What It’s Worth: Valuing Dental Practices
January 2025 PDF (150 pages)
BVR (editor)
Business Valuation Resources, LLC
Court finds no personal goodwill despite a noncompete agreement
In a Florida divorce case, the husband appealed the trial court’s finding that the goodwill in his business, a provider of retirement plan and fiduciary services, was all enterprise goodwill.
Maligned and Abused Excess Earnings Method Endures—But Why?
During a recent BVR Power Panel webinar on divorce valuations, the panel wondered why, given all the drawbacks of the excess earnings method, it continues to be used, especially for small businesses and professional practices. Also, insights into how judges evaluate an analyst’s use of this method.
BV News and Trends December 2024
A monthly roundup of key developments of interest to business valuation experts.
Business owner spouse stuck with agreed-upon valuation date
In a Pennsylvania divorce case, the wife was the 100% owner of a staffing business, but her husband ran it.
Explicate the “Personal” in Goodwill
Join experts Jim Alerding and Josh Shilts as they review personal versus entity goodwill issues and discuss the current state statutes, relevant case law, and examples. They will also review other personal versus entity goodwill issues, such as transferrable versus non-transferrable goodwill and methods of determining the breakdown of total goodwill into its components.
Donahue v. Donahue
This case is important because it held that the covenant not to compete value was not determinative of the value of personal goodwill. Florida had a law go into effect on July 1, 2024, regarding personal goodwill in divorce. It codified that personal goodwill was not a marital asset. Also, previously, when a business sale required a noncompete or restrictive covenant, its value was generally treated as personal goodwill and, therefore, not part of the marital equitable distribution. Today, however, courts may consider a portion of the restrictive covenant as enterprise goodwill, thereby increasing the value of the marital estate. It was up to the courts to make that distinction and determine whether such instruments should be considered martial assets.
Business’s Goodwill Determined to Be Enterprise Only; Covenant Not to Compete Does Not Change the Nature of the Goodwill
This case is important because it held that the covenant not to compete value was not determinative of the value of personal goodwill. Florida had a law go into effect on July 1, 2024, regarding personal goodwill in divorce. It codified that personal goodwill was not a marital asset. Also, previously, when a business sale required a noncompete or restrictive covenant, its value was generally treated as personal goodwill and, therefore, not part of the marital equitable distribution. Today, however, courts may consider a portion of the restrictive covenant as enterprise goodwill, thereby increasing the value of the marital estate. It was up to the courts to make that distinction and determine whether such instruments should be considered martial assets.
BV News and Trends October 2024
A monthly roundup of key developments of interest to business valuation experts.
Kidan v. Schneider
The ultimate value determination in this case involved questions of the appropriate date of value, a question of whether to consider a transaction subsequent to the date of valuation, and a determination of the amount of personal goodwill.
Pennsylvania Appellate Court Affirms Trial Court Determination of Value of Wife’s 25% Interest in Staffing Business
The ultimate value determination in this case involved questions of the appropriate date of value, a question of whether to consider a transaction subsequent to the date of valuation, and a determination of the amount of personal goodwill.
Ripple effects of Florida’s updated law regarding goodwill
Regardless of whether you practice in Florida, a change in the law there—plus a recent court case—takes the analysis of enterprise versus personal goodwill in marital cases to another level.
Lunt v. Lunt
This divorce case provided a good analysis of personal versus enterprise goodwill and the elements that were included in each. It also discussed the history of personal and enterprise goodwill in Utah that progressively allowed the exclusion of personal goodwill from the marital estate in a divorce in Utah. The general principles of personal versus enterprise goodwill are applicable most everywhere.
Utah Appeals Court Affirms Trial Court Allocation of 5% of Value of Husband’s Website Business to Personal Goodwill
This divorce case provided a good analysis of personal versus enterprise goodwill and the elements that were included in each. It also discussed the history of personal and enterprise goodwill in Utah that progressively allowed the exclusion of personal goodwill from the marital estate in a divorce in Utah. The general principles of personal versus enterprise goodwill are applicable most everywhere.
Unraveling Financial Deception: Divorce Case Study for Experts
This case study will be an in-depth examination of a high-net-worth divorce case in which financial deception was prevalent. This case involved unreported income, lifestyle discrepancies, and an undervalued family business. Throughout this case study, you will learn forensic techniques to uncover hidden assets, reconcile unreported income with lifestyle expenses to detect discrepancies and learn how to navigate other complex financial challenges. It will discuss the challenges of valuing the family business and expose fraud ...
Texas judge KOs FTC’s ban on noncompetes—nationwide
In last week’s issue , we reported that a Florida judge blocked the Federal Trade Commission from applying its impending ban on noncompete agreements. Back in July, a Texas judge did the same thing but temporarily. Now, the same Texas judge has struck down the ban nationwide.
Two strikes against FTC’s ban on noncompete agreements
In the wake of the overturned Chevron decision, a second federal judge has ruled that the impending ban on noncompete agreements is likely invalid.
State’s high court reverses appellate court on personal goodwill
In South Carolina divorce matters, enterprise goodwill is marital property subject to equitable division, but personal goodwill is not.
No DLOC on a 50% interest, says appellate court
In a divorce matter in Indiana, the husband and wife each owned a 50% interest in a crop-dusting business.
The South Carolina Supreme Court Reverses the Appellate Court—Goodwill in Dental Practice Was Personal Goodwill and Not Marital Property
Once again, the courts have recognized that, in order to determine whether goodwill was personal or enterprise, it was necessary for the court to have evidence to support the breakdown between personal and enterprise.
Bostick v. Bostick (II)
Once again, the courts have recognized that, in order to determine whether goodwill was personal or enterprise, it was necessary for the court to have evidence to support the breakdown between personal and enterprise.
Another Florida divorce case on goodwill—of the very same entity!
This is the first time in our recent memory in which a multimember entity (a medical practice) had two of its members get divorced (not from each other) and the valuation of personal goodwill needed to be resolved.
Florida court expands excludable personal goodwill in divorce
An important marital dissolution case out of Florida deals with a medical practice with 35 shareholders.
Townsend v. Townsend
This was yet another case that emphasized the importance of the valuation expert’s responsibility to identify the amount of personal versus enterprise goodwill in a specific case.
Indiana Appellate Court Affirms the Value of Husband’s Business That Excludes Personal Goodwill but Adds Back DLOC as Parties’ Interests Must be Combined
This was yet another case that emphasized the importance of the valuation expert’s responsibility to identify the amount of personal versus enterprise goodwill in a specific case.