Can You Trust a Valuation That Falls Short of AICPA Standards?
Appeals court finds error in trial court’s refusal to value business; even if limited data caused expert’s estimate to fall short of AICPA standard, it was based on the market approach, a “sound and reasonable method to value a closely-held business.”
Cavallaro v. Commissioner
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 ...
Hugh v. Hugh
Appeals court finds error in trial court’s refusal to value business; even if limited data caused expert’s estimate to fall short of AICPA standard, it was based on the market approach, a “sound and reasonable method to value a closely-held business.”
May Court Disregard Shareholder Agreement in Judicial Buyout?
Appeals court finds in judicial buyout, district court properly updated stock price listed in shareholder agreement and could disregard experts’ market approach values, but it erred when it abandoned the contract’s terms as to the manner of the payment.
Court Questions Idea of Goodwill in Solo Practice Valuation
Appeals court says distinction between professional goodwill and future earnings capacity “evanesces” when valuing solo professional practice; trial court erred in adopting value based on guideline transaction method that considered professional goodwill.
Piche v. Braaten
Appeals court finds in judicial buyout, district court properly updated stock price listed in shareholder agreement and could disregard experts’ market approach values, but it erred when it abandoned the contract’s terms as to the manner of the payment.
Tax Court Foils ‘End Run’ Around Expert Rules
Tax Court rejects taxpayer’s attempt to place in evidence a new appraisal regarding the decedent’s interest in an LLC whose principal asset was real estate by way of stipulation, finding he failed to qualify the appraiser as an expert and did not present ...
Hartline v. Hartline
Appeals court says distinction between professional goodwill and future earnings capacity “evanesces” when valuing solo professional practice; trial court erred in adopting value based on guideline transaction method that considered professional goodwill.
Bankruptcy Court Wary of Asset Approach in Solvency Analysis
Bankruptcy Court values Chapter 11 debtor on a going concern basis and finds the income approach is best suited to determine solvency at the time of critical financial transactions; the defendants’ expert properly relied on a contemporaneous Goldman Sachs ...
Estate of Tanenblatt v. Commissioner
Tax Court rejects taxpayer’s attempt to place in evidence a new appraisal regarding the decedent’s interest in an LLC whose principal asset was real estate by way of stipulation, finding he failed to qualify the appraiser as an expert and did not present ...
With Expert Help, N.Y. Court Computes Deli’s Fair Value
New York court enlists expert valuators to determine the fair value of a deli, occupying a “unique niche,” following the death of one of two equal owners; the court adopts the defendant expert’s income approach, but rejects the proposed 20% lack of market ...
Adjusting Appraisals, Court Estimates ESOP Target’s Value
After determining defendants breached fiduciary ERISA duties in ESOP transaction, the federal court adjusts two nearly contemporaneous valuations of the target company to arrive at a “reasonable estimate” of the target’s fair market value ...
Ruggiero v. Ruggiero
New York court enlists expert valuators to determine the fair value of a deli, occupying a “unique niche,” following the death of one of two equal owners; the court adopts the defendant expert’s income approach, but rejects the proposed 20% lack of market ...
Whyte v. C/R Energy Coinvestment II, L.P. (In re SemCrud)
Bankruptcy Court values Chapter 11 debtor on a going concern basis and finds the income approach is best suited to determine solvency at the time of critical financial transactions; the defendants’ expert properly relied on a contemporaneous Goldman Sachs ...
Chesemore v. Alliance Holdings, Inc. (II)
After determining defendants breached fiduciary ERISA duties in ESOP transaction, the federal court adjusts two nearly contemporaneous valuations of the target company to arrive at a “reasonable estimate” of the target’s fair market value and the plaintif ...
The Market Approach During Recessionary Times Is a Harbinger of Risk
“Ignoring the market evidence during periods of recession is a recipe for poor quality service,” said Rob Schlegel (Houlihan Smith & Co.) during BVR’s recent webinar “The Market Approach Today: Deciphering Messages From Markets, Courts, and Common Apprais ...
The Market Approach Today: Deciphering Messages From Markets, Courts, and Common Appraisal Errors
You would be forgiven for viewing this as the age of the income approach. While increased scrutiny through scholarship and judicial decision has raised the income approach to new prominence, a turbulent economy and tempestuous public markets have caused some appraisers to shy away from the market approach. But keep in mind: No valuation is complete without thorough analysis, and market evidence appears throughout the valuation process. In The Market Approach Today: Deciphering Messages From Markets ...
In re Greater Southeast Community Hospital Corp. (II)
Bankruptcy Court conducts extensive valuation findings of hospital in fraudulent transfer case.
Davidson v. Davidson (I)
The Michigan Court of Appeals affirmed the use of the market approach rather than an income capitalization method to value the parties’ businesses under the facts of this case. The lower court found the market approach more appropriate in light of the com ...
For Choosing Multiples & Comparables, the Data Really Do Matter
Court determines fair market value of limited partnership units in estate tax case, accepting net asset value and market approaches, with dispute focusing on measures and range of multiples for comparables ...
W.G. Anderson, et al. v. United States
Court determines fair market value of limited partnership units in estate tax case, accepting net asset value and market approaches, with dispute focusing on measures and range of multiples for comparables ...
Federal Court’s Declaring Valuation Date and Methodology Does Not Interfere With State Probate
The issue in this case was whether a federal district court could issue a declaratory judgment deciding the meaning of the agreement without interfering with state probate proceedings, and thereby negating federal subject matter jurisdiction.
Stock restriction agreement is not determinative of value for equitable distribution
One of the issues in this marital dissolution was the value of husband’s 1000 shares of nonvoting stock in the Sanger Clinic, P.A., where he was a senior partner.