Cortes v. 3A N. Park Ave. Rest Corp.
In buyout case, calculation of fair value of minority shareholder’s interest in restaurant turns on forensic accountant’s credit/cash ratio analysis; New York trial court says law recognizes lack of marketability as a factor in valuing closely held corpor ...
Valuation Combines Elements of Rival Experts’ Cash Flow Analyses
Appeals court defers to trial court’s method of applying one expert’s cap rate to other expert’s cash flow analysis when valuing spouse’s interest in closely held company and says “purposeful” application of minority discount has support among valuators.
Court Relies on DCF to Derive Value of ‘Sui Generis’ Company
NY court rejects comparable analyses to value “truly incomparable” beverage company and relies solely on DCF; court says the fact that expressions of interest to buy the company never became bona fide offers indicates liquidity risk and supports 25% DLOM.
Multimillion-Dollar Personal Goodwill Allocation Leaves Court Stunned
Court says defendants were unjustly enriched when they allocated 40% of the price a competitor paid for assets of and to settle lawsuit with their company to personal goodwill where they also received compensation for consulting services and noncompetes.
Ferolito v. AriZona Beverages USA LLC
NY court rejects comparable analyses to value “truly incomparable” beverage company and relies solely on DCF; court says the fact that expressions of interest to buy the company never became bona fide offers indicates liquidity risk and supports 25% DLOM.
Potok v. Rebh
Court says defendants were unjustly enriched when they allocated 40% of the price a competitor paid for assets of and to settle lawsuit with their company to personal goodwill where they also received compensation for consulting services and noncompetes.
In Buyout, Court Extols Expert’s Valuation and Legal Acumen
Appeals court affirms trial court’s valuation of oppressed shareholder’s minority interest in family business based on credentialed appraiser’s “clear, thorough, professional, and reliable” opinion and knowledge of New York valuation-related law.
In Buyout, Court Extols Expert’s Valuation and Legal Acumen
Appeals court affirms trial court’s valuation of oppressed shareholder’s minority interest in family business based on credentialed appraiser’s “clear, thorough, professional, and reliable” opinion and knowledge of New York valuation-related law.
Browne v. Browne, Jr.
Appeals court defers to trial court’s method of applying one expert’s cap rate to other expert’s cash flow analysis when valuing spouse’s interest in closely held company and says “purposeful” application of minority discount has support among valuators.
Buyout Agreement Short-Circuits Court’s Scrutiny of Appraisals
Court says determination of repurchase price of departing partner’s stake is subject to operating agreement giving defendants absolute control over valuation; absent bad faith conduct, court declines to scrutinize appraisals underlying buyout offer.
Courts Decry Expert’s Failure to Explore Different Ways to Develop FMV
Appeals court affirms trial court’s valuation of medical practices based on buyout provisions where wife’s expert made no attempt to ascertain businesses’ FMV by any other valuation method.
May Court Disregard Shareholder Agreement in Judicial Buyout?
Appeals court finds in judicial buyout, district court properly updated stock price listed in shareholder agreement and could disregard experts’ market approach values, but it erred when it abandoned the contract’s terms as to the manner of the payment.
Valuations Underpin DE Chancery’s Ruling in Going-Private Merger
DE Supreme Court affirms use of business judgment review where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor confirmed merger was favorable to minority stockholders.
Matter of Adelstein v. Finest Food Distributing Co. (II)
Appeals court affirms trial court’s valuation of oppressed shareholder’s minority interest in family business based on credentialed appraiser’s “clear, thorough, professional, and reliable” opinion and knowledge of New York valuation-related law.
Leone v. Owsley
Court says determination of repurchase price of departing partner’s stake is subject to operating agreement giving defendants absolute control over valuation; absent bad faith conduct, court declines to scrutinize appraisals underlying buyout offer.
Kahn v. M&F Worldwide Corp.
DE Supreme Court affirms use of business judgment review where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor confirmed merger was favorable to minority stockholders.
Burstein v. Burstein
Appeals court affirms trial court’s valuation of medical practices based on buyout provisions where wife’s expert made no attempt to ascertain businesses’ FMV by any other valuation method.
Hanusin v. Hanusin
In a divorce case involving a closely held corporation, the appeals court finds trial court was justified to credit a 2004 stock purchase agreement instead of a 2012 settlement when valuing husband’s shares; the buyout was a true arms-length transaction ...
In the Matter of the Marriage of Gay
Appellate court affirms trial court’s determination that—despite expert evidence from both parties—the valuation of the wife’s minority shares in a closely held was too speculative, particularly when no actual buyer was likely to buy the shares; a strong ...
Matter of Adelstein v. Finest Food Distributing Co. (I)
In oppressed shareholder stock valuation proceeding, trial court credits testimony of credentialed appraiser, lauding his methodical approach, use of various methods to cross-check values, and understanding of legal principles related to valuation.
Dawyot v. Catawba Capital Mgmt., Inc.
In buyout dispute, court sets aside third-party appraisal performed pursuant to redemption agreement; court says final appraisal report contains at least one “palpable error” related to normalization of earnings that had a significant effect on the valuation; appraiser did not testify at trial.
Additional evidence of size difference in market multiples
In my last two editorial columns, I presented evidence that smaller companies tend to sell at lower valuation multiples than do larger companies. The accompanying table is further corroboration of tha ...