Court of Chancery adopts deal price, adjusting for synergies and tax savings
In a statutory appraisal action, the Delaware Court of Chancery recently adopted the deal price minus synergies as the best indicator of fair value.
In re Appraisal of Regal Entertainment Group
In a merger action involving a publicly traded company, dissenting shareholders sued for a higher value than the deal consideration. Under the applicable appraisal jurisprudence, the court calculates fair value using the deal price minus synergies and adjusting for the change in value of the target between the signing and closing of the transaction.
In Appraisal Action, Court Determines Fair Value Using Deal Price Minus Synergies and Adjusting for Increase in Value From Signing to Closing of Merger
In a merger action involving a publicly traded company, dissenting shareholders sued for a higher value than the deal consideration. Under the applicable appraisal jurisprudence, the court calculates fair value using the deal price minus synergies and adjusting for the change in value of the target between the signing and closing of the transaction.
Global BVU News and Trends March 2020
Business valuation news from a global perspective.
What corporation tax rate should you use in your business valuations now?
The Finance Act 2016 set corporation tax for 2020-21 at 17%, but the Conservative party intends to increase the rate to 19% (and maintain that rate for the rest of the new Parliament).
Wright v. Phillips
In fair value determination analogous to statutory appraisal valuation, Chancery says companies’ S corp status “has discrete value applicable here,” as captured in expert’s use of 14.5% tax rate (as opposed to 31%); court approves marketability discount.
S Corp Status Adds ‘Discrete’ Value to Business, Chancery Says
In fair value determination analogous to statutory appraisal valuation, Chancery says companies’ S corp status “has discrete value applicable here,” as captured in expert’s use of 14.5% tax rate (as opposed to 31%); court approves marketability discount.
High Court Dissent Rebukes Chancery’s Analysis in Option Valuation Case
In medical company valuation case, high court affirms award to option holders based on deference owed to trial court’s findings of historical fact; dissent says Chancery’s dismissal ...
Cdx Holdings, Inc. v. Fox (Fox II)
In medical company valuation case, high court affirms award to option holders based on deference owed to trial court’s findings of historical fact; dissent says Chancery’s dismissal of board members’ valuation testimony evinces Chancery’s hindsight bias.
High Court Dissent Rebukes Chancery’s Analysis in Option Valuation Case
In medical company valuation case, high court affirms award to option holders based on deference owed to trial court’s findings of historical fact; dissent says Chancery’s dismissal ...
Corrigan v. Testa
Ohio Supreme Court says tax provision imposing state income tax on capital gain realized by nonresident investor in pass-through entity violates taxpayer’s due process rights barring showing taxpayer’s activities are “unitary with” those of the business.
Chancery Decries Accounting Firm’s Compromised Valuation
Chancery says major accounting firm’s merger-related appraisal represents “new low”; to achieve client’s goal of zero corporate tax liability, firm abandoned sound prior approaches and simply copied another accounting firm’s report and called it its own.
Fox v. CDx Holdings
Chancery says major accounting firm’s merger-related appraisal represents “new low”; to achieve client’s goal of zero corporate tax liability, firm abandoned sound prior approaches and simply copied another accounting firm’s report and called it its own.
Bross Trucking, Inc. v. Commissioner
Tax Court says taxpayer’s company owned no corporate goodwill and had no right to taxpayer’s personal goodwill and, therefore, was not liable under IRC Sect. 311(b)(1); the taxpayer, in turn, was not liable for gifting corporate goodwill to his sons.
Tax Court, Frustrated by Inadequate Data, Inscrutable Analyses, Bases Reasonable Compensation on RMA Ratios
The issue in this case was the reasonableness of compensation paid to the shareholder and primary officer of Brewer Quality Homes Inc. (Brewer).
Brewer Quality Homes, Inc. v. Commissioner (I)
Issue is the extent to which amounts that petitioner paid to shareholder-officer are deductible as reasonable compensation under section 162(a)(1).