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Sneed v. Sneed

In this North Carolina appellate divorce case, the court affirmed the trial court decisions, including the determination of value of the husband’s law firm interest. The witness for the wife, who was originally a court-appointed expert, testified as to the value of the law practice and included his analysis of personal-versus-entity goodwill. Both courts included all goodwill in the marital estate as per North Carolina case law. The expert witness apparently submitted a calculation of value for his testimony.

North Carolina Court of Appeals Affirms Trial Court as to Inclusion of Personal Goodwill

In this North Carolina appellate divorce case, the court affirmed the trial court decisions, including the determination of value of the husband’s law firm interest. The witness for the wife, who was originally a court-appointed expert, testified as to the value of the law practice and included his analysis of personal-versus-entity goodwill. Both courts included all goodwill in the marital estate as per North Carolina case law. The expert witness apparently submitted a calculation of value for his testimony.

Chancery Court Determines Value of Shares by Applying Average of GPCM and DCF Methodologies

In a long and complex opinion, the Delaware Court of Chancery determined the value per share of stock in a former stockholder’s appraisal action. The per-share value was reached by ascribing equal weight to adjusted versions of the comparable companies analysis (GPCM) the stockholder advanced and the discounted cash flow analysis the company advanced. The other methodologies were rejected. The use of the GPCM represented the first use of that method in some years.

HBK Master Fund L.P. v. Pivotal Software, Inc.

In a long and complex opinion, the Delaware Court of Chancery determined the value per share of stock in a former stockholder’s appraisal action. The per-share value was reached by ascribing equal weight to adjusted versions of the comparable companies analysis (GPCM) the stockholder advanced and the discounted cash flow analysis the company advanced. The other methodologies were rejected. The use of the GPCM represented the first use of that method in some years.

Husband alleges wife foiled vet practice valuation

In a Kentucky divorce matter, the wife worked for the husband’s veterinary practice that he had purchased prior to their marriage.

Cummings v. Cummings

In this appeal of a divorce case in Kentucky, the court determined that the family court did not abuse its discretion in its distribution of the proceeds of the sale of the husband’s veterinary practice. The family court determined that most of the proceeds were enterprise goodwill and, thus, marital property.

Kentucky Court Does Not Consider Date of Marriage Value of Veterinary Practice—Most of Value Is Enterprise Goodwill and, Thus, Marital

In this appeal of a divorce case in Kentucky, the court determined that the family court did not abuse its discretion in its distribution of the proceeds of the sale of the husband’s veterinary practice. The family court determined that most of the proceeds were enterprise goodwill and, thus, marital property.

Chase v. Chase

On appeal, the husband asked the court to review whether the wife needed alimony given the assets she otherwise received in the equitable distribution and her earning capacity as a pharmacist, whether an award of rehabilitative alimony and alimony in futuro by the trial court was appropriate, and whether the trial court’s valuation of the husband’s medical practice was in error. The appellate court affirmed the trial court in all aspects reviewed and did not award legal fees to either party.

Tennessee Appeals Court Affirms Trial Court Decision on Spousal Support and on the Value of Husband’s Medical Practice

On appeal, the husband asked the court to review whether the wife needed alimony given the assets she otherwise received in the equitable distribution and her earning capacity as a pharmacist, whether an award of rehabilitative alimony and alimony in futuro by the trial court was appropriate, and whether the trial court’s valuation of the husband’s medical practice was in error. The appellate court affirmed the trial court in all aspects reviewed and did not award legal fees to either party.

Nothing personal about goodwill in dental practice

In a South Carolina divorce case, the appellate court reversed the family court on the issue of personal versus enterprise goodwill.

Bostick v. Bostick

The South Carolina Court of Appeals, in this divorce case, reversed the family court and included all goodwill of a dentistry practice as enterprise goodwill includable in the marital estate. The family court had included all of the goodwill as personal goodwill not part of the marital estate. The Court of Appeals also reduced the temporary monthly alimony.

Appellate Court Reversed Decision and Treated All Goodwill as Enterprise Goodwill Includable in the Marital Estate

The South Carolina Court of Appeals, in this divorce case, reversed the family court and included all goodwill of a dentistry practice as enterprise goodwill includable in the marital estate. The family court had included all of the goodwill as personal goodwill not part of the marital estate. The Court of Appeals also reduced the temporary monthly alimony.

