Tax Consequences, Shareholders’ Agreement and a Control Premium
The Vermont Supreme Court affirmed the lower court's valuation of dissenter's stock in a resort lodge.
Drawing a clear distinction between income and market approaches and methodology
The point of this column is to advocate that income approach methods be distinguished clearly from market approach valuation methods. The valuation profession has (somewhat arbitrarily) classified ...
Controlling Stockholders Have No Duty to Share Control Premium Received
NCC Industries is a publicly traded Delaware corporation involved in the garment business.
Discretionary earnings valuation method used for smaller companies
The "multiple of discretionary earnings method" is gaining acceptance as a method for valuing small companies, but the user must understand it, or it may be misapplied. Three key questions To ...
Adjusting usually inappropriate when valuing a minority interest
I have read both in your books and in the Reader/Editor Exchange of your newsletter how certain adjustments, or lack thereof, consider a closely-held companys earning capacity in light of t ...
Herzog, Heine, Geduld, Inc. v. NCC Industries
Plaintiffs alleged breach of fiduciary duty based on majority shareholders sale of stock at a control premium price, where public sale price dropped significantly thereafter.
Swing vote is not control
I have a question regarding the treatment of a gift in the following situation: 1) The current ownership of Company X is as follows: 51% owned by Mom & Dad in a living trust, 30% owned ...
Control versus minority value depends on relative cash flows
Could you possibly help with the following scenario: Valuing a minority interest and no normalization adjustments are made to the financial data, capitalization of earnings method is used ...
Consolidation IPO creates liquidity for new company
We brought you an example of a "consolidation IPO" in the medical field last year (see Spotlight Valuation, 5/96 p. 3), and here's one in the travel industry. The general idea is that a group of small ...
ASA conference offers valuable insights, part 1 of 2
Charlie Elliott of Howard Barker Frazier & Elliott chaired the business valuation portion of the American Society of Appraisers Annual International Conference held in Houston June 23-25. There wa ...
Practitioners disagree strongly on excess earnings methodology
In our October 1996 issue I titled my Editor's Column The 'excess earnings' method: how to get a defensible result. We included a questionnaire and solicited reader response. The r ...
Court Rejects Hypothetical Control Premium Scenario
At issue is the value of Clyde Wright's 201,408 shares of common stock of the Wilber Corp., which owns 100% of the common stock of Wilber National Bank.
W. Clyde Wright v. Commissioner
At issue is the valuation of decendant's 201,408 shares of common stock of the Wilber Corp.
Priebe v. Priebe
Issue is the value of husband's one-quarter interest in four family businesses, including whether a forty-percent minority discount was appropriate in a divorce setting.
Application of Minority Discounts Determined on a Case-by-Case Basis
The South Dakota Supreme Court affirmed the application of a 40% minority interest discount to the husband's 25% interests in four family businesses. After reviewing cases from other jurisdictions, the supreme court noted that the application of a minorit ...
Payment to Estate Partly for Decedent's Services
Decedent owned 71.43% of the stock of a law firm (CSB) that specialized in personal injury law, with earnings based on contingent fees.
Discount From NAV Issue in Liquidating Trust Value
The issue is the value of a 5% interest in a liquidating trust. The only dispute is the appropriate discount from NAV.
Estate of Cartwright v. Commissioner
At issue is whether life insurance proceeds were paid to decedent's estate solely to redeem his CSB stock, as petitioner contends, or partly for his CSB stock and partly for any claims for cases or work in process, as respondent contends.
Court Rejects Income Approach, Says Stock Worth Adjusted NAV
The major issue was the value of stock in an outdoor advertising sign company (SOAI) that the company redeemed on Jan. 25, 1982.
Casey v. Commissioner
At issue is the amount of discount applied to the fair market value of certain property included in the estate.
Cidulka v. Commissioner
At issue is the valuation of gifts made by decedent in the years 1980, 1981, and 1982 of stock in State Outdoor Advertising, Inc. (SOAI) for gift and estate tax purposes.
Delaware court restricts inspection rights of hostile 29% minority stockholder
Leviton was and is a privately held electronics manufacturer whose CEO, Harold Leviton, together with his wife holds 76.45% of Leviton Class A (voting) stock in a voting trust of which he is ...
Thomas & Betts Corporation v. Leviton Manufacturing Co.
At issue is the plaintiff's interest in inspecting the books and records and stockholder list of the defendant company of which he has a 29% interest.
Court Takes Position on Trademark and Unpatented Technology Values
The issues in this case pertain to the acquisition of Carnation Co. by Nestle Holdings Inc.
Nestle Holdings v. Commissioner
At issue is the fair market value of Carnation's inventory, trademarks and trade names, unpatented technology, and goodwill and going concern for federal income tax purposes.