‘Fanciful’ Projections Make DCF an Unreliable Tool in Appraisal Proceeding
In statutory appraisal, Chancery decides to “defer” to deal price, citing a robust sales process and well-functioning market; petitioners’ DCF analysis was not a useful valuation tool where it was based on, “at best, fanciful” management projections.
Montana Supreme Court Remands for Failure to Assess Tax Implications
High court says trial court erred when it failed to consider tax implications where its final order appears to make sale of family ranch a necessity; evidence suggests there are no other assets with which to buy wife’s shares of ranch corporation at FMV.
In re Marriage of Broesder
High court says trial court erred when it failed to consider tax implications where its final order appears to make sale of family ranch a necessity; evidence suggests there are no other assets with which to buy wife’s shares of ranch corporation at FMV.
In Big Buyout Ruling, Minnesota Court Rejects DLOM in Calculating Fair Value
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.
SEC’s Daubert Challenge to Securities Valuation Testimony Fizzles
In an SEC case requiring valuation of restricted securities, court admits most of the testimony of parties’ experts; experts need not be specialists in given field and need not demonstrate familiarity with USPAP or SSVS to qualify under Daubert, court fin ...
Solvency Determination Turns on Income Recognition Analysis
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
Expert’s FMV Analysis Aligns With Applicable Healthcare Law
In healthcare case centering on Anti-Kickback Statute, court finds government expert’s FMV analysis of physician services, which excludes value and volume of referrals, accords with standard applying to AKS cases and is admissible under Daubert.
United States ex rel. Lutz v. Berkeley Heartlab, Inc.
In healthcare case centering on Anti-Kickback Statute, court finds government expert’s FMV analysis of physician services, which excludes value and volume of referrals, accords with standard applying to AKS cases and is admissible under Daubert.
Kardash v. Commissioner (III)
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
Appeals Court Upholds Insolvency Rulings in Transfer Liability Case
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
Eleventh Circuit Affirms Tax Court’s Valuation of Trust’s Interest in LLC
Affirming FMV conclusion, appeals court says Tax Court did not err in focusing less on details of methodology parties’ appraisers used than on larger issue of whether hypothetical seller would be able to force distribution of majority of LLC’s assets.
Court adheres to earlier ESOP liability and damages rulings
In a controversial ESOP case that turned on the trustee’s oversight of the pretransaction valuation work, the defendant trustee recently filed a motion for reconsideration. It argued the court had committed errors related to its liability and damages findings. Although the court owned up to some mistakes, including a misunderstanding of the concept of beta, it ultimately stuck to its earlier decision.
Tax Court Introduces Formula to Value Donated Remainder Interest
Tax Court rules for IRS in disallowing deduction for charitable contribution involving remainder interest in leased property; requisite appraisal summary omits vital information, and court’s valuation formula shows donor made gross valuation misstatement.
RERI Holdings I, LLC v. Commissioner (RERI I)
Tax Court rules for IRS in disallowing deduction for charitable contribution involving remainder interest in leased property; requisite appraisal summary omits vital information, and court’s valuation formula shows donor made gross valuation misstatement.
AMERICAN SOCIETY OF APPRAISERS: Business Valuation Committee Special Topics Paper #4: The “Willing Buyer” and the “Willing Seller” in Fair Market Valuea
The International Glossary of Business Valuation Terms, June 2001, developed jointly by the American Institute of Certified Public Accountants, American Society of Appraisers, Canadian Institute of Chartered Business Valuators, National Association of Certified Valuation Analysts, and Institute of Business Appraisers, defines fair market value as “The price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at ...
Trustee Liable for Inadequate ESOP Valuation Vetting
Court finds ESOP trustee liable for allowing overpayment for company shares; trustee rushed transaction and failed to scrutinize financial advisor’s valuation ignoring red flags related to projections, use of control premium, beta, rounding up of values.
Absence of Noncompete Drives Goodwill Valuation in Liquidation Sale
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 ...
ESOP Trustee Evaded Fiduciary Duties by Delegating Valuation
Court finds ESOP trustee liable for causing plan to overpay; trustee “delegated” valuation to ESOP valuator without inquiring into valuation components, including projections, and without exploring “glaring” gaps (industry analysis) in valuation report.
Brundle v. Wilmington Trust N.A. (II)
Notwithstanding errors related to the court’s liability and damages determinations, the court rejects trustee’s motion for reconsideration as an inappropriate effort to introduce new legal theories and a late attempt to present a competing damages methodo ...
Court Defends Earlier ESOP Liability and Damages Rulings
Notwithstanding errors related to the court’s liability and damages determinations, the court rejects trustee’s motion for reconsideration as an inappropriate effort to introduce new legal theories and a late attempt to present a competing damages methodo ...
In Big Buyout Ruling, Minnesota Court Rejects DLOM in Calculating Fair Value
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.
Lund v. Lund (I)
In a forced buyout, court says experts were too partisan to their clients, compromising value analysis; court performs its own valuation using DCF to determine fair value of grocery business and rejects DLOM because no unfair transfer of wealth occurs.
In re PetSmart, Inc.
In statutory appraisal, Chancery decides to “defer” to deal price, citing a robust sales process and well-functioning market; petitioners’ DCF analysis was not a useful valuation tool where it was based on, “at best, fanciful” management projections.
‘Fanciful’ Projections Make DCF an Unreliable Tool in Appraisal Proceeding
In statutory appraisal, Chancery decides to “defer” to deal price, citing a robust sales process and well-functioning market; petitioners’ DCF analysis was not a useful valuation tool where it was based on, “at best, fanciful” management projections.
Solvency Determination Turns on Income Recognition Analysis
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.