Find out what DLOM methods are used the most
By our count, there are almost 75 methods for estimating a discount for lack of marketability (DLOM), and more are in the works.
Update to ‘Stout Restricted Stock Study Companion Guide’
The most widely used restricted stock transaction database for providing empirical support for a discount for lack of marketability (DLOM) is the Stout Restricted Stock Study (formerly FMV Opinions).
Expert’s Detailed Risk Analysis Bolsters Use of Deep Discount in Law Firm Valuation
In buyout dispute over law firm interest, court credits firm’s expert, noting his extensive relevant experience, his taking care to value interest under fair market value standard, as required by the partnership agreement, and his detailed risk analysis to support a deep discount.
Fredericks Peebles & Morgan LLP v. Assam
In buyout dispute over law firm interest, court credits firm’s expert, noting his extensive relevant experience, his taking care to value interest under fair market value standard, as required by the partnership agreement, and his detailed risk analysis to support a deep discount.
In re Marriage of Preston
In divorce case, appellate court upholds valuation based on opinion of husband’s expert using MUM method to separate total goodwill value into personal and enterprise components; court also upholds use of small marketability discount where owner spouse is the sole owner of the company.
Court Favors MUM Method for Goodwill Allocation in Illinois Divorce Case
In divorce case, appellate court upholds valuation based on opinion of husband’s expert using MUM method to separate total goodwill value into personal and enterprise components; court also upholds use of small marketability discount where owner spouse is the sole owner of the company.
BVLaw case update: buyout disputes
Even when the members of a business entity plan ahead for a potential buyout, a lot can still go wrong, often because the language in a controlling shareholder agreement leaves too much room for interpretation or a necessary corporate document is missing.
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.
Read this case before writing your next valuation report
Not long ago, we were at a conference where the speaker asked the audience whether anyone was familiar with the Gallagher case.
Three different court rulings on the use of discounts in the divorce context
Case law matters. Every month, BVLaw analyzes the most noteworthy court decisions dealing with valuation and damages issues. Subscribers should check out digests of three recent divorce rulings different state courts issued. All the cases dealt with the issue of whether it was appropriate to discount the owner-spouse’s interest in a closely held business.
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.
This Short Paragraph Can Bolster the DLOM Section in Your Next Report
Are you using a simple “benchmark average approach” for your analysis of a discount for lack of marketability (DLOM)? That type of analysis may have passed muster years ago, but times have changed.
BVU News and Trends May 2018
A monthly roundup of key developments of interest to business valuation experts.
Tenn. Appeals Court says DLOM in divorce appropriate under facts of case
A recent Tennessee appeals court decision found that the trial court presiding over a drawn-out divorce had discretion to apply a marketability discount when it valued the owner-spouse’s interest in two companies in 2016.
Tennessee appeals court allows slight DLOM in divorce case
Valuators working on divorce cases in Tennessee know that the jurisprudence on the use of the marketability discount has been nebulous.
New York’s high court OKs minority discount in wrongful dissolution context
New York’s highest court recently weighed in on a long and ugly partnership dispute in which a minority shareholder had unilaterally dissolved the partnership.
Stout updates Restricted Stock Study and Calculator
The most widely used restricted stock transaction database is the Stout Restricted Stock Study™ (formerly FMV Opinions), which is updated quarterly and contains 780-plus screened transactions with up to 60 data fields.
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.