New case affirms treatment of goodwill in Indiana divorces
In Indiana, enterprise goodwill is includable in the marital estate, but personal goodwill is not (see BVR’s Charting Goodwill map).
In Re Cellular Tel. P’ship Litig.
In this coordinated action involving 13 partnerships that were involved in freeze-out transactions by AT&T of minority shareholders, AT&T breached its fiduciary duties and effectuated the freeze-out through an unfair process and by paying an unfair price. The freeze-out was subject to the entire fairness standard of review. AT&T bore the burden of proving that the freeze-out was entirely fair to the minority partners. AT&T failed in that proof and thereby sought to capture future value for itself. AT&T did not employ any procedures that insured fairness to the minority partners. The lead partner of the valuation firm had a long-standing relationship with AT&T, and internal AT&T personnel influenced the outcome of the valuation. The court determined the fair value of the interest as a remedy to the situation.
Delaware Chancery Court Rejects Partnership Valuation in a Freeze-Out as Unfair to Minority Partners
In this coordinated action involving 13 partnerships that were involved in freeze-out transactions by AT&T of minority shareholders, AT&T breached its fiduciary duties and effectuated the freeze-out through an unfair process and by paying an unfair price. The freeze-out was subject to the entire fairness standard of review. AT&T bore the burden of proving that the freeze-out was entirely fair to the minority partners. AT&T failed in that proof and thereby sought to capture future value for itself. AT&T did not employ any procedures that insured fairness to the minority partners. The lead partner of the valuation firm had a long-standing relationship with AT&T, and internal AT&T personnel influenced the outcome of the valuation. The court determined the fair value of the interest as a remedy to the situation.
Dispelling the ‘hired gun’ perception of testifying experts
A question often comes up: “How can two qualified and experienced business valuation experts analyze the same company and come up with widely disparate values?”
Typical Way to Estimate Long-Term Growth Is ‘Flat Wrong,’ Says Grabowski
New research calls into question the common practice of using long-term real GDP growth plus expected inflation in terminal values.
Sponsorships available for the AAML/BVR National Divorce Conference
Want to reach out to divorce attorneys?
Cain v. Cain
The Nebraska District Court in this case accepted the value of the wife’s expert testimony at trial as to the value of the husband’s 50% interest in his business. Both appraisers included DLOMs in determining value, and both appraisers utilized appropriate valuation methodologies. The difference in the two valuations is a matter of the difference in professional judgment.
The Nebraska District Court’s Determination of the Value of a Husband’s Business Is Affirmed—Appraisers Used Acceptable Valuation Methodology
The Nebraska District Court in this case accepted the value of the wife’s expert testimony at trial as to the value of the husband’s 50% interest in his business. Both appraisers included DLOMs in determining value, and both appraisers utilized appropriate valuation methodologies. The difference in the two valuations is a matter of the difference in professional judgment.
Avoid This Mistake When Using an Exit Multiple in the Terminal Year
There is nothing wrong with using exit multiples on the terminal year of a DCF, but the devil is in the details.
Dates set for AAML/BVR National Divorce Conference
If you do any valuation work for divorce, you do not want to miss the National Divorce Conference, brought to you by the American Academy of Matrimonial Lawyers (AAML) and Business Valuation Resources (BVR).
Business Valuation Update Yearbook, 2022 Edition
January 2022 PDF (454 pages)
BVR (editor)
Business Valuation Resources, LLC
Divorce Disputes: When Valuation Experts Disagree
Valuations performed in the context of divorce litigation encounter scrutiny and challenge from opposing counsel and their experts. This puts experts in the unique situation of defending their analyses and opinions. Utilizing proper valuation techniques encompassed with supporting documentation, facts, and statistical market and industry analyses will enhance credibility by increasing an appraiser’s confidence level in his or her opinion. Join expert valuator Josh Shilts and Jeff Robison as they discuss areas in valuation that ...
BV News and Trends December 2021
A monthly roundup of key developments of interest to business valuation experts.
Global BV News and Trends December 2021
Business valuation news from a global perspective.
BV News and Trends November 2021
A monthly roundup of key developments of interest to business valuation experts.
Global BV News: Latest issue of OIV Journal available
The spring 2021 issue of the journal of the Organismo Italiano di Valutazione (OIV), the valuation standards-setter in Italy, contains the following articles.
Valuation experts spar over fraudulent transfer matter
In the bankruptcy court, two valuation experts squared off in a case where the trustee argued that a cash transfer by the debtor was a constructively fraudulent transfer under the bankruptcy code.
Warning to Business Valuers Looking to Use New ESG Ratings
A hot topic today is environmental, social, and governance (ESG) factors and how to reflect the impact of these factors in business valuations and financial reporting. Data are starting to emerge to help quantify the impact of ESG—but analysts need to be careful in using these data.
Justifying hockey-stick projections
Valuation experts frequently receive from management what may appear to be an unrealistic forecast that starts off modestly but shoots up in future years as if by magic.
Business Valuation OIV Journal Spring 2021
Business Valuation OIV Journal has been created by Organismo Italiano di Valutazione (OIV), the Italian Valuation Standard Setter, to provide a forum for discussion and to foster cultural progress in the field of business valuation. In this issue, articles include "Cross-border DCF valuation in a nutshell"; "Level 3 reporting quality: trend analysis of derivative instruments’ restatements"; and "Business valuation and fundamental analysis."
BV News and Trends September 2021
A monthly roundup of key developments of interest to business valuation experts.
Examining the ‘Reasonably Objective Basis’ Concept for Projections
Recent developments have raised the bar with respect to how valuation analysts document financial projections and forecasts with regard to a “reasonably objective basis.” But what exactly is this concept and where can analysts look for specific guidance.
Yaquinto v. Thompson St. Capital Partners (In re Stone Panels, Inc.)
Trustee argued that a cash transfer by debtor was a constructively fraudulent transfer under the bankruptcy code. The Trustee was able to show that the transaction was an interest in property for which debtor did not receive reasonably equivalent value. The Trustee was not able to show that the debtor was insolvent at the date of the transfer or became insolvent as a result of the transfer. The debtor was engaged in a business for which the property remaining was sufficiently capitalized. It appeared that the debtor would have sufficient access to cash to service its obligations and operate its business in a sustainable way. The Trustee failed in its burden of proof.
Property Transfer Was Not Fraudulent Because Debtor Was Not Insolvent
Trustee argued that a cash transfer by debtor was a constructively fraudulent transfer under the bankruptcy code. The Trustee was able to show that the transaction was an interest in property for which debtor did not receive reasonably equivalent value. The Trustee was not able to show that the debtor was insolvent at the date of the transfer or became insolvent as a result of the transfer. The debtor was engaged in a business for which the property remaining was sufficiently capitalized. It appeared that the debtor would have sufficient access to cash to service its obligations and operate its business in a sustainable way. The Trustee failed in its burden of proof.
Damodaran’s strong feelings about ESG
A year ago, Professor Aswath Damodaran (New York University Stern School of Business) called it “the most overhyped, oversold concept in the history of business.”