BV News and Trends September 2021
A monthly roundup of key developments of interest to business valuation experts.
Recap of recent BV cases of note
A number of recent cases have emerged that contain various valuation issues.
Van Vleet comments on use of SEAM in Ryan case
BVWire recently reported on the Ryan Trust v. Ryan case, a buyout dispute in which the Nebraska Supreme Court affirmed the district court’s decision to credit the valuation testimony of the expert for the late majority shareholder.
In buyout dispute, ‘downward bias’ sinks expert’s fair value determination
In a bitter buyout dispute involving a successful private family business and featuring two veteran appraisers, the Nebraska Supreme Court recently affirmed the district court’s decision to unreservedly credit the valuation testimony of the expert for the late majority shareholder.
Ryan Trust v. Ryan
In family buyout dispute, state high court affirms trial court’s decision to adopt expert valuation testimony for selling majority shareholder, finding expert’s DCF inputs were reasonable as was selection of multiple of earnings in GPTC analysis; expert’s explanation for S corp premium was convincing.
State Supreme Court Affirms Adoption of Selling Shareholder’s Expert Value Findings
In family buyout dispute, state high court affirms trial court’s decision to adopt expert valuation testimony for selling majority shareholder, finding expert’s DCF inputs were reasonable as was selection of multiple of earnings in GPTC analysis; expert’s explanation for S corp premium was convincing.
Absence of Noncompete Drives Goodwill Valuation in Liquidation Sale
In case of voluntary corporate dissolution under judicial supervision, appeals court finds receiver’s minimum bid value was based on correct standard of value (liquidation value) and calculated auction sales price reflected all elements of a going concern ...
Absence of Noncompete Drives Goodwill Valuation in Liquidation Sale
In case of voluntary corporate dissolution under judicial supervision, appeals court finds receiver’s minimum bid value was based on correct standard of value (liquidation value) and calculated auction sales price reflected all elements of a going concern ...
Perry v. Sackett
In case of voluntary corporate dissolution under judicial supervision, appeals court finds receiver’s minimum bid value was based on correct standard of value (liquidation value) and calculated auction sales price reflected all elements of a going concern ...
Williams v. Gaines
At issue is evidence for the fair value of one-half of Gaines Insultation stock.
Goodwill not an asset in Nebraska professional corporations
One issue in this corporate dissolution case was the inclusion of goodwill in the value of the corporation.
Fair Value and Fair Market Value Identical in Florida Corporate Dissolution
The issue in this corporate dissolution was the value of Enrique Garcia’s 50% interest in a closely held corporation, G&G Fashion Design Inc., which operated two clothing stores.
Detter v. Miracle Hills Animal Hospital PC (I)
Goodwill is not a marketable asset that stays with a corporation, but, rather, a nonmarketable one that leaves with a professional.
Multiplier Outside Experts’ Range Affirmed
In this proceeding to dissolve a corporation, the Supreme Court found in favor of Anthony Carter and against Robert Carter in the amount of $114,383.
G & G Fashion Design, Inc. v. Garcia
Trial court accepted value of a real arm's length offer as evidence for valuation, which held.
Corporation not bound by buyout fair value; may elect to dissolve
The issue in this corporate dissolution action is whether the shareholder who elects to purchase the shares of the shareholder ...
In re the Matter of Carter
On appeal, changing a multiplier applied to gross revenue to be within the range of values offered at trial would only serve to help appellee, and is left undisturbed.
Fierro v. Templeton
Issue in this corporate dissolution was the fair value of Templeton's 50% interest pursuant to Fierro's election to purchase in lieu of dissolution.
Uncompleted Contracts Not Included in Fair Value, Defined as Liquidation Value
The issue in this case was whether the trial court erred as a matter of law in confirming the award of the appraiser, where the appraiser did not include the estimated value of construction contracts that had not been completed as of the valuation date.
Trahan v. Trahan
The issue was whether to include the estimated value of construction contracts that had not been completed as of the valuation date in value of corporation.
Evidence Supported 15% Long-Term Growth Rate; Court Reduces DLOM
Vetco Inc. is a private, closely held corporation. Kenneth Wolk is Vetco's minority shareholder.
Section 2000 Fair Value Assumes a Hypothetical Seller's Covenant Not to Compete
This was a voluntary corporate dissolution proceeding.
In re Vetco, Inc.
Vetco's minority shareholder commenced this proceeding to dissolve Vetco and Vetco opted to purchase Wolk's shares in lieu of dissolution.
Mart v. Severson
In voluntary corporate dissolution proceeding, Severson exercised his right under Cal. Corp. Code section 2000 to purchase Mart's shares at their fair value to avoid dissolution.
Actual Noncompete Agreement Not Relevant to Fair Value Determination
The California Court of Appeals, District 1, reversed the lower court’s determination of fair value in this voluntary dissolution proceeding.