Vieira v. Think Tank Logistics, LLC (In re Levesque)
In this adversary Chapter 7 proceeding, the trustee sought to avoid the debtor’s transfer of his interest in two corporate entities and either recover the interests or the value of such interests from the defendants. As part of this proceeding, the court was asked to decide on two motions in limine regarding an valuation expert from each side. The motions (Daubert) asked that the experts not be allowed to testify. The court granted in part and denied in part the motions of the parties.
Bankruptcy Court (South Carolina) Grants in Part and Denies in Part Motions to Exclude Experts in Daubert Motions
In this adversary Chapter 7 proceeding, the trustee sought to avoid the debtor’s transfer of his interest in two corporate entities and either recover the interests or the value of such interests from the defendants. As part of this proceeding, the court was asked to decide on two motions in limine regarding an valuation expert from each side. The motions (Daubert) asked that the experts not be allowed to testify. The court granted in part and denied in part the motions of the parties.
Are you up on the recent BV-related court cases?
One of the highlights of the BVR webinar schedule is the regular update on valuation-related court cases.
In re Tesla Motors Stockholder Litig.
At issue was a 2016 acquisition of Solar City Corp. by Tesla. Some Tesla shareholders claimed that Musk caused Tesla to overpay for Solar through his alleged domination and control of Tesla’s board. The primary focus of the shareholders was that Solar was insolvent at the time of the acquisition. The court applied the “entire fairness” standard. The Court of Chancery found the acquisition to be “entirely fair.” The Delaware Supreme Court affirmed the Court of Chancery decision.
Delaware Supreme Court Upholds ‘Entire Fairness’ of a Tesla Acquisition
At issue was a 2016 acquisition of Solar City Corp. by Tesla. Some Tesla shareholders claimed that Musk caused Tesla to overpay for Solar through his alleged domination and control of Tesla’s board. The primary focus of the shareholders was that Solar was insolvent at the time of the acquisition. The court applied the “entire fairness” standard. The Court of Chancery found the acquisition to be “entirely fair.” The Delaware Supreme Court affirmed the Court of Chancery decision.
BV News and Trends May 2023
A monthly roundup of key developments of interest to business valuation experts.
City of Fort Collins v. Open Int’l, LLC
In a breach of contract suit concerning failure of vendor to deliver software, the court considered and ruled on motions to exclude certain expert witnesses. The court denied most motions while granting some motions in part.
U.S. District Court (Colorado) Rules on Motions to Exclude Testimony of Expert Witnesses
In a breach of contract suit concerning failure of vendor to deliver software, the court considered and ruled on motions to exclude certain expert witnesses. The court denied most motions while granting some motions in part.
Have you tried Abbott’s passive appreciation calculator?
In last week’s BVWire, we mentioned that Dr. Ashok Abbott (West Virginia University) has developed an online application that produces a passive appreciation factor on a national level for businesses in the retail sector.
Gutierrez v. Padilla
The plaintiffs bought two automotive supply businesses from the defendant. The plaintiffs alleged that the defendant and the defendant’s broker made representations about the condition of the businesses during the sale and breached various terms of the sale contract. The district court dismissed complaints against the defendant’s broker and awarded damages to both parties regarding alleged actions in regard to the sale contract. The appeals court affirmed the district court’s decisions.
New Mexico Appeals Court Affirms Awards of Damages to Both Parties on Claims of Breach of Contract
The plaintiffs bought two automotive supply businesses from the defendant. The plaintiffs alleged that the defendant and the defendant’s broker made representations about the condition of the businesses during the sale and breached various terms of the sale contract. The district court dismissed complaints against the defendant’s broker and awarded damages to both parties regarding alleged actions in regard to the sale contract. The appeals court affirmed the district court’s decisions.
Court do-over to figure passive appreciation for divorce
In an Ohio divorce case, the trial court made an award to the wife based on the full fair market value of the husband’s business.
California Appellate Court Affirms That the Marital Settlement Agreement Should Not Be Set Aside for Alleged Inadequate Disclosures
The husband and wife entered into a settlement agreement as to their divorce that was included in the trial court’s judgment of dissolution. The wife thereafter asked the trial court to set the agreement aside due to, among other things, the husband’s failure to disclose his ownership interests in various businesses. The appellate court found the evidence for her motion(s) to be lacking and affirmed the trial court.
