Business Valuation Case Law Yearbook, 2022 Edition
January 2022 PDF, Softcover (177 pages)
BVR (editor)
Business Valuation Resources, LLC
The legal coverage and in-depth analysis from the BVR legal team deliver lessons learned to help appraisers reach better and more defensible valuation conclusions. All the cases featured in this book impart important lessons about applicable legal principles, approved and discredited valuation methodology, and the act (and art) of presenting expert opinions. This must-have collection benefits both the generalist as well as the specialist.
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In re Multiplan Corp. Stockholders Litig.
This case dealt with a motion to dismiss the claims of the plaintiffs (by the defendants) in a stockholder suit against a special purpose acquisition company (SPAC). The claims were primarily that the plaintiffs’ claims were derivative, which failed to plead demand futility and that the business judgment rule applied. Many of the parties’ arguments centered around unique characteristics of a SPAC. In concluding that the entire fairness standard of review applied, the Delaware Chancery Court noted that “the fact that a reasonably conceivable impairment of public stockholders’ redemption rights—in the form of materially misleading disclosures—has been pleaded in this case.” The case was to go forward against all but two defendants.
Delaware Chancery Court Allows Breach of Fiduciary Suit to Move Forward on a SPAC
This case dealt with a motion to dismiss the claims of the plaintiffs (by the defendants) in a stockholder suit against a special purpose acquisition company (SPAC). The claims were primarily that the plaintiffs’ claims were derivative, which failed to plead demand futility and that the business judgment rule applied. Many of the parties’ arguments centered around unique characteristics of a SPAC. In concluding that the entire fairness standard of review applied, the Delaware Chancery Court noted that “the fact that a reasonably conceivable impairment of public stockholders’ redemption rights—in the form of materially misleading disclosures—has been pleaded in this case.” The case was to go forward against all but two defendants.
An Inside Look at the Landmark ESOP Valuation Case
For over a decade, the Department of Labor has not lost a major ESOP case on a valuation issue, but its winning streak ended with Walsh v. Bowers. The case involves many key valuation issues, and Ken Pia (Marcum LLP) and Ian Rusk (Rusk O’Brien Gido + Partners LLC), expert witnesses for the defense, give their insights.
BV News and Trends November 2021
A monthly roundup of key developments of interest to business valuation experts.
Key ESOP case underlines importance of the management interview
In the published opinion in the groundbreaking recent Walsh v Bowers ESOP case, the court noted that the DOL’s valuation expert’s “failure to follow Uniform Standards of Professional Appraisal Practice (USPAP) introduced substantial errors into [his] analysis.”
Will the landmark ESOP valuation case open the door?
During an amazing webinar with the testifying experts in the recent Walsh v Bowers ESOP case, a question came in from the audience: “Do you think this case will open the door for the Department of Labor and the valuation profession to work together to develop guidance around ESOP valuations?”
Experts in landmark ESOP valuation case give the inside story
For over a decade, the Department of Labor has not lost a major ESOP case on a valuation issue, but its winning streak ended with Walsh v. Bowers.
BV News and Trends September 2021
A monthly roundup of key developments of interest to business valuation experts.
Major win in ESOP valuation case vs. DOL
A district court has ruled “decisively” against the Department of Labor (DOL) in an ESOP valuation case, stressing that the DOL failed to follow standard valuation practices.
BV News and Trends August 2021
A monthly roundup of key developments of interest to business valuation experts.
Recap of recent BV cases of note
A number of recent cases have emerged that contain various valuation issues.
ESOP litigation has become ‘risky business,’ says Alerding
As BVWire recently reported, the latest development in the long-running Brundle ESOP litigation is a lawsuit the trustee has filed against the very ESOP appraiser it once had hired to work on the case.
Another wrinkle in the Brundle ESOP case
Although the district and appellate courts in the landmark Brundle ESOP case ruled years ago against the trustee, Wilmington Trust, litigation related to the case is not over.
Iowa Supreme Court Allows Reduction in Value for Transaction Costs but Refuses to Allow a Reduction for Built-In Capital Gains Tax
This case was decided, on appeal, under the Iowa “election-to-purchase-in-lieu-of-dissolution statute.” The Iowa Supreme Court decided that, because the parties’ experts had “both included transaction costs in their valuations under a net asset approach, the district court’s failure to reduce the asset values to account for the costs to liquidate the corporation’s assets warranted reversal.” Additionally, since there was no evidence of an intention to liquidate the company or its assets, the court declined to adjust for the built-in gains tax consequences urged by the majority shareholder.
Guge v. Kassel Enters.
This case was decided, on appeal, under the Iowa “election-to-purchase-in-lieu-of-dissolution statute.” The court decided that, because the parties’ experts had “both included transaction costs in their valuations under a net asset approach, the district court’s failure to reduce the asset values to account for the costs to liquidate the corporation’s assets warranted reversal.” Additionally, since there was no evidence of an intention to liquidate the company or its assets, the court declined to adjust for the built-in gains tax consequences urged by the majority shareholder.
Fair Price for Delaware Fiduciary Actions Can Exceed Appraisal Fair Value
Can fiduciaries of Delaware corporations breach their duties and face damages for a merger that provides stockholders with the equivalent of fair value in a judicial appraisal? The answer may surprise you.
BVU News and Trends April 2021
A monthly roundup of key developments of interest to business valuation experts.
New evolving ESOP case raises familiar valuation-related issues
A new ESOP litigation is underway in federal district court related to a 2011 transaction in which the majority owner of the company sold his remaining stock to the company’s ESOP.
Appraisal value does not control fiduciary litigation, Court of Chancery says
In 2019, in the Columbia Pipeline statutory appraisal case, the Delaware Court of Chancery found the unadjusted deal price was the best evidence of fair value.
Scalia v. Reliance Trust Co.
In an evolving ESOP case, court says DOL’s allegations that ESOP trustee and various directors engaged in breaches of fiduciary duties and caused the ESOP to enter a prohibited transaction (i.e., overpaid for company stock) require “fact-intensive inquiry” and cannot be resolved on summary judgment.
Court Says DOL Claims in ESOP Case Require ‘Fact-Intensive Inquiry’ and Denies Motions for Summary Judgment
In an evolving ESOP case, court says DOL’s allegations that ESOP trustee and various directors engaged in breaches of fiduciary duties and caused the ESOP to enter a prohibited transaction (i.e., overpaid for company stock) require “fact-intensive inquiry” and cannot be resolved on summary judgment.
DOL and Professional Fiduciary Services settle ESOP suit
The DOL recently settled a suit against Professional Fiduciary Services (PFS) related to a 2012 transaction in which PFS served as trustee in an ESOP acquisition of outstanding company stock.
Vinoskey reply brief refutes DOL’s stock value and control claims
Argument continues in the contentious Vinoskey ESOP litigation, which is now in the 4th Circuit where the remaining defendant, Adam Vinoskey, has appealed the district court’s liability and damages findings.
BVU News and Trends December 2020
A monthly roundup of key developments of interest to business valuation experts.