Louisiana Appeals Court Affirms Use of Discounts in LLC Valuations
Appeals court supports trial court’s decision to value departing member’s minority interest on fair market value basis pursuant to state statute rather than method specified in some existing corporate documents; appeals court affirms lower court’s discretion to apply post-Cannon discounts.
Wall v. Bryan
Appeals court supports trial court’s decision to value departing member’s minority interest on fair market value basis pursuant to state statute rather than method specified in some existing corporate documents; appeals court affirms lower court’s discretion to apply post-Cannon discounts.
BVLaw Recent Case Additions
Case law matters. Check out these three divorce decisions, recently added to BVLaw, which arose in different states and which all dealt with the question of whether it was appropriate to discount the owner-spouse’s interest in a closely held business.
Wiegers v. Richards-Wiegers
Alaska high court finds trial court was not required to value husband’s shares in closely held company under the liquidation approach the company historically had used in buy-out situations; trial court’s “true asset” approach was based on credible expert testimony.
Trial Court’s ‘True Asset’ Valuation Aligns With Expert’s Testimony
Alaska high court finds trial court was not required to value husband’s shares in closely held company under the liquidation approach the company historically had used in buy-out situations; trial court’s “true asset” approach was based on credible expert testimony.
Internal IRS memo unearthed re: S corp valuations
During a webinar, Michael Gregory (Michael Gregory Consulting LLC) discussed an internal IRS memo he recently obtained via a Freedom of Information Act (FOIA) request that has implications for valuing noncontrolling interests in S corps.
Ohio Appeals Court Approves Use of Fair Value Standard in Valuing Farm Entities
Appeals court upholds valuation of minority interest in farm entities based on fair value standard of value; court notes prevailing expert specifically referenced buy-sell agreements that did not contemplate use of discounts in valuing exiting member’s partial interest.
Tate v. Tate
Appeals court upholds valuation of minority interest in farm entities based on fair value standard of value; court notes prevailing expert specifically referenced buy-sell agreements that did not contemplate use of discounts in valuing exiting member’s partial interest.
In Wrongful Dissolution, New York’s High Court Approves FMV Valuation
In wrongful partnership dissolution, New York high court finds, under applicable statute, exiting partner’s interest may be valued under FMV standard of value; where exiting partner’s interest is minority interest, DLOM and minority discount may apply.
Congel v Malfitano (II)
In wrongful partnership dissolution, New York high court finds, under applicable statute, exiting partner’s interest may be valued under FMV standard of value; where exiting partner’s interest is minority interest, DLOM and minority discount may apply.
Courts Find Minority Discount Unwarranted Under Facts of Case
In valuing owner-spouse’s minority interest in LLC, trial court “would have been well within its discretion to apply a minority discount,” appeals court says, but it was not error for trial court to reject a discount based on certain questionable actions related to the owner’s interest.
Cobane v. Cobane
In valuing owner-spouse’s minority interest in LLC, trial court “would have been well within its discretion to apply a minority discount,” appeals court says, but it was not error for trial court to reject a discount based on certain questionable actions related to the owner’s interest.
Trial Court’s Stock Valuation Contravenes Agreement’s Buyout Provisions
In shareholder dispute over minority owner’s stock buyout, appeals court finds trial court’s sole reliance on five-year-old valuation and its rejection of appraiser’s recent valuation violates parties’ shareholder agreement and requires revaluation.
R. Kashmiry & Assocs. v. Ellis
In shareholder dispute over minority owner’s stock buyout, appeals court finds trial court’s sole reliance on five-year-old valuation and its rejection of appraiser’s recent valuation violates parties’ shareholder agreement and requires revaluation.
Hornberger v. Dave Gutelius Excavating, Inc.
Valuation of shares of terminated stockholder based on shareholder agreement that requires calculation of adjusted net book value and specified adjustments may include discounts, where discounts are consistent with industry practice, appellate court says.
Industry Practice Supports Discounts in Stock Redemption Valuation
Valuation of shares of terminated stockholder based on shareholder agreement that requires calculation of adjusted net book value and specified adjustments may include discounts, where discounts are consistent with industry practice, appellate court says.
Matter of Levine v Seven Pines Assoc. Ltd. Partnership
In partnership dispute, New York appellate court, citing precedent, approves of use of marketability discount in fixing the fair value of the limited partner’s interest in real estate holding company; however, court rejects use of a minority discount.
New York Court Validates DLOM in Real Estate Holding Company Valuation
In partnership dispute, New York appellate court, citing precedent, approves of use of marketability discount in fixing the fair value of the limited partner’s interest in real estate holding company; however, court rejects use of a minority discount.
Vedros v. Vedros
Court says discounting for lack of marketability of minority interest in home healthcare agency, operating as an S corporation, is appropriate where LLC agreement included transfer restrictions and partners were not planning to buy out owner spouse.
Facts Support Discounts in Valuation of Small Healthcare Agency
Court says discounting for lack of marketability of minority interest in home healthcare agency, operating as an S corporation, is appropriate where LLC agreement included transfer restrictions and partners were not planning to buy out owner spouse.
In Big Buyout Ruling, Minnesota Court Rejects DLOM in Calculating Fair Value
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.
Eleventh Circuit Affirms Tax Court’s Valuation of Trust’s Interest in LLC
Affirming FMV conclusion, appeals court says Tax Court did not err in focusing less on details of methodology parties’ appraisers used than on larger issue of whether hypothetical seller would be able to force distribution of majority of LLC’s assets.
New Tennessee law streamlines DLOM use in divorce valuation
When and whether to apply a discount for marketability in divorce valuations has been an open question in Tennessee, owing to some confusing court rulings. However, a recent amendment to the Tennessee Code seeks to provide clarity to valuators handling divorce cases in this jurisdiction.
In Big Buyout Ruling, Minnesota Court Rejects DLOM in Calculating Fair Value
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.
Lund v. Lund (I)
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.