DOL appellate brief pushes back in Vinoskey ESOP litigation
Neither side is letting up in the contentious Vinoskey ESOP litigation that has now moved to the 4th Circuit U.S. Court of Appeals.
Lysengen v. Argent Trust Co.
ESOP plaintiff’s proposed class action against trustee and selling shareholders survives motion to dismiss; court says complaint gave enough facts to support claims of overpayment and breach of fiduciary duty; defendant must show disputed transaction falls into adequate consideration exemption.
BVU News and Trends October 2020
A monthly roundup of key developments of interest to business valuation experts.
Court of Chancery sanctions use of asset approach in complex appraisal case
A low-profile appraisal case in front of the Delaware Court of Chancery raised important valuation questions, including how the court should determine the fair value of a nonoperating entity and how it should deal with the value of claims both parties brought on behalf of the company prior to the contested merger.
ESOP Plaintiff’s Proposed Class Action Alleging Overpayment Survives Motion to Dismiss
ESOP plaintiff’s proposed class action against trustee and selling shareholders survives motion to dismiss; court says complaint gave enough facts to support claims of overpayment and breach of fiduciary duty; defendant must show disputed transaction falls into adequate consideration exemption.
Key Tennessee appeals court ruling finds tax affecting ‘relevant’ to fair value buyout
In a Tennessee buyout dispute involving a limited liability corporation organized as an S corporation, the parties disagreed over whether it was appropriate to tax affect in calculating the fair value of the terminated member’s interest.
ASA, supporting Vinoskey ESOP appeal, aims to correct BV ‘misstatements’
The ASA recently filed an amicus brief in support of the Vinoskey appeal, in which it claims the district court, in ruling against the ESOP trustee and the owner and selling shareholder, Adam Vinoskey, made numerous valuation-related misstatements that required correction.
Defendant in Vinoskey ESOP case files appeal with 4th Circuit
In the contentious Vinoskey ESOP case, one of the defendants, the owner and selling shareholder, Adam Vinoskey, recently appealed the district court’s finding that he was liable for knowingly participating in the trustee defendant’s ERISA violations and was a co-fiduciary for the trustee’s breaches of fiduciary duties.
In re Happy Child World, Inc.
In an entire-fairness-cum-statutory-appraisal case involving nonoperating day care center whose facility was leased on merger date, court approves use of capitalization of earnings and NAV models and averaging results to determine fair value; business model was uncertain on merger date, court notes.
Uncertain Business Model on Merger Date Justifies Use of Income and NAV Models, Court Says
In an entire-fairness-cum-statutory-appraisal case involving nonoperating day care center whose facility was leased on merger date, court approves use of capitalization of earnings and NAV models and averaging results to determine fair value; business model was uncertain on merger date, court notes.
RVNB class action alleging breach of fiduciary duty by ESOP trustee hurtles toward final settlement
ESOP litigation watchers can add one more case to the number of actions that recently have been resolved.
BVU News and Trends August 2020
A monthly roundup of key developments of interest to business valuation experts.
Plaintiffs in Rainbow ESOP class action ready to settle case
Last week, we reported on the resolution of two major ESOP litigations.
ESOP litigants play by their own valuation rules, speakers say
Imagine if you were playing on a baseball team and the opposing players argue that you are violating the rules of soccer.
Appeal in Lee ESOP case dismissed; ESOP class action also close to resolution
The last few weeks have seen the end of two ESOP litigations that have drawn a lot of attention from the ESOP community.
BVU News and Trends July 2020
A monthly roundup of key developments of interest to business valuation experts.
Raley v. Brinkman
In LLC member buyout dispute, the Court of Appeals finds the term “fair value” does not contemplate the use of shareholder-level discounts. However, tax affecting is relevant evidence when determining the going-concern value of subject S corp. Trial court must consider evidence on tax affecting.
Tennessee Appeals Court Clarifies Use of Discounts and Tax Affecting in Court-Ordered LLC Buyout
In LLC member buyout dispute, the Court of Appeals finds the term “fair value” does not contemplate the use of shareholder-level discounts. However, tax affecting is relevant evidence when determining the going-concern value of subject S corp. Trial court must consider evidence on tax affecting.
‘Particular facts’ justify discounts in mandatory buyback of minority interest, says Missouri high court
Context is “crucial,” the Supreme Court of Missouri recently said in upholding the use of discounts in the court-ordered buyout of a minority owner’s shares in a family business.
Court Finds ESOP Trustee’s Insurance Excludes Coverage for Defense Against DOL’s ERISA Claims
In bifurcated ESOP litigation centering on ERISA violations, court finds trustee defendants’ professional liability policy expressly excluded coverage for ERISA claims; under language of policy, insurer is not required to defend or indemnify trustee defendants fighting DOL’s ERISA allegations.
Gemini Ins. Co. v. Potts
In bifurcated ESOP litigation centering on ERISA violations, court finds trustee defendants’ professional liability policy expressly excluded coverage for ERISA claims; under language of policy, insurer is not required to defend or indemnify trustee defendants fighting DOL’s ERISA allegations.
ESOP Case Appeal Stokes Controversy Over DOL Valuations
A series of court cases have generated controversy over the tactics and valuation methods the Department of Labor (DOL) has been using, including claims that the DOL has improperly redefined the term “fair market value,” does not follow generally accepted valuation principles nor standards, and continually uses an expert the valuation community deems “unqualified.”
NCEO amicus brief supporting dismissal of case details benefits from ESOP participation
The National Center for Employee Ownership (NCEO) also filed an amicus brief in which it supports the dismissal of the Lee case that is currently on appeal with the 4th Circuit.
ASA files amicus brief in Lee case, discussing FMV concerns in ESOP litigation
Responding to the appeal in the Lee case, the American Society of Appraisers recently filed an amicus brief supporting the dismissal of the case.
ESOP trustee defends dismissal of lawsuit and rejects comparison to Brundle
In response to the plaintiff’s appeal in the Lee ESOP case, the defendant trustee said the district court’s dismissal of the case for lack of standing was appropriate.