Divorce court sets valuation date that veers from state’s norm
In Kentucky, the valuation date for a marital dissolution case is generally the date of divorce. In a new case, a court did not use the date of divorce but had good reasons.
In re Baedke
There has been a long-running debate about whether a discount for lack of marketability is applicable to a 100% interest in a business. Here, the Iowa appellate court said, yes, there can be and offered prior Iowa case law to back its position. While the discount most likely represented a liquidity discount, it was nevertheless considered appropriate in Iowa.
Iowa Appellate Court Affirms Marketability Discount for a 100% Owned Business
There has been a long-running debate about whether a discount for lack of marketability is applicable to a 100% interest in a business. Here, the Iowa appellate court said, yes, there can be and offered prior Iowa case law to back its position. While the discount most likely represented a liquidity discount, it was nevertheless considered appropriate in Iowa.
No DLOC on a 50% interest, says appellate court
In a divorce matter in Indiana, the husband and wife each owned a 50% interest in a crop-dusting business.
Townsend v. Townsend
This was yet another case that emphasized the importance of the valuation expert’s responsibility to identify the amount of personal versus enterprise goodwill in a specific case.
Indiana Appellate Court Affirms the Value of Husband’s Business That Excludes Personal Goodwill but Adds Back DLOC as Parties’ Interests Must be Combined
This was yet another case that emphasized the importance of the valuation expert’s responsibility to identify the amount of personal versus enterprise goodwill in a specific case.
Delk v. Delk
The selection of a trial date in this case had further implications for the value of the husband’s business. An FDA investigation resulting in a large fine and impairment of the business was not known at the valuation date and thus was not allowed in determining the value of the business for marital estate purposes.
Kentucky Appellate Court Affirms Selection of Valuation Date and Applies Known or Knowable Concept
The selection of a trial date in this case had further implications for the value of the husband’s business. An FDA investigation resulting in a large fine and impairment of the business was not known at the valuation date and thus was not allowed in determining the value of the business for marital estate purposes.
Case Studies in the Context of Goodwill and Divorce Litigation
Valuations performed in the context of divorce litigation encounter scrutiny and challenge from opposing counsel and their experts. This puts experts in the unique situation of defending their analyses and opinions. Join expert witness and appraiser Josh Shilts as he extends his March presentation “Is there or Isn’t there Goodwill: Expert Disagreements” on the concept of Goodwill/Intangible Asset “Identification and Assessment.” Mr. Shilts will work the audience through three case studies involving unique valuation situations ...
Conde-Berrocal v. Conde
This was a companion case to the Rosenberg v. Rosenberg case, which was decided at the appellate court at the same time as this case by the same panel. Both cases dealt with personal goodwill in Florida in a multimember practice. The physician party in each case was part of the same practice and participated in the same sale of the company to a healthcare company. Personal goodwill was handled differently in each case in large part because the evidence submitted to the trial court was different.
Florida Appellate Court Affirms Trial Court’s Acceptance of Physician Spouse’s Expert in Calculating the Amount of Personal Goodwill
This was a companion case to the Rosenberg v. Rosenberg case, which was decided at the appellate court at the same time as this case by the same panel. Both cases dealt with personal goodwill in Florida in a multimember practice. The physician party in each case was part of the same practice and participated in the same sale of the company to a healthcare company. Personal goodwill was handled differently in each case in large part because the evidence submitted to the trial court was different.
Rosenberg v. Rosenberg
This case allowed the exclusion of the party’s personal goodwill as well as the personal goodwill of all of the other shareholders’ (practitioners’) personal goodwill in determining the marital asset value to be included in the marital estate. The importance was so great statewide that the appellate court certified this question for the Florida Supreme Court to consider.
Florida Appellate Court Excludes Personal Goodwill of All Physicians in a Group in Determining the Marital Asset
This case allowed the exclusion of the party’s personal goodwill as well as the personal goodwill of all of the other shareholders’ (practitioners’) personal goodwill in determining the marital asset value to be included in the marital estate. The importance was so great statewide that the appellate court certified this question for the Florida Supreme Court to consider.
Hypothetical liquidation KO’d in shareholder dispute
In an Iowa case, minority owners of a family farm were to be bought out and the experts for both sides agreed that the net asset method was the appropriate way to value the operation.
In re Gerber
The court-appointed valuation expert in this divorce case determined a control value by deducting a discounted minority interest value from the 100% fair market value. Both the trial court and appellate court accepted this methodology.
Illinois Court Adopts Valuation of Its Own Expert—Determines Control Value by Deducting Discounted Minority Value
The court-appointed valuation expert in this divorce case determined a control value by deducting a discounted minority interest value from the 100% fair market value. Both the trial court and appellate court accepted this methodology.
Athea v. Athea
In this divorce case, the Florida appellate court upheld the trial court’s acceptance of the husband’s valuation expert including the exclusion of personal goodwill. The court found the valuation and exclusion well supported by evidence and thereby will not be reversed. The court remanded the determination of monthly income of the wife.
Appellate Court Upholds Exclusion of Personal Goodwill—Well Supported
In this divorce case, the Florida appellate court upheld the trial court’s acceptance of the husband’s valuation expert including the exclusion of personal goodwill. The court found the valuation and exclusion well supported by evidence and thereby will not be reversed. The court remanded the determination of monthly income of the wife.
Walker v. Daniels
The appellate court was left with two questions: what was the proper date of valuation for the minority shares and what was the proper value of the shares. Three brothers were in a dispute with their two sisters. The sisters were to receive compensation in the form of a buyout of their shares in a shareholder oppression dispute. The appellate court (Iowa) concurred with the trial court and affirmed its judgment.
Iowa Appellate Court Affirms Date of Value and Value of Farming Operation in Shareholder Oppression Suit
The appellate court was left with two questions: what was the proper date of valuation for the minority shares and what was the proper value of the shares. Three brothers were in a dispute with their two sisters. The sisters were to receive compensation in the form of a buyout of their shares in a shareholder oppression dispute. The appellate court (Iowa) concurred with the trial court and affirmed its judgment.
Court opts not to split the difference in disparate valuations
Often, courts take the middle ground when faced with two disparate valuations, but, in an Ohio divorce case, the court did not do that.
Court’s valuation is out of bounds
In an Indiana divorce case, the subject company was a gift shop and boutique the wife owned.
Absent any valuation, court uses book value
In an Ohio divorce case, neither the husband nor the wife engaged a valuation expert to appraise the family business, a small company that manufactures parts for racing cars, firearms, and paintball guns.
Bergquist v. Bergquist
The appellate court (Indiana) found that the circuit court abused its discretion when valuing the wife’s business by not determining a value based on there being no evidence that would support such a value. The appellate court remanded the issue of the value of the business for determination based on evidence that would support it.
Indiana Appellate Court Remands to Revalue Wife’s Business Supported by the Evidence
The appellate court (Indiana) found that the circuit court abused its discretion when valuing the wife’s business by not determining a value based on there being no evidence that would support such a value. The appellate court remanded the issue of the value of the business for determination based on evidence that would support it.