In Controversial Move, High Court Strikes Active Appreciation Rule
State high court says plain language of property distribution statute does not permit reclassification of nonmarital property as marital property under active appreciation doctrine; court invalidates doctrine and overrules body of case law applying it.
Court Rejects Bright-Line Rule for Valuing Appreciation of Nonmarital Assets
Marital estate only has claim to increased value of stock from company for which owning spouse works if nonowning spouse can show owner’s active effort “to move the appreciation value from the nonmarital category to the marital one,” appeals court affirms ...
Ohio Appeals Court Clarifies Provision on Tax Affecting at Divorce
Appeals court says consideration of tax consequences related to owner-spouse’s business is “too speculative” because owner has no plan to sell in near future; trial court improperly assumed current tax rates and business interests would remain constant.
Comparable Transaction Exposes Error in Court’s Enterprise Goodwill Ruling
Appeals court strikes divorce ruling adopting income-based valuation of enterprise value of owner’s financial services business, valuation conflicts with data from similar transaction that occurred close to valuation date and involved owner-spouse.
Moore v. Moore
State high court says plain language of property distribution statute does not permit reclassification of nonmarital property as marital property under active appreciation doctrine; court invalidates doctrine and overrules body of case law applying it.
Witt-Bahls v. Bahls
Marital estate only has claim to increased value of stock from company for which owning spouse works if nonowning spouse can show owner’s active effort “to move the appreciation value from the nonmarital category to the marital one,” appeals court affirms ...
Service Business Valuation Triggers Double-Dip Rule
New York appellate court finds trial court’s spousal support determination violated double counting rule where expert valued husband’s solely owned engineering company based on an income approach and the business was a service business.
South Carolina Supreme Court Makes New Law on Business Goodwill
In a first, state high court “cautiously” decides enterprise goodwill is marital property subject to equitable division and affirms that personal goodwill is not; court rejects claim that only professionals can develop personal goodwill in a business.
Different Ways to Find No Claim to Enhanced Value of Nonmarital Asset
Appeals court says trial court erred in interpreting prenuptial agreement but reached correct result when it rejected wife’s claim to enhanced value of husband’s separate interest in car dealership by ruling appreciation in value was passive, not active.
Nieman v. Nieman
Appeals court says consideration of tax consequences related to owner-spouse’s business is “too speculative” because owner has no plan to sell in near future; trial court improperly assumed current tax rates and business interests would remain constant.
In re Marriage of Johnson
Appeals court strikes divorce ruling adopting income-based valuation of enterprise value of owner’s financial services business, valuation conflicts with data from similar transaction that occurred close to valuation date and involved owner-spouse.
Gifford v Gifford
New York appellate court finds trial court’s spousal support determination violated double counting rule where expert valued husband’s solely owned engineering company based on an income approach and the business was a service business.
Moore v. Moore
In a first, state high court “cautiously” decides enterprise goodwill is marital property subject to equitable division and affirms that personal goodwill is not; court rejects claim that only professionals can develop personal goodwill in a business.
Court Infers Nature of Goodwill From Nature of Business
Appeals court affirms trial court’s valuation, which implicitly assigned goodwill to business, finding that since the company was not a professional practice it is likely that the company’s, rather than the owner spouse’s, reputation brings in business.
Berg v. Young
Appeals court says trial court erred in interpreting prenuptial agreement but reached correct result when it rejected wife’s claim to enhanced value of husband’s separate interest in car dealership by ruling appreciation in value was passive, not active.
Court Validates Zero Goodwill for Naturopathic Practice
State high court affirms trial court’s determination that husband’s naturopathic practice had zero goodwill value based solely on husband’s testimony that a similar practice in the area failed to attract a buyer despite being on the market for a year.
No Automatic Bar to Minority Discount in Divorce Cases
Appeals court says state law does not bar use of minority share discount in divorce cases and declines to impose a bright-line rule; rather, the trial court has to consider interest holder’s level of control and likelihood of sale before use of discount.
Rabe v. Rabe (II)
Appeals court affirms trial court’s valuation, which implicitly assigned goodwill to business, finding that since the company was not a professional practice it is likely that the company’s, rather than the owner spouse’s, reputation brings in business.
Reedy-Huffman v. Huffman
State high court affirms trial court’s determination that husband’s naturopathic practice had zero goodwill value based solely on husband’s testimony that a similar practice in the area failed to attract a buyer despite being on the market for a year.
Callahan v. Callahan
Appellate court says trial court did not double dip where it predicated its alimony order on husband’s general earning capacity, independent of husband’s employment at companies that were marital assets subject to property division.
Court Rejects Double-Dip Claim, Emphasizing Owner’s General Earning Capacity
Appellate court says trial court did not double dip where it predicated its alimony order on husband’s general earning capacity, independent of husband’s employment at companies that were marital assets subject to property division.
Schickner v. Schickner
Appeals court says state law does not bar use of minority share discount in divorce cases and declines to impose a bright-line rule; rather, the trial court has to consider interest holder’s level of control and likelihood of sale before use of discount.
Corning v. Corning
The appellant in this case, the wife, appealed the trial court order for equitable distribution and alimony. The crux of the issues revolved around the values and date of value of two businesses owned by the parties and awarded to the husband in the distribution order. The appellate court affirmed the lower court’s orders.
North Carolina Appellate Court Affirms Trial Court Appeal of Valuation of Businesses Divorce
The appellant in this case, the wife, appealed the trial court order for equitable distribution and alimony. The crux of the issues revolved around the values and date of value of two businesses owned by the parties and awarded to the husband in the distribution order. The appellate court affirmed the lower court’s orders.
Court Deems Treatment of S Corp Undistributed Income ‘Problematic’
Court rejects expert’s “excess working capital” analysis to determine income for child support purposes saying it conflicts with state statute’s requirement to rely on historical practices when assessing legitimacy of undistributed earnings of an S corp.