Perry v. Sackett
In case of voluntary corporate dissolution under judicial supervision, appeals court finds receiver’s minimum bid value was based on correct standard of value (liquidation value) and calculated auction sales price reflected all elements of a going concern ...
Compromised Asset Appraisals Undo Like-Kind Tax Plan
Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”
Commercial Reasonableness: Defining Practical Concepts and Determining Compliance in Healthcare Transactions for Physician Services
Financial relationships between hospitals and physicians must be both commercially reasonable and at fair market value (FMV) to meet certain regulatory requirements. Ensuring compliance with these requirements is critical--failing to do so could invoke sanctions and penalties related to the Stark Law, the Anti-Kickback Statute, the False Claims Act (FCA), and Internal Revenue Service 501(c)(3) status for tax-exempt entities. As such, a thorough understanding of these requirements is necessary to ensure compliance in transactions between hospitals and physicians, as well as other parties with referral relationships within the healthcare environment.
Persuasive’ Defense Expert Testimony Defeats ESOP Overpayment Claims
Court says defense expert opinion provides “credible and persuasive” support for court’s conclusion that ESOP financial advisor produced sound fairness and valuation opinions prior to contested transaction; there was no overpayment for stock at issue.
Compromised Section 1031 appraisal sinks Exelon tax strategy for fossil fuel power plant sale
U.S. Tax Court Judge David Laro frequently has cautioned experts not to give in to hiring attorneys who want to shape the appraisal. Although federal and state discovery rules offer some protection for attorney-expert communication, there is a risk of exposure and with it a risk of damage to the expert’s work product and reputation. A recent Section 1031 case, which Judge Laro handled, illustrates what happens when the communication is discovered.
Holder v. Howe
Court rejects expert’s movie valuation based on percentage of cost of making it; market data approach is “particularly unsuitable” because simply averaging price of films and cost to create them does not yield information about value of particular film.
Market Data Approach ‘Particularly Unsuitable’ to Valuing Feature Film
Court rejects expert’s movie valuation based on percentage of cost of making it; market data approach is “particularly unsuitable” because simply averaging price of films and cost to create them does not yield information about value of particular film.
‘Dramatic’ Valuation Adjustment Justifies Equity Committee
In a rare nod to shareholder concerns, Bankruptcy Court approves formation of equity committee based on “dramatic adjustment in valuation” and inconsistent management positions as to financial health of debtors pre-Chapter 11 and post-petition filing.
Defense expert testimony supports ESOP valuation and fairness opinions
A recent ESOP decision involving allegations of breach of fiduciary duty and engaging in a prohibited transaction turned on whether the ESOP trustee’s financial advisor had performed proper due diligence and issued defensible fairness and valuation analyses.
Spouse’s Unilateral Stock Agreement Sets Value in Divorce Action
Appeals court agrees with trial court that valuation in stock agreement is binding in partition action even though non-owner spouse refused to sign agreement and agreement did not mention divorce as one of the circumstances in which valuation applied.
Debtors’ Balance Sheet Not Reliable Indicator of Assets’ Market Value
Court says debtors “appear to be hopelessly insolvent” and rejects shareholders’ call for equity committee; debtors’ prepetition published financials are not “dependable evidence” of assets’ fair market value, even if investors relied on balance sheets.
High Court Dissent Rebukes Chancery’s Analysis in Option Valuation Case
In medical company valuation case, high court affirms award to option holders based on deference owed to trial court’s findings of historical fact; dissent says Chancery’s dismissal ...
Compromised Asset Appraisals Undo Like-Kind Tax Plan
Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”
Exelon Corp. v. Commissioner
Tax Court says taxpayer’s transactions fail to meet Section 1031 requirements for income tax deferral; legal advisor’s ongoing interference with appraisal process compromised asset appraisals undergirding transactions to the point they became “useless.”
Persuasive’ Defense Expert Testimony Defeats ESOP Overpayment Claims
Court says defense expert opinion provides “credible and persuasive” support for court’s conclusion that ESOP financial advisor produced sound fairness and valuation opinions prior to contested transaction; there was no overpayment for stock at issue.
Fish v. GreatBanc Trust Co.
Court says defense expert opinion provides “credible and persuasive” support for court’s conclusion that ESOP financial advisor produced sound fairness and valuation opinions prior to contested transaction; there was no overpayment for stock at issue.
Appeals Court Signs Off on ‘Slight’ DLOM in Minority Interest Valuation
Appeals court says use of DLOM in valuing interest for divorce depends on interest’s characteristics not owner’s intent to sell the interest, but appeals court affirms trial court’s decision to apply “slight” or no DLOM based on intent to sell analysis.
Debtors’ Balance Sheet Not Reliable Indicator of Assets’ Market Value
Court says debtors “appear to be hopelessly insolvent” and rejects shareholders’ call for equity committee; debtors’ prepetition published financials are not “dependable evidence” of assets’ fair market value, even if investors relied on balance sheets.
In re Sunedison, Inc.
Court says debtors “appear to be hopelessly insolvent” and rejects shareholders’ call for equity committee; debtors’ prepetition published financials are not “dependable evidence” of assets’ fair market value, even if investors relied on balance sheets.
Delaware Supreme Court Judge Boos Chancery's Option Valuation Case Analysis
In reviewing one of the Delaware Court of Chancery's most noteworthy rulings from 2015, one judge on the state Supreme Court wrote a stinging critique of the trial court's analysis.
In Buyout, Income-Based Expert Appraisal Beats Other Value Indicators
In partnership dispute, appeals court affirms redemption award based on multiple-of-earnings valuation, finding valuation was reliable and admissible under state equivalent of Daubert and trial court had discretion to disregard other indicators of value.
In Unusual ESOP Case, 5th Circuit Validates FMV Computation
5th Circuit upholds district court’s liability and remedy findings in ESOP case; lower court’s weighting and averaging of valuation results offered by parties’ experts to compute amount of overpayment “was founded in established valuation methodology.”
Spouse’s Unilateral Stock Agreement Sets Value in Divorce Action
Appeals court agrees with trial court that valuation in stock agreement is binding in partition action even though non-owner spouse refused to sign agreement and agreement did not mention divorce as one of the circumstances in which valuation applied.
Baumboree v. Baumbouree
Appeals court agrees with trial court that valuation in stock agreement is binding in partition action even though non-owner spouse refused to sign agreement and agreement did not mention divorce as one of the circumstances in which valuation applied.
Dodgy Real Estate Valuation Compromises Dependent Business Valuation
Trial court did not err when it enforced shareholder agreement lacking purchase price and based buyout price on defense expert testimony; opposing expert committed “severe flaws in his methodology and the valuations based upon them,” appeals court says.