In re Hettinga
The husband and wife entered into a settlement agreement as to their divorce that was included in the trial court’s judgment of dissolution. The wife thereafter asked the trial court to set the agreement aside due to, among other things, the husband’s failure to disclose his ownership interests in various businesses. The appellate court found the evidence for her motion(s) to be lacking and affirmed the trial court.
Ohio Appellate Court Remands Value of Businesses for Determination of Active Appreciation
This matter involved cross-appeals from a divorce decree in Trumbull County, Ohio. The focus of this digest relates to cross-appeals relating to the values of the husband’s businesses and the matter of active appreciation on those businesses.
Fordeley v. Fordeley
This matter involved cross-appeals from a divorce decree in Trumbull County, Ohio. The focus of this digest relates to cross-appeals relating to the values of the husband’s businesses and the matter of active appreciation on those businesses.
VeroBlue Farms USA Inc. v. Wulf
In this complex case, which the district court judge called “a doozy,” the subject of this subissue was a motion by the defendants to exclude the testimony of the plaintiff’s (VeroBlue Farms USA Inc.) damages expert, Brandi Kleinman, CPA/CFF. The district court judge assigned the case to the court’s magistrate judge for recommendation of decision. The motion alleged a multitude of issues and flaws with the opinions of Kleinman. The magistrate, despite these alleged issues and flaws, denied the motion, thereby allowing Kleinman to testify.
U.S. District Court (Texas) Allows Testimony of Damages Expert Despite Alleged ‘Flawed Opinions’
In this complex case, which the district court judge called “a doozy,” the subject of this subissue was a motion by the defendants to exclude the testimony of the plaintiff’s (VeroBlue Farms USA Inc.) damages expert, Brandi Kleinman, CPA/CFF. The district court judge assigned the case to the court’s magistrate judge for recommendation of decision. The motion alleged a multitude of issues and flaws with the opinions of Kleinman. The magistrate, despite these alleged issues and flaws, denied the motion, thereby allowing Kleinman to testify.
Dentists Ins. Co. v. Yousefian
The plaintiff insurance company in this damages case waived work product protection when the plaintiff’s expert disclosed alleged “secret” information to the defendant’s expert. The court required disclosure.
Plaintiff’s Expert Waives Work Product Protection
The plaintiff insurance company in this damages case waived work product protection when the plaintiff’s expert disclosed alleged “secret” information to the defendant’s expert. The court required disclosure.
Mikalacki v. Rubezic
In this Arizona marital dissolution case, the Court of Appeals affirmed the trial court’s acceptance of a calculation of value to determine the value of a couple’s law practice, awarded to the husband as part of the equitable distribution. Other matters not related to valuation issues were part of the appellate decision.
Arizona Appeals Court Affirms Trial Court’s Acceptance of a Calculation of Value
In this Arizona marital dissolution case, the Court of Appeals affirmed the trial court’s acceptance of a calculation of value to determine the value of a couple’s law practice, awarded to the husband as part of the equitable distribution. Other matters not related to valuation issues were part of the appellate decision.
In re GGP, Inc. Stockholder Litig.
Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield paid a sizable preclosing dividend followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.
The Delaware Chancery Court Erred in Dismissing Claims Regarding Appraisal Rights Disclosures in a Merger—Supreme Court Remands
Brookfield Property Partners Inc. acquired GGP Inc. in a merger transaction. During negotiations, Brookfield Property Partners LP expressed concern over the number of GGP stockholders who might see appraisal under Delaware law. Brookfield Property Partners suggested inserting an appraisal rights closing condition that allowed it to terminate the agreement if a specified number of GGP shares demanded appraisal. Brookfield Property Partners objected, and the condition was nixed. At the urging of Brookfield Property Partners, the merger was structured so that Brookfield funded a sizable preclosing dividend which was paid by GGP to eligible shareholders, followed by a small residual payment called a “per share merger consideration.” GGP stockholders were told they could exercise their appraisal rights solely in connection with the merger, set at $23.50 per share, in relation to the per-share merger consideration valued at $0.312 per share. Plaintiff stockholders claimed they were led to believe that a fair value determination would be limited to the value of the post-dividend of GGP. The Supreme Court agreed with the Chancery Court that the defendants did not unlawfully eliminate appraisal rights but disagreed that the proxy disclosures were sufficient.
No proof of personal goodwill in Utah divorce case
In some states, personal goodwill in a business is not part of the marital estate—but you have to have evidence that it exists.