Montgomery Cellular Holding Co., Inc. v. Dobler
Verizon Inc. had offered to buy MCHC’s majority holder, Palmer Wireless Holdings (Palmer), if Verizon’s initial public offering was successful and if Palmer could acquire 100% of the stock in all of the companies it held.
In re Toys “R” Us, Inc., Shareholder Litigation
One of the issues was whether the board’s financial advisor, Credit Suisse First Boston (First Boston), correctly excluded a control premium in its assessment of the company’s value, and, thus, whether the board failed to reasonably consider the value of ...
Uzielli v. Frank
The issue in this case, involving a dispute over the meaning of the operating agreement of Alph Company, LLC (Alph) as to how the company was to be valued upon the death of one its two members, was whether a federal district court could issue a declarator ...
Finkelstein v. Liberty Digital, Inc.
In this appraisal action, the only valuation issue was the value of only one of the merged company's assets.
Children's Broadcasting Corporation v. The Walt Disney Company, et al. (III)
The U.S. Court of Appeals for the Eighth Circuit determined that a jury correctly determined the amount of Children’s Broadcasting’s damages in this breach of contract/misappropriation of a trade secret case.
Damages for Misappropriation of a Trade Secret Calculated Using the Discounted Cash Flow Method
The U.S. Court of Appeals for the Eighth Circuit determined that a jury correctly determined the amount of Children’s Broadcasting’s damages in this breach of contract/misappropriation of a trade secret case.
Tax Court Determines That Value Was 'Somewhere in the Middle' of Expert Opinions
The taxpayers' expert, Gregory Heebink, used the discounted cash flow (DCF) method and the guideline public company method.
Hess v. Commissioner
Taxpayers gave 10 shares of HII common stock (a 10% stockholder interest) to an irrevocable trust established for their daughter. Issue was the fair market value of the stock for gift tax p ...
Valuation 'Experts' Excluded as Unreliable Based on Numerous Errors in Methodology and Inability to Explain Conclusions
In this bankruptcy adversary proceeding, the trustees as plaintiffs sought to prove that the defendants—Bairnco Corp., Keene Corp., and the individual managers of the companies—had engaged in a series of fraudulent conveyances among subsidiaries to protect assets from the reach of asbestos claimants.
Lippe v. Bairnco Corp. (I)
In this bankruptcy adversary proceeding, the trustees as plaintiffs sought to prove that the defendants—Bairnco Corp., Keene Corp., and the individual managers of the companies—had engaged in a series of fraudulent conveyances among subsidiaries to protect assets from the reach of asbestos claimants.
Bankruptcy Court Indicates Strong Preference for Market Approach, Price Per Subscriber Multiple
This trial court matter involves an adversarial proceeding in bankruptcy in which the liquidating trustee asserts that USN Communications,Inc.'s ("the debtor") purchase of Connecticut Telephone and Connecticut Mobilecom (CT Tel) stock from the Hatten sellers for $68 million was a fraudulent transfer.
Use rules of thumb with caution, not as a primary appraisal method
The first thing to say about rules of thumb is that they should practically never be relied on as a primary appraisal method. Having said that, if there are valuation rules of thumb for an in ...
Kool, Mann, Coffee & Co., et al. v. L. Coleman Coffey, et al.
The U.S. Court of Appeals for the 3rd Circuit recalculated the bankruptcy court’s valuation of a marina and houseboat rental business.
S corporation versus C corporation values
In this article on the topic of C versus S corporation values, Chris Mercer addresses problems and choices for the appraiser in the aftermath of three controversial court decisions ( Gross v. Commiss ...
Research on DCF method
You wrote in Chapter 12 of your Cost of Capital book that you were working on a research paper showing examples of applying the DCF method of estimating cost of capital using various sourc ...
Computing terminal value
In reviewing the Cost of Capital book, page 16, we noted Dr. Pratt's comments about the error in treating EBITDA as free cash flow. We also noted that Dr. Pratt utilizes net cash flow in his discussion of the Gordon Growth Model and the Two-Stage Model shown on pages 25 to 29.
Valuation of high-tech companies requires modification of standard approaches
The valuation of early stage technology companies ("high-tech") is significantly more challenging than valuing more mature businesses in other industries. These companies are commonly characterized by ...
Peltz v. Hatten
Adversarial proceeding in bankruptcy in which the liquidating trustee asserts fraudulent transfer of stock.
CapX = depreciation is unrealistic assumption for most terminal values; Frequent error causes overvaluation
This article calls attention to a very common error made by valuation analysts. In a growing company, capital expenditures logically should exceed depreciation in most instances. Yet, many analysts as ...
Should subsequent events be considered in the present value of a business entity?
One of the questions I'm frequently asked is "What are the rules relating to proper inclusion or exclusion of consideration or subsequent events?" Two categories of subsequent events There are ...
FASB provides major new opportunity for appraisers - part 2 of 2
The Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards (SFAS) 141 and 142 in the fall of 2001. SFAS 142 changes the accounting for goodwill from an ...
Estate of Hoffman v. Commissioner
At issue is the fair market value of property interests held by decedent at the time of her death.
Appraisers Apply Myriad of Valuation Techniques to Various Estate Holdings
Marcia Hoffman's (decedent) estate held a 27.5% interest in Clubside Partnership, which was family owned.
Identifying pool of willing buyers may introduce synergy to fair market value
How many times have we, valuation consultants, read the definition of fair market value 1 and then arrived at an opinion of value without focusing on the characteristics of the "willing buyer"?
Children's Broadcasting Corporation v. The Walt Disney Company, et al. (II)
The U.S. Court of Appeals for the Eighth Circuit affirmed the lower court’s decision to award a new trial on damages in this breach of contract and misappropriation of trade secrets case. Both parties were involved in the radio broadcasting business.