BV News and Trends July 2021
A monthly roundup of key developments of interest to business valuation experts.
Valuers and Attorneys Advise How to Stay Out of Daubert Trouble
Several sessions at the inaugural BVR National Economic Damages Virtual Conference discussed how valuation experts can avoid the nightmare of having their testimony excluded in court. Of course, much of that applies to any type of case, not just damages.
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An unpublished opinion from the Kentucky Court of Appeals provides important insight into the court’s thinking as to the goodwill analysis trial courts must perform under the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.
In Jackson case, Tax Court dismisses IRS expert’s revenue projections as ‘simply not reasonable’
When Michael Jackson died, his image and likeness was besmirched and yet, once competent executors took charge, they were able to make a lot of money for the estate in the immediate post-death years. The issue was to what extent this subsequent development could factor into the image-and-likeness valuation. In explaining his high valuation, the IRS’ expert offered a theory of “foreseeable opportunities” that the U.S. Tax Court found unpersuasive.
Discounts inappropriate under controlling agreement, appeals court finds
In a buyout dispute involving a limited liability company, the Oregon Court of Appeals recently overturned a trial court’s decision to apply discounts when valuing the departing member’s minority interest.
Interesting question on the Michael Jackson case
There were three main valuation matters in the case of the Michael Jackson estate versus the IRS, and the estate prevailed in two of them (see our most recent coverage here).
ESOP litigation has become ‘risky business,’ says Alerding
As BVWire recently reported, the latest development in the long-running Brundle ESOP litigation is a lawsuit the trustee has filed against the very ESOP appraiser it once had hired to work on the case.
Van Vleet comments on use of SEAM in Ryan case
BVWire recently reported on the Ryan Trust v. Ryan case, a buyout dispute in which the Nebraska Supreme Court affirmed the district court’s decision to credit the valuation testimony of the expert for the late majority shareholder.
In buyout dispute, ‘downward bias’ sinks expert’s fair value determination
In a bitter buyout dispute involving a successful private family business and featuring two veteran appraisers, the Nebraska Supreme Court recently affirmed the district court’s decision to unreservedly credit the valuation testimony of the expert for the late majority shareholder.
Michael Jackson case featured on BVR ‘power panel’ July 27
Experts involved in the high-profile case involving the Michael Jackson estate versus the IRS will discuss the contentious valuation issues in the case during a BVR webinar, Power Panel: Estate of Michael J. Jackson v. Commissioner.
Another wrinkle in the Brundle ESOP case
Although the district and appellate courts in the landmark Brundle ESOP case ruled years ago against the trustee, Wilmington Trust, litigation related to the case is not over.
Tax Court resists tax affecting in Michael Jackson case
Although the U.S. Tax Court recently handed the Michael Jackson estate a decisive victory regarding the estate’s tax liability, the court did not side with the estate on tax affecting, an issue that has preoccupied valuators, many of whom are proponents of the practice, for a long time.
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.
Trial Court Fails to Consider Apportionment of Goodwill in a Marital Dissolution Case
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.
In Jackson case, Tax Court dismisses IRS expert’s revenue projections as ‘simply not reasonable’
When Michael Jackson died, his image and likeness was besmirched, and yet, once competent executors took charge, they were able to make a lot of money for the estate in the immediate post-death years.
Zoom nightmare: trial verdict overturned
Wandering pets, faux backgrounds, technical glitches, and the like are common during Zoom calls, but it’s a serious matter when it comes to remote testimony in court.
Connecticut Supreme Court clarifies double-counting rule
In a recent decision, the Connecticut Supreme Court clarified this jurisdiction approach to double counting (or double dipping).
Personal v. Enterprise Goodwill in Florida Divorce Cases: What the Appellate Courts Say
In the wake of the recent King case, this is an analysis of marital dissolution case law from the Florida Supreme Court and the five District Courts of Appeal (DCA) of Florida that relates to the valuation of personal and enterprise goodwill in that state.
Court of Chancery adopts deal price, adjusting for synergies and tax savings
In a statutory appraisal action, the Delaware Court of Chancery recently adopted the deal price minus synergies as the best indicator of fair value.
Tax Court issues highly anticipated ruling in Michael Jackson case
In the long-running litigation between the estate of the late megastar Michael Jackson and the Internal Revenue Service, the U.S. Tax Court recently issued its opinion on the value of Jackson’s image and likeness, as well as the value of his interest in two music publishing assets. Overall, this much-anticipated decision is a major win for the Jackson estate. The court’s momentous decision includes an expansive analysis of the rivaling valuation testimony.
In re Appraisal of Regal Entertainment Group
In a merger action involving a publicly traded company, dissenting shareholders sued for a higher value than the deal consideration. Under the applicable appraisal jurisprudence, the court calculates fair value using the deal price minus synergies and adjusting for the change in value of the target between the signing and closing of the transaction.
In Appraisal Action, Court Determines Fair Value Using Deal Price Minus Synergies and Adjusting for Increase in Value From Signing to Closing of Merger
In a merger action involving a publicly traded company, dissenting shareholders sued for a higher value than the deal consideration. Under the applicable appraisal jurisprudence, the court calculates fair value using the deal price minus synergies and adjusting for the change in value of the target between the signing and closing of the transaction.
Tax Court resists tax affecting in Michael Jackson case
Although the U.S. Tax Court recently handed the Michael Jackson estate a decisive victory regarding the estate’s tax liability, the court did not side with the estate on tax affecting, an issue that has preoccupied valuators, many of whom are proponents of the practice, for a long time.
Hitchner reveals tough questions you may get on BV standards
You should be aware of the standards all of the business valuation organizations have issued, not just your own, cautions Jim Hitchner (Financial Valuation Advisors) in the April issue of Hardball With Hitchner.
Tax Court issues highly anticipated ruling in Michael Jackson case
In the long-running litigation between the estate of the late megastar Michael Jackson and the Internal Revenue Service, the U.S. Tax Court finally issued its opinion on the value of Jackson’s name and likeness, as well as the value of his interest in two music publishing assets.