In re Marriage of Brown

In this Illinois divorce case, the appellate court affirmed the circuit court’s determination of value of the husband’s business by the husband’s expert even though evidence was presented that the expert did not follow the AICPA Business Valuation Standards. Further, the husband’s expert did not consider any enterprise goodwill and used an unorthodox method to determine the value of the business. The wife’s expert asserted that the husband’s expert did not provide a fair market value but rather did a “calculation.” The appellate court also affirmed the circuit court’s decision not to exclude the testimony of the husband’s expert witness.

Illinois Appellate Court Does Not Accept Valuation Including Enterprise Goodwill

In this Illinois divorce case, the appellate court affirmed the circuit court’s determination of value of the husband’s business by the husband’s expert even though evidence was presented that the expert did not follow the AICPA Business Valuation Standards. Further, the husband’s expert did not consider any enterprise goodwill and used an unorthodox method to determine the value of the business. The wife’s expert asserted that the husband’s expert did not provide a fair market value but rather did a “calculation.” The appellate court also affirmed the circuit court’s decision not to exclude the testimony of the husband’s expert witness.

Adewopo v. Jaja

In this divorce matter, the Indiana appellate court included enterprise goodwill of the wife’s business in the marital estate. The court-appointed, at the husband’s request, expert testified as to his conclusion of value using an income approach and calculating the amount of enterprise goodwill while excluding personal goodwill. The wife objected to the expert’s value but provided no evidence of her own determination of value.

Indiana Appellate Court Includes Enterprise Goodwill of Wife’s Businesses in Marital Estate

In this divorce matter, the Indiana appellate court included enterprise goodwill of the wife’s business in the marital estate. The court-appointed, at the husband’s request, expert testified as to his conclusion of value using an income approach and calculating the amount of enterprise goodwill while excluding personal goodwill. The wife objected to the expert’s value but provided no evidence of her own determination of value.

Letter to the Editor: A New Development in Personal Goodwil

Remarks and comments from BVR’s legal editor on a previous article that discussed Florida’s proposed legislation to clarify the value of goodwill in the marital interest of closely held businesses.

How to Explain Personal Goodwill to a Trier of Fact for a Divorce Valuation

This is an excerpt from the author’s upcoming sixth edition of Understanding Business Valuation, which will be available from BVR in early 2022.

Florida’s Proposed Change to Goodwill Could Set a Precedent

The Family Law Section of the Florida Bar is proposing legislation to clarify the value of goodwill in the marital interest of closely held businesses. The authors envision that this proposed legislation could set a precedent for future family law matters throughout the United States.

Asset vs. income approach for valuing goodwill in Tennessee

In Tennessee, personal goodwill is not a marital asset that can be divided between the divorcing parties.

Recap of recent BV cases of note

A number of recent cases have emerged that contain various valuation issues.

Cela v. Cela

The Appellate Court (AC) upheld the trial court’s decision to accept the value under the income approach adjusted for the exclusion of personal goodwill. The expert for the wife (business owner) had used the asset approach reasoning that all goodwill was personal. The trial court and the AC rejected that approach.

Appellate Court Upholds Decision to Use Income Approach and Reduce Personal Goodwill

The Appellate Court (AC) upheld the trial court’s decision to accept the value under the income approach adjusted for the exclusion of personal goodwill. The expert for the wife (business owner) had used the asset approach reasoning that all goodwill was personal. The trial court and the AC rejected that approach.

Kentucky appeals court explains state’s goodwill law

An unpublished opinion from the Kentucky Court of Appeals provides important insight into the court’s thinking as to the goodwill analysis trial courts must perform under the applicable state law when valuing business entities.

Maginnis v. Maginnis

In this unpublished opinion, the Kentucky Appellate Court remanded the decision as to the value of the husband’s business for, among other things, the Family Court’s failure to consider an apportionment of goodwill between enterprise and personal goodwill. It also remanded for a reconsideration of the maintenance award to the wife since that award is based in part on the value of the business and the income of the husband.

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