Court Affirms Rightness of Expert’s ‘Marital Value’ Calculation
Court upholds expert’s idiosyncratic valuation approach based on ascertaining “marital value” of community’s grocery stores as opposed to stores’ “investment value”; since the stores were not sold, valuation properly captured their value to owner spouse.
Asset Approach Avoids Double Counting of Future Earnings
Appeals court affirms trial court’s decision favoring asset approach for valuing owner spouse’s medical practices; unlike income approach, it avoids accounting for owner spouse’s future earning twice, in asset valuation and determination of alimony.
Court Backs Away From Support for Double-Dip Theory
In a divorce case involving dental practice, appeals court says using income stream “as a tool” to value a professional business and then using it “as actual income for a spousal support calculation” does not per se amount to impermissible double dipping.
Court Rejects Flat Prohibition Against Double Dipping
Appeals court finds Ohio statute requires trial court to consider income from all sources in calculating spousal support and overrules Heller I to extent Heller imposes a flat prohibition against double dipping; mandate is to ensure fairness and equity.
Valuators in Taking Case Disagree Over Measure of Damages
Court deems expert’s discretionary cash flow analysis an appropriate formula for determining loss to owner of expropriated business but says compensation calculation may be based on other methods, including rule of thumb guide for selling donut shop.
In re Honer
Court upholds expert’s idiosyncratic valuation approach based on ascertaining “marital value” of community’s grocery stores as opposed to stores’ “investment value”; since the stores were not sold, valuation properly captured their value to owner spouse.
Bankruptcy Court Accepts Rationale for Tax Affecting
In a fraudulent transfer case involving S corp, court says valuation should reflect that buyers of S corps would experience a reduction in the value of the corporations' earnings because of the need to pay personal income taxes on those earnings.
Goodwill Determination Turns on Classification of Auction Business
Appeals court affirms trial court’s finding that all the goodwill in husband’s auction business is nontransferable where the husband is the only licensed auctioneer and the sole shareholder of the company and allows for expansion of concept of profession.
Use of Asset-Level Deductions Hinges on Business Strategy
State’s high court strikes down district court’s fair value determination, finding reliance on prior law prohibiting use of deductions was misguided where company pursued strategy of selling off real estate and other assets at time of triggering event.
Gallo v. Gallo
Appeals court finds Ohio statute requires trial court to consider income from all sources in calculating spousal support and overrules Heller I to extent Heller imposes a flat prohibition against double dipping; mandate is to ensure fairness and equity.
Lack of Marketability a Factor in Valuing Minority Interest
In buyout case, calculation of fair value of minority shareholder’s interest in restaurant turns on forensic accountant’s credit/cash ratio analysis; New York trial court says law recognizes lack of marketability as a factor in valuing closely held corpor ...
In re Mauer
Appeals court affirms trial court’s decision favoring asset approach for valuing owner spouse’s medical practices; unlike income approach, it avoids accounting for owner spouse’s future earning twice, in asset valuation and determination of alimony.
Bohme v. Bohme
In a divorce case involving dental practice, appeals court says using income stream “as a tool” to value a professional business and then using it “as actual income for a spousal support calculation” does not per se amount to impermissible double dipping.
Expert’s Solid DCF and Industry Research Sway Court
Court discredits respondent expert’s capitalization of earnings calculation and market-based analysis, noting “severe deficiencies” and instead adopts petitioner expert’s valuation but applies DLOM to entire equity value, not just goodwill.
Cortes v. 3A N. Park Ave. Rest Corp.
In buyout case, calculation of fair value of minority shareholder’s interest in restaurant turns on forensic accountant’s credit/cash ratio analysis; New York trial court says law recognizes lack of marketability as a factor in valuing closely held corpor ...
Gift Tax Case Pivots on Key Assumption Informing Valuations
Taxpayer parents incurred gift tax liability when, based on improper valuations, they agreed to merge their S corp. with their sons’ S corp. and accepted an unduly low interest in the new company while sons received an unduly high interest, Tax Court says ...
Valuation Combines Elements of Rival Experts’ Cash Flow Analyses
Appeals court defers to trial court’s method of applying one expert’s cap rate to other expert’s cash flow analysis when valuing spouse’s interest in closely held company and says “purposeful” application of minority discount has support among valuators.
Utah Resources International, Inc. v. Mark Technologies Corp.
State’s high court strikes down district court’s fair value determination, finding reliance on prior law prohibiting use of deductions was misguided where company pursued strategy of selling off real estate and other assets at time of triggering event.
Bank of America, N.A. v. Veluchamy (In re Veluchamy)
In a fraudulent transfer case involving S corp, court says valuation should reflect that buyers of S corps would experience a reduction in the value of the corporations' earnings because of the need to pay personal income taxes on those earnings.
City of Baton Rouge v. Jay’s Donuts, Inc.
Court deems expert’s discretionary cash flow analysis an appropriate formula for determining loss to owner of expropriated business but says compensation calculation may be based on other methods, including rule of thumb guide for selling donut shop.
McCarter v. McCarter
Appeals court affirms trial court’s finding that all the goodwill in husband’s auction business is nontransferable where the husband is the only licensed auctioneer and the sole shareholder of the company and allows for expansion of concept of profession.
Expert’s Tax Appraisal Weathers Frontal Daubert Attack
Appeals court says tax tribunal did not abdicate its gatekeeper role under Rule 702 when admitting taxpayer expert’s appraisal, where the expert was qualified and used a reliable methodology; a searching inquiry into the underlying data was not necessary.