Key Points From Hitchner’s Annual BV Update
A recap of Jim Hitchner’s look at the major issues in BV over the past year, including long-term growth rates, the three-stage DCF, normalizing the risk-free rate, cost of capital, plagiarism, lack of liquidity on a 100% interest, and more.
Tax Valuations Are the Main Profit Driver for BV Firms, Per BVR Survey
Valuations for income, estate, and gift tax purposes are the most profitable for business valuation firms, according to a BVR survey. These valuations leap-frogged over litigation services and valuations for transactions/M&A purposes, which topped the list in 2018.
BV News and Trends March 2024
A monthly roundup of key developments of interest to business valuation experts.
For a valuation via arbitration, final means final
In a California case, the company that owns the Woodlands grocery store chain decided to buy the condominiums it was renting for its San Francisco store.
Live today! SCOTUS arguments in the COLI valuation case
A live audio feed of oral arguments to the U.S. Supreme Court in the Connelly case will be broadcast today, March 27.
COLI valuation case now on SCOTUS’ calendar
March 27 is the date the U.S. Supreme Court will hear arguments in the Connelly case, according to the court’s calendar.
Basic assumption drives valuers way apart
In an Illinois divorce case, different fundamental assumptions about the husband’s picture frame business yielded greatly disparate values from the two experts.
What Valuers Should Do While SCOTUS Mulls Connelly
Regardless of how the U.S. Supreme Court rules in the Connelly case, there are some steps valuers can take to better help their client business owners, many of whom could be sitting on ticking time bombs. The issue before SCOTUS is how does corporate-owned life insurance designed to fund the redemption of a deceased shareholder’s stock impact the fair market value of the subject company and the value of the decedent’s gross estate.
Hitchner’s annual review of need-to-know BV topics
Over 500 attendees listened to Jim Hitchner (Valuation Products and Services) do his annual review of recent need-to-know concepts, data, models, and methods in business valuation. Here are a few key points from the two-hour webinar.
Hardiman v. Woodlands Store, Inc.
This appeal in a California court involved a dispute over an appraisal of the plaintiffs’ 15% interest in a grocery store the defendant operated. The plaintiffs alleged that the award of the superior court was obtained by fraud and that the arbitrator prejudiced their rights. The appellate court found no basis for “disturbing” the appraisal-arbitration award.
Appellate Court (California) Declines to Set Aside Appraisal and Decision of Arbitrator
This appeal in a California court involved a dispute over an appraisal of the plaintiffs’ 15% interest in a grocery store the defendant operated. The plaintiffs alleged that the award of the superior court was obtained by fraud and that the arbitrator prejudiced their rights. The appellate court found no basis for “disturbing” the appraisal-arbitration award.
Today! Hitchner’s annual BV update webinar
BVWire looks forward to Jim Hitchner’s annual webinar where he reviews new concepts, data, models, and methods that have emerged in business valuation over the past year.
In re Rozdolsky
In this complex Illinois divorce case, the appellate court affirmed the valuation of the husband’s business. The trial court had already reduced the wife’s expert’s valuation by 30%. Overall, the husband raised nine issues on appeal, including having to contribute to the wife’s attorney’s and expert fees, resulting from the husband’s lack of cooperation in discovery.
Illinois Appellate Court Affirms Valuation of Marital Business
In this complex Illinois divorce case, the appellate court affirmed the valuation of the husband’s business. The trial court had already reduced the wife’s expert’s valuation by 30%. Overall, the husband raised nine issues on appeal, including having to contribute to the wife’s attorney’s and expert fees, resulting from the husband’s lack of cooperation in discovery.
Smith v. Smith
In this divorce case appeal, the appeals court remanded to the Chancery Court the issue of separate versus marital property. The appellate court determined that one of the husband’s businesses was marital property and not separate property as the Chancery Court decided. It remanded that portion of the Chancery decision with instructions to change the ruling and determine a value for the now marital property business—but without any goodwill.
Appellate Court (Mississippi) Affirms That Goodwill Is Not a Marital Asset
In this divorce case appeal, the appeals court remanded to the Chancery Court the issue of separate versus marital property. The appellate court determined that one of the husband’s businesses was marital property and not separate property as the Chancery Court decided. It remanded that portion of the Chancery decision with instructions to change the ruling and determine a value for the now marital property business—but without any goodwill.
Valuation Impact of Corporate-Owned Life Insurance on SCOTUS’ Agenda
The goal of this paper is to inform readers about a valuation issue that is the subject of a petition put before the United States Supreme Court to resolve a circuit split. The issue is how does corporate-owned life insurance designed to fund the redemption of a deceased shareholder’s stock impact the fair market value of the subject company and the value of the decedent’s gross estate. The author examines the applicable U.S. Tax Court, district court, and two appellate decisions so the reader can understand the arguments made and the basis for the legal conclusions.
BVLaw Review: The Top Valuation Cases of 2023
The BVLaw platform added approximately 70 cases during 2023, bringing the total to about 4,300 cases in the database. The cases are all related in some way to valuation, economic damages and lost profits, and other litigation. This article is a rundown of some of the more important cases for 2023.
Connelly case kicks off Heckerling conference
At the Heckerling Institute on Estate Planning in Orlando, Fla., earlier this month, the first session was a panel on key court cases of 2023, and “valuation was top of mind for many federal courts,” according to coverage in WealthManagement.com.
Cronan v. Cronan
This case concerned an appeal of a family court magistrate’s decision as to the value of marital assets and the distribution thereof and denial of alimony to the wife. The plaintiff, the husband, is a physician shareholder in a medical imaging practice. The practice had a shareholder agreement that provided for the price to buy into and sell out of the practice. The wife’s expert determined the value of the husband’s shares under the fair market value standard but the trial court and supreme court went with the agreement value.
Rhode Island Supreme Court Affirms Value of Interest in Medical Practice Per Shareholder Agreement and Equitable Distribution of Assets
This case concerned an appeal of a family court magistrate’s decision as to the value of marital assets and the distribution thereof and denial of alimony to the wife. The plaintiff, the husband, is a physician shareholder in a medical imaging practice. The practice had a shareholder agreement that provided for the price to buy into and sell out of the practice. The wife’s expert determined the value of the husband’s shares under the fair market value standard but the trial court and supreme court went with the agreement value.
Grabowski analyzes COLI valuation issue SCOTUS will decide
The U.S. Supreme Court has agreed to hear a case involving a valuation issue in order to resolve a circuit split.
In re Marriage of Bornhofen
In this Illinois divorce case, the trial court adopted the value of the husband’s expert as to the value of the husband’s business and rejected the wife’s expert’s value. The trial court determined that the husband’s expert’s value was the only credible value. The wife sought to introduce additional valuation evidence, which the trial court also rejected. The appellate court affirmed the decision of the trial court.
Appellate Court (Illinois) Affirms Trial Court’s Rejection of One Expert’s Business Value and Adopts the Other Expert’s Value
In this Illinois divorce case, the trial court adopted the value of the husband’s expert as to the value of the husband’s business and rejected the wife’s expert’s value. The trial court determined that the husband’s expert’s value was the only credible value. The wife sought to introduce additional valuation evidence, which the trial court also rejected. The appellate court affirmed the decision of the trial court.
BV News and Trends November 2023
A monthly roundup of key developments of interest to business valuation experts.