Telfer v. Telfer

In context of determining appreciation in value, appeals court says trial court did not err when it applied DLOM in valuing partial interests in businesses representing wife’s separate property; DLOM use is within trial court’s discretion and depends on facts of the case.

Tennessee Appeals Court Defers to Trial Court on DLOM Use in Divorce

In context of determining appreciation in value, appeals court says trial court did not err when it applied DLOM in valuing partial interests in businesses representing wife’s separate property; DLOM use is within trial court’s discretion and depends on facts of the case.

Michigan Court Explains How to Handle Retained Earnings in Divorce Cases

In deciding whether, in divorce, retained earnings in a closely held company that is separate property are includible in marital estate, appeals court creates presumption against inclusion and requires trial court to perform totality of circumstances review.

Jensen v. Jensen

In deciding whether, in divorce, retained earnings in a closely held company that is separate property are includible in marital estate, appeals court creates presumption against inclusion and requires trial court to perform totality of circumstances review.

Nebraska Supreme Court Adopts Majority View on Appreciation

State Supreme Court adopts active appreciation rule, aligning itself with majority of jurisdiction that finds appreciation of nonmarital asset is marital property to the extent marital efforts caused it, i.e., the owner or nonowner spouse or both.

Appreciation Case Highlights Contribution by Nonowner Spouse

Increase in value of owner’s minority interests in companies was due to owner’s efforts, which were “facilitated” by nonowner’s work in home; appreciation was active and marital property; no error in awarding nonowner half of profits from sale of assets.

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