Valuation Experts Clash Over Analysis of Transactional Data
Listeners to a webinar on the use of the BIZCOMPS database have taken issue with a number of points presented, including stratifying the data, filtering, the R-square coefficient, harmonic mean, minimum number of transactions, the elimination of outliers, market multiples, and more.
Market Multiple Adjustments: Get a Grip on GRP
A follow-up of an earlier article that focuses on the attributes of growth, risk, and profitability (GRP) in a benchmark analysis of guideline companies.
In re AOL Inc.
In statutory appraisal, court finds sales process was not “Dell compliant” and declines to assign any weight to deal price; court agrees with parties’ experts that DCF best captures fair value on valuation date and arrives at final value below deal price.
Chancery Relies on DCF Where Deal Process Is Not ‘Dell Compliant’
In statutory appraisal, court finds sales process was not “Dell compliant” and declines to assign any weight to deal price; court agrees with parties’ experts that DCF best captures fair value on valuation date and arrives at final value below deal price.
Appeals Court Upholds Insolvency Rulings in Transfer Liability Case
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
Stocker v. Stocker
Trial court did not err in adopting income-based valuation offered by husband’s expert; appeals court calls husband’s attack on his own expert “counterintuitive” where expert explained the value of the company was in its cash flow rather than its assets.
Court Rebuffs Litigant’s Attack on Own Expert’s Income-Based Valuation
Trial court did not err in adopting income-based valuation offered by husband’s expert; appeals court calls husband’s attack on his own expert “counterintuitive” where expert explained the value of the company was in its cash flow rather than its assets.
Trial Court’s Physician Practice Valuation Lacks Factual Basis
Goodwill, excess earnings method, market-based approach, capitalization rate, multiple, expert testimony, professional corporation, professional practice, valuation methods ...
Solvency Determination Turns on Income Recognition Analysis
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
Kardash v. Commissioner (III)
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
Appeals Court Upholds Insolvency Rulings in Transfer Liability Case
Appeals court upholds Tax Court’s transfer liability rulings; there was constructive fraud in that dividend payments to appellant were not compensation for services rendered but were part of a series of transfers leading to company’s insolvency.
Expert’s Best-Effort Medical Practice Valuation Holds Up on Appeal
Appeals court upholds medical practice valuation despite gaps in expert analysis, including failure to analyze goodwill and exclude premarriage value portion of practice; expert’s job was “complicated” due to owner-spouse’s noncompliance with discovery.
Court rejects experts' fair value determinations in Minnesota buyout case
The plaintiff is the “prevailing party,” a Minnesota district court recently decided, allowing the minority owner of a well-known family business to sell her share for over $40 million. The valuation trial featured high-caliber experts who disagreed about every input and assumption underlying their discounted cash flow analyses.
Solvency Determination Turns on Income Recognition Analysis
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
Redmond v. NCMIC Fin. Corp. (In re Brooke Corp.)
Court credits trustee expert’s analysis of debtor’s balance sheet, finding the expert showed debtor’s practice of immediate recognition of initial franchise fees as revenue violated GAAP and debtor was continuously insolvent; transfers are avoidable.
Court of Appeals Sides With Taxpayers on Right to Vet IRS Expert Valuation
Court of Appeals finds Tax Court held mistaken view of burden of proof and erred in declining to evaluate taxpayers’ multiple challenges to IRS’s expert valuation; on remand, Tax Court may consider new valuation evidence, appeals court says.
Chancery Bases Fair Value Calculation on Income-Based Model
Flawed sales process makes merger price an unreliable indicator of fair value for statutory appraisal, Chancery finds; in accord with party experts, court uses discounted net income approach and adopts most of respondent expert’s inputs for its valuation.
Ramundo v. Ramundo
Appeals court upholds medical practice valuation despite gaps in expert analysis, including failure to analyze goodwill and exclude premarriage value portion of practice; expert’s job was “complicated” due to owner-spouse’s noncompliance with discovery.
Expert’s Best-Effort Medical Practice Valuation Holds Up on Appeal
Appeals court upholds medical practice valuation despite gaps in expert analysis, including failure to analyze goodwill and exclude premarriage value portion of practice; expert’s job was “complicated” due to owner-spouse’s noncompliance with discovery.
Tennessee dissenters claim Delaware block method is passé
The use of the Delaware block method in Tennessee recently came under attack in a case involving a closely held Nashville, Tenn.-based media company whose controlling shareholders had pursued a squeeze-out merger and later asked the trial court for a judicial appraisal of the dissenting shareholders' interest.
Flop film poses unique valuation challenge
A recent bankruptcy-related case in front of the California Court of Appeal raises important questions about how one quantifies the value of a dated piece of art, a film, for which there never was a market in the first place.
Chancery relies on income approach to determine fair value in problematic bank merger
In a statutory appraisal action, the Delaware Court of Chancery recently found the deal price did not reflect fair value because the sales process was suboptimal. Certain other methods the parties' experts used also were inadequate to the task, the court said.
Stock-for-Stock Mergers: An Empirical Study of Fairness Determinations in Fairness Opinions
This study asks which valuation approaches and analyses are currently being used as the foundation for fairness opinions in stock-for-stock mergers involving U.S. companies. An examination of the SEC's EDGAR database for the years 2009 through 2014 identified 146 proxy statements for stock-for-stock mergers containing 290 fairness opinions and descriptions of the approaches, methods, and analyses employed. We found that most opinions employed more than one approach, and that opinion providers (primarily investment bankers) determined ...
Cavallaro v. Commissioner (Cavallaro II)
Court of Appeals finds Tax Court held mistaken view of burden of proof and erred in declining to evaluate taxpayers’ multiple challenges to IRS’s expert valuation; on remand, Tax Court may consider new valuation evidence, appeals court says.
Court of Appeals Sides With Taxpayers on Right to Vet IRS Expert Valuation
Court of Appeals finds Tax Court held mistaken view of burden of proof and erred in declining to evaluate taxpayers’ multiple challenges to IRS’s expert valuation; on remand, Tax Court may consider new valuation evidence, appeals court says.