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.
Court Snubs Lost Earnings Analysis Based on ‘Incomplete Use’ of Data
Court rejects expert’s loss of business opportunity and lost earnings calculations, finding capitalization of earnings method is inappropriate for valuing company with unstable earnings and lost salary projections are based on “incomplete use” of data.
5th Circuit backs district court's fair market value determination in ESOP dispute
The district court's determination of overpayment was a function of the contract price and the stock’s fair market value on each of three transaction dates. For its FMV determination, the court considered the testimony of three noted valuation experts retained by the plaintiffs, the DOL, and the defendants respectively. Different experts used different methods, different assumptions, different estimates, and they reached different conclusions. But they all used multiple approaches to produce several FMV estimates on the transaction dates. To arrive at a final value determination, or range of values, they all averaged or weighted the results.
Cdx Holdings, Inc. v. Fox (Fox II)
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 of board members’ valuation testimony evinces Chancery’s hindsight bias.
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 ...
Parties’ Valuation Contract Precludes Review of Minority Discount
In share buyback case where parties agree to retain joint appraiser, whom they know from past appraisals of company, and commit to be bound by appraiser’s valuation, court declines to consider seller’s challenge to appraiser’s use of minority discount.
Demand for Executive Compensation Data Lacks ‘Proper Purpose’
Appeals court finds no error in trial court’s rejection of plaintiff’s demand for inspection of corporate records on executive compensation, where expert testimony showed information was not necessary to value plaintiff’s minority interest in company.
Grant v. Grant
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.
Perez v. Bruister (II)
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.”
‘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.
In re Horsehead Holding Corp.
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.
Lay Testimony About Offer to Buy Represents Admissible Valuation Evidence
Appeals court says nonexpert testimony on a real-world offer to buy owner-spouse’s company was relevant and, therefore, admissible because it provided valuation evidence based on market approach; court remands for rehearing on all valuation testimony.
Jafar v. Mohammed
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.