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.
Cavallaro v. Commissioner
Taxpayer parents incurred gift tax liability when, based on improper valuations, they agreed to merge their S corp. with their sons’ S corp. and accepted an unduly low interest in the new company while sons received an unduly high interest, Tax Court says ...
Court Finds Facts Back Expert’s Value-Per-Subscriber Metric
Court finds trust failed to prove insolvency; its expert’s use of DCF alone was inappropriate where there were no cash flow projections untainted by fraud, but competing expert’s market-based approach and value per subscriber analysis were solid.
DE Chancery Plumbs Merger Price for ‘Speculative Value Elements’
In statutory appraisal action, Chancery scrutinizes merger price for downward or upward adjustment based on improper inclusion of synergistic value or exclusion of value stemming from business opportunities arising prior to consummation of merger.
Do Lost Profits Represent Diminished Value or Double Recovery?
In negligent misrepresentation suit arising out of plaintiff’s loss of business, court allows damages calculation that “identifies” lost profits, viewing lost profits as “a subset” of the total damages, not an additional amount.
Estate of Adell v. Commissioner
Tax court disapproves of estate’s “conflicting expert reports” as to value of decedent’s 100% interest in a C corp. but ultimately adopts estate’s DCF valuation, finding its treatment of personal goodwill is more credible than the IRS’s approach.
‘Reasonably Equivalent Value’ Analysis Is Not a Dollars-and-Cents Issue
For reasonably equivalent value determination, Bankruptcy Court finds contract price and values from experts’ discounted cash flow analyses are too limiting and applies totality of circumstances test, concluding stock transfer is not avoidable.
LightLab Imaging, Inc. v. Axsun Technologies, Inc.
Appeals court finds trial court had discretion under Daubert to exclude expert testimony on future lost profits where expert used the “first mover advantage” as part of his DCF analysis to quantify damages and ended up with an unreliable method.
In re Genco Shipping & Trading Ltd.
In fight over plan confirmation, court finds nature of industry supports debtors’ reliance on net asset value approach to value Chapter 11 dry bulk shipper but not to the exclusion of more traditional methods; however, court rejects use of DCF.
Court Admits Solvency Analysis Lacking Specific Valuation of Debtor
Court finds solvency analysis is not subject to AICPA’s valuation standards and admits expert’s claim that “magnitude of excess” reflected in adjusted balance sheet numbers means assets exceeded liabilities.
DCF Model Proves Unreliable Tool for Ascertaining Cost Basis
Court finds numerous problematic assumptions make plaintiff expert’s DCF model unreliable indicator of FMV of thrift’s branching right; without this value, plaintiff is unable to establish the right’s cost basis and support its tax refund claim.
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.
Valuations Underpin DE Chancery’s Ruling in Going-Private Merger
DE Chancery adopts business judgment review standard where controlling stockholder buyout includes two procedural protections for minority and finds valuations from independent financial advisor demonstrate merger was favorable to minority stockholders.
Huff Fund Investment Partnership v. CKx, Inc. (II)
In statutory appraisal action, Chancery scrutinizes merger price for downward or upward adjustment based on improper inclusion of synergistic value or exclusion of value stemming from business opportunities arising prior to consummation of merger.
Adelphia Recovery Trust v. FPL Group, Inc. (In re Adelphia Corp.)
Court finds trust failed to prove insolvency; its expert’s use of DCF alone was inappropriate where there were no cash flow projections untainted by fraud, but competing expert’s market-based approach and value per subscriber analysis were solid.
Harrison Mfg., LLC v. JMG Mfg., Inc.
In negligent misrepresentation suit arising out of plaintiff’s loss of business, court allows damages calculation that “identifies” lost profits, viewing lost profits as “a subset” of the total damages, not an additional amount.
In re Mercury Companies, Inc. (I)
For reasonably equivalent value determination, Bankruptcy Court finds contract price and values from experts’ discounted cash flow analyses are too limiting and applies totality of circumstances test, concluding stock transfer is not avoidable.
Dietz v. Jacobs
Court finds solvency analysis is not subject to AICPA’s valuation standards and admits expert’s claim that “magnitude of excess” reflected in adjusted balance sheet numbers means assets exceeded liabilities.
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.
In re Rural Metro Corp. Stockholders Litigation
Financial advisor aided and abetted directors’ breach of fiduciary duty by causing ill-timed, below-fair-value sale of the company based on manipulated valuation analysis, including false and material information related to precedent transaction analyses.
Washington Mutual, Inc. v. United States
Court finds numerous problematic assumptions make plaintiff expert’s DCF model unreliable indicator of FMV of thrift’s branching right; without this value, plaintiff is unable to establish the right’s cost basis and support its tax refund claim.