In re Burg
The debtor withheld records and failed to explain missing assets and deleted records and misled the court as to what he did with certain assets. The debtor also knowingly and fraudulently withheld records from the trustee. This was all part of a scheme the debtor devised with the help of a “consultant” to avoid repaying the plaintiff creditors.
Bankruptcy Court Denies Debtor Discharge for Fraud, Failure to Produce Records and Fraudulent Transfers
The debtor withheld records and failed to explain missing assets and deleted records and misled the court as to what he did with certain assets. The debtor also knowingly and fraudulently withheld records from the trustee. This was all part of a scheme the debtor devised with the help of a “consultant” to avoid repaying the plaintiff creditors.
Internal billings trigger M&A damages; GPCM prevails
A case in Delaware Chancery Court shows that the court will not award damages from an M&A transaction gone bad when the calculations are based on speculative lost synergies.
NetApp, Inc. v. Cinelli
The defendant hid improper recording of revenue from use of internal software in unaudited financial statements that were represented to be GAAP-compliant. The defendant was held to have breached the merger/sale contract in a manner that resulted in fraud. The plaintiff was awarded damages. The court accepted the expert’s GPCM as the most “responsible estimate” of the private company’s value as it was presented to the plaintiff.
Seller Breached Terms of Merger Agreement Including That Statements Were GAAP-Compliant—Expert’s GPCM Accepted
The defendant hid improper recording of revenue from use of internal software in unaudited financial statements that were represented to be GAAP-compliant. The defendant was held to have breached the merger/sale contract in a manner that resulted in fraud. The plaintiff was awarded damages. The court accepted the expert’s GPCM as the most “responsible estimate” of the private company’s value as it was presented to the plaintiff.
Business Valuation Case Law Yearbook, 2023 Edition
January 2023 PDF, Softcover (195 pages)
BVR (editor)
Business Valuation Resources, LLC
Takeaways from the final big BV event of 2022
The beach or the ski slope? Those were the options for attendees who ventured out to either Park City, Utah, or Fort Lauderdale, Fla., for the NACVA Business Valuation & Financial Litigation Super Conference last week.
Look Under the Covers: Finding Assets and Income for a Divorce Valuation
Have you ever wondered how Business Valuation and Forensic analysis intercept? We know that financial data in a company’s books and records may not tell the entire story. But do you know how to analyze it to make your valuation more meaningful? This webinar will give you the steps to begin to unravel and follow the money which could lead to more accurate results.
Key Lesson to Be Learned From Valuing a Strip Club
A strip club may bare all, but not when it comes to every bit of information an analyst needs to do a valuation. The trick is knowing the right questions to ask to discover these hidden factors that may impact value, and that goes for other types of businesses as well.
Highlights From the 2022 NYSSCPA BVLS Conference
Money laundering, earnouts, valuing debt, and SPAC enforcement are a few of the topics presented at the Business Valuation and Litigation Services (BVLS) conference hosted by the New York State Society of CPAs. Here are some key takeaways.
Valuing Nightclubs, Bars, and Adult Cabarets
That’s the title of the latest installment in BVR’s What It’s Worth series of industry-specific valuation guides.
BV News and Trends May 2022
A monthly roundup of key developments of interest to business valuation experts.
The Long Arm of the Bankruptcy Court: Valuation in Fraudulent Transfer Matters
When a company files for bankruptcy, the first analysis is to determine what the company has and what the company owes as of the filing date. Next is a thorough analysis of what had been paid out of the company before the filing date to determine whether such payments can be clawed back into the estate for the benefit of creditors. Payments made within 90 days of the filing may automatically be considered preferential. Beyond ...
The first thing to look at in a strip club
When valuing an adult entertainment venue or nightclub, one of the most important things to examine is the point-of-sale (POS) system.
Business Valuation Case Law Yearbook, 2022 Edition
January 2022 PDF, Softcover (177 pages)
BVR (editor)
Business Valuation Resources, LLC
The legal coverage and in-depth analysis from the BVR legal team deliver lessons learned to help appraisers reach better and more defensible valuation conclusions. All the cases featured in this book impart important lessons about applicable legal principles, approved and discredited valuation methodology, and the act (and art) of presenting expert opinions. This must-have collection benefits both the generalist as well as the specialist.
