Divorcing business owner kept PPP loan a secret
In an Ohio case, the couple began negotiating terms of their divorce in October 2020 and decided to use Dec. 31, 2020, as the valuation date for marital assets.
Skyrocketed but forgotten crypto figures in divorce case
In an Indiana divorce case, the couple operated a cryptocurrency business, and, after they split up, they entered into a mediated property settlement that awarded “all assets” of the business to the husband.
Beach v. Beach
A vestige of the COVID-19 era, a PPP loan, was the central issue in the Ohio appeals court’s reversal of the trial court’s judgment. The trial court vacated the parties’ Oct. 21, 2021, decree of dissolution of marriage. The husband had applied for a PPP loan of $9.4 million and did not notify the wife or either of the parties’ experts. The reversal by the appeals court was based on the date of valuation, agreed to by both parties, predating the PPP loan. As shown in a number of cases in different jurisdictions, the date of valuation became a critical issue in determining the value of a marital estate.
Ohio Court of Appeals Reverses and Does Not Allow Consideration of PPP Loan After Valuation Date
A vestige of the COVID-19 era, a PPP loan, was the central issue in the Ohio appeals court’s reversal of the trial court’s judgment. The trial court vacated the parties’ Oct. 21, 2021, decree of dissolution of marriage. The husband had applied for a PPP loan of $9.4 million and did not notify the wife or either of the parties’ experts. The reversal by the appeals court was based on the date of valuation, agreed to by both parties, predating the PPP loan. As shown in a number of cases in different jurisdictions, the date of valuation became a critical issue in determining the value of a marital estate.
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.
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.
Court devises own ROT for valuing a plumbing business
In a Nebraska divorce case, neither side offered expert testimony as to the proper methodology for valuing the husband’s plumbing business.
Blount v. Blount
The appellant wife in this case argued that the trial court failed to divide the marital estate equitably because it did not make an explicit finding of fact as to the valuation of the business that it awarded solely to her but instead only made a finding as to the “excess cash” found in the business. The appellate court affirmed the trial court, explaining that a specific finding of value was not required. (Editor’s note: According to a well-known family law attorney, this likely would be reversible error if specific findings were requested and should be even if not ...
Georgia Appellate Court Affirms Order Allocating Excess Cash From Business to Husband but Fails to Assign Value to the Business
The appellant wife in this case argued that the trial court failed to divide the marital estate equitably because it did not make an explicit finding of fact as to the valuation of the business that it awarded solely to her but instead only made a finding as to the “excess cash” found in the business. The appellate court affirmed the trial court, explaining that a specific finding of value was not required. (Editor’s note: According to a well-known family law attorney, this likely would be reversible error if specific findings were requested and should be even if not ...
Court KOs valuation ‘anchored’ to subsequent event
In a Hawai’i divorce case, the husband owned shares in some banking entities at the time of his marriage in 1990, which was his second marriage.
Casement v. Casement
This case emphasized, as in many other cases, that, absent expert testimony as to a business’s value, the trial court had discretion to determine the value based on the evidence submitted at trial.
Parties Fail to Provide Expert Valuation—Appellate Court Affirms Value of Trial Court
This case emphasized, as in many other cases, that, absent expert testimony as to a business’s value, the trial court had discretion to determine the value based on the evidence submitted at trial.
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.
Divorce court sets valuation date that veers from state’s norm
In Kentucky, the valuation date for a marital dissolution case is generally the date of divorce. In a new case, a court did not use the date of divorce but had good reasons.
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.
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.
Delk v. Delk
The selection of a trial date in this case had further implications for the value of the husband’s business. An FDA investigation resulting in a large fine and impairment of the business was not known at the valuation date and thus was not allowed in determining the value of the business for marital estate purposes.
Kentucky Appellate Court Affirms Selection of Valuation Date and Applies Known or Knowable Concept
The selection of a trial date in this case had further implications for the value of the husband’s business. An FDA investigation resulting in a large fine and impairment of the business was not known at the valuation date and thus was not allowed in determining the value of the business for marital estate purposes.
Tax rate slipup in dental practice valuation
In a North Dakota divorce case, both sides had expert valuations done on the husband’s dental practice.
Sneed v. Sneed
In this North Carolina appellate divorce case, the court affirmed the trial court decisions, including the determination of value of the husband’s law firm interest. The witness for the wife, who was originally a court-appointed expert, testified as to the value of the law practice and included his analysis of personal-versus-entity goodwill. Both courts included all goodwill in the marital estate as per North Carolina case law. The expert witness apparently submitted a calculation of value for his testimony.