Expert’s Failure to Review Debtor’s Reorganization Plan Results in ‘Defective’ Hotel Appraisals
In § 506(a) hotel valuations, bankruptcy court finds creditor’s experienced expert premised appraisals on “fundamentally flawed” base assumption that hotels would be sold on the valuation date, where debtor’s plan said debtor would retain and operate hotels; court said replacement value applied.
Parties’ agreement complicates spousal support calculation in S corp context
Instead of facilitating a resolution, a separation agreement between the divorcing spouses led to a protracted lawsuit.
EBITDA/sales ratio added to 2020-21 RMA eStatement Studies
Many valuation experts use the annual RMA Statement Studies for industry-specific financial benchmarks.
In tax refund case, expert identifies only viable method to value stock in ‘severely distressed’ private company
The taxpayer sued the federal government for a refund, arguing she had overpaid income taxes on stock she had received as part of settling a lawsuit against her former employer.
Global BVU News and Trends November 2020
Business valuation news from a global perspective.
Lucero v. United States
In tax case, court approves refund, finding value of unlisted stock in distressed closely held company that taxpayer received as part of a settlement was less than stated in settlement agreement; taxpayer’s expert showed market value approach was only suitable method to calculate fair market value.
Court Adopts Taxpayer Expert’s Method to Value Unlisted Stock of ‘Severely Distressed’ Company
In tax case, court approves refund, finding value of unlisted stock in distressed closely held company that taxpayer received as part of a settlement was less than stated in settlement agreement; taxpayer’s expert showed market value approach was only suitable method to calculate fair market value.
A.A. v. B.A.
In valuing owner’s financial advisory business organized as sole proprietorship, court rejects idea that prior case law on goodwill in solely owned business precludes assigning goodwill to business; court says commissions earned during marriage but received post-separation or post-divorce are marital.
Delaware Court Revisits Issue of Goodwill in Sole Proprietorship
In valuing owner’s financial advisory business organized as sole proprietorship, court rejects idea that prior case law on goodwill in solely owned business precludes assigning goodwill to business; court says commissions earned during marriage but received post-separation or post-divorce are marital.
Marshall v. Marshall (II)
On second review, appeals court says trial court satisfied task on remand; latter’s use of reasonable compensation calculation to establish income for alimony and child support purposes was in the spirit of parties’ agreement and was based on “entirely credible” testimony by husband’s BV expert.
Courts Agree Reasonable Compensation Is Sound Method for Calculating Spousal Support in S Corp Context
On second review, appeals court says trial court satisfied task on remand; latter’s use of reasonable compensation calculation to establish income for alimony and child support purposes was in the spirit of parties’ agreement and was based on “entirely credible” testimony by husband’s BV expert.
Amid Market Data Volatility, the Best Option Is a More Rigorous DCF
A panel of global valuation experts who conducted a recent webinar co-sponsored by RICS, and also NACVA, the ASA, GACVA, and CBVI gives their comments.
New edition released of the BV in Divorce Compendium
The most current summary and analysis of U.S. legal decisions involving business valuation and divorce is in the just-released fifth edition of BVR’s Business Valuation in Divorce Case Law Compendium.
Tips on how to help settle a divorce during COVID-19
How do you resolve a divorce case during COVID-19, when many businesses in all kinds of industries are coping with significant losses and continuing uncertainty over future performance?
Valuation Challenges and Best Practices in Joint Ventures and Strategic Affiliations
Today, corporate investments into joint ventures and other non-controlled entities now exceed $5 trillion per year, according to Ankura/Water Street Partners' analysis of U.S. Government data. Companies utilize joint ventures for a variety of reasons, including to access capabilities, share risk, pool capital, secure added scale and scope, and satisfy regulatory requirements of local ownership. Join Jerry Chang, Molly Faber, and Tim Lubbe of Ankura to learn more about the increasing prevalence of joint ventures ...
New edition of McKinsey valuation book now in BVR’s bookstore
The fully updated 7th edition of Valuation: Measuring and Managing the Value of Companies from McKinsey & Co. is now in BVR’s bookstore.
Leigh Miller says valuation ‘ranges’ still raise questions with auditors, even during COVID-19
Using multiple forecast scenarios has been a commonly practiced approach to market volatility—and many UK business valuers are now saying that it should be used more widely.
25 Tips on Dealing With COVID-19 From the NACVA Conference
COVID-19 was a hot topic of discussion in a number of the sessions at the NACVA and the CTI’s 2020 Business Valuation and Financial Litigation Super Conference, which was held online over five full days (June 15-19).
Masterclass in Normalizing Compensation
Three nationally known experts will explain how to determine reasonable compensation amounts. The principal author of the Job Aid, Mike Gregory, will explain the “IRS Job Aid on Reasonable Compensation” and share case studies with many tips and traps. One of the foremost national experts on reasonable compensation, Stephen Kirkland, will share insights and sources to help determine reasonable compensation for your clients. Paul Hamann will show how easy it is to use RCReports to ...
Rose’s 1, LLC v. Erie Ins. Exch.
D.C. court, ruling on parties’ motions for summary judgment, finds restaurant owners cannot show that mayor’s COVID-19-related closure orders constituted “direct physical loss” to the property, as required under the existing business interruption policy; court rules for insurer and closes case.
Court Says Restaurants Fail to Meet Requirements for COVID-19-Related Business Interruption Coverage
D.C. court, ruling on parties’ motions for summary judgment, finds restaurant owners cannot show that mayor’s COVID-19-related closure orders constituted “direct physical loss” to the property, as required under the existing business interruption policy; court rules for insurer and closes case.
Deviations From Historical Cash Flow and Their Implications to Effective Discount Rates for Lost Profits Analyses
The authors address the direct relationship between projected cash flows (that is, those being measured for risk) and discount rates in a lost profits analysis.
Fair Value Measurements Amid the Covid-19 Crisis
Reporting entities in recent years generally benefited from a growing economy, which may have allowed auditors to gain comfort with fair value measurements for financial reporting purposes with relatively less documentation. The disruption to global economic activity and financial markets suggest that a business as usual approach may no longer apply to these same fair value measurements. Consequently, reporting entities can expect fair value measurements to receive greater scrutiny from their auditors and a heighted ...
Anderson v. A & R Spraying & Trucking, Inc.
In buyout dispute over closely held corporation, State Supreme Court upholds trial court’s value determination based on income-based analyses parties’ experts presented but adjusting for inconsistencies in each opinion; asset approach was inappropriate where company would continue to operate.
Calculating Fair Value, Court Uses Experts’ Income Analyses but Adjusts for Inconsistencies
In buyout dispute over closely held corporation, State Supreme Court upholds trial court’s value determination based on income-based analyses parties’ experts presented but adjusting for inconsistencies in each opinion; asset approach was inappropriate where company would continue to operate.