Learn more >>
Global BV News and Trends December 2021
Business valuation news from a global perspective.
Appellate court KOs unaccrued interest on dissipated assets
In a divorce case, an appellate court vacated the order of the trial court that erroneously charged the husband with over $4 million in unaccrued interest on marital assets that the husband fraudulently dissipated from the marital estate.
Global BV News: Most large firms suffer major impact from illicit activity
Kroll’s Global Fraud and Risk Report reveals that 57% of respondents at companies with a turnover of more than $15 billion reported a very significant impact of illicit activity, such as fraud, corruption, and money laundering, on their organization, with a further quarter (25%) describing the impact as somewhat significant.
Paganelli v. Lovelace
This case resulted in the court issuing a partial summary judgment in favor of the defendant (and counterclaimant) in a matter regarding a sale/purchase contract between the plaintiff and the defendant. The cross-allegations resulted from the defendant allegedly breaching the purchase contract, while the defendant alleged that the plaintiff first breached the contract and committed fraud in entering into the contract.
Court Issues Partial Summary Judgment in Favor of Party Alleging Breach of Contract
This case resulted in the court issuing a partial summary judgment in favor of the defendant (and counterclaimant) in a matter regarding a sale/purchase contract between the plaintiff and the defendant. The cross-allegations resulted from the defendant allegedly breaching the purchase contract, while the defendant alleged that the plaintiff first breached the contract and committed fraud in entering into the contract.
Mohen v. Mohen
In the trial court (TC), the wife was awarded $4,360,158 of mostly unaccrued interest on the corpus of trusts the husband set up unilaterally for the children. The TC took the value of those trusts, $9,291,372, as part of the marital estate. The TC also added $990,945 of interest that the trusts had received and the remaining unaccrued future interest for a total value of “distribution” paid to the husband of $14,642,475 related to the trusts. The appellate court (AC) determined that the future interest was future interest and, thus, not part of the marital estate. However, the AC let stand the determination that the value of the trusts were to be treated as a distribution to the husband.
Husband Dissipates Assets by Placing Them in Trusts for the Children, but the Appellate Court Does Not Allow Unaccrued Interest
In the trial court (TC), the wife was awarded $4,360,158 of mostly unaccrued interest on the corpus of trusts the husband set up unilaterally for the children. The TC took the value of those trusts, $9,291,372, as part of the marital estate. The TC also added $990,945 of interest that the trusts had received and the remaining unaccrued future interest for a total value of “distribution” paid to the husband of $14,642,475 related to the trusts. The appellate court (AC) determined that the future interest was future interest and, thus, not part of the marital estate. However, the AC let stand the determination that the value of the trusts were to be treated as a distribution to the husband.
New case to address goodwill impairment dispute
Goodwill impairment does not appear often in litigation, but a court case in Tennessee will go forward after a judge ruled not to dismiss the plaintiff’s claims.
Five Areas to Explore If You Suspect a Spouse Is Hiding Crypto Assets in a Marital Dispute
In BVR’s recent webinar, Cryptocurrency Fraud and Forensics: What Valuation Professionals Need to Know, forensic and cryptocurrency experts Katerina Gaebel and Mark DiMichael, both of Citrin Cooperman, covered various hot topics on fraud and forensic accounting issues in digital assets and how they affect the business valuation profession. Here, we summarize five key areas where one would find proof of crypto asset fraud in a marital dispute, including interviews, tax returns, bank accounts, credit card statements, and more.
Strougo v. Tivity Health, Inc.
In this case regarding alleged fraud in the purchase or sale of securities, the defendants pled a motion to dismiss the plaintiffs’ claims. The parties categorized the defendants’ alleged misstatements into two groups: (1) the Nutrisystem claim, where the defendants allegedly misled investors as to the success of the Nutrisystem acquisition; and (2) the goodwill claim, where the defendants allegedly impaired goodwill by carrying goodwill at a value that exceeded its implied fair value. The court denied the motion to dismiss.
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