Boesch v. Holeman (I)
In dispute over value of dissociated partner’s one-third interest in whiskey business, appeals court says trial court erred in adopting value determination that applied discount for lack of control; applicable partnership law requires value be based on sale of entire business as a going concern.
Partnership Statute Precludes Use of Minority Discount in Buying Out Dissociated Partner
In dispute over value of dissociated partner’s one-third interest in whiskey business, appeals court says trial court erred in adopting value determination that applied discount for lack of control; applicable partnership law requires value be based on sale of entire business as a going concern.
Gavrielidis v. 80 Seaview Ave., LLC
In this dispute among siblings owning restaurants in Connecticut, the court determined that there was no oppression against one of the siblings whose employment was terminated and there were no wrongful acts. The court determined the fair market value of the plaintiff’s membership interests but denied discounts for lack of control and lack of marketability.
In a Siblings Ownership Dispute, Court Decides No Oppression and No Sums Owed by the Plaintiff, Determines the Value of the Plaintiff’s 25% Interest
In this dispute among siblings owning restaurants in Connecticut, the court determined that there was no oppression against one of the siblings whose employment was terminated and there were no wrongful acts. The court determined the fair market value of the plaintiff’s membership interests but denied discounts for lack of control and lack of marketability.
Nelson v. Commissioner
In gift tax case, Tax Court finds donor transferred percentages in limited liability company rather than fixed dollar amounts based on language in transfer instruments; further, where transferred minority interests include elements of control, minority discount should be reduced, not eliminated.
Court Says Reduced Minority Discount Appropriate Where Minority Interest Has Elements of Control
In gift tax case, Tax Court finds donor transferred percentages in limited liability company rather than fixed dollar amounts based on language in transfer instruments; further, where transferred minority interests include elements of control, minority discount should be reduced, not eliminated.
South Carolina Supreme Court weighs in on use of discounts in divorce valuations
In a crucial decision on the use of discounts when valuing a spouse’s minority interest in a closely held business, a majority of the South Carolina Supreme Court rejected a bright-line rule, noting it would limit the flexibility family courts must have in apportioning marital assets.
Discounts inappropriate in valuing minority interest in mandatory buyback, appeals court rules
When a minority shareholder in an Indiana company was terminated as a director and officer, a dispute arose over whether, under a buyback agreement, the use of discounts for lack of control and marketability was permissible in valuing his shares.
Clark v. Clark
On use of marketability and minority discount in valuing wife’s minority interest in husband’s company, state Supreme Court rejects bright-line rule, noting importance of case-by-case analysis and giving trial court flexibility in apportioning assets; fair market value standard drives valuation.
South Carolina Supreme Court Rejects Categorical Approach to Discounts in Divorce Valuations
On use of marketability and minority discount in valuing wife’s minority interest in husband’s company, state Supreme Court rejects bright-line rule, noting importance of case-by-case analysis and giving trial court flexibility in apportioning assets; fair market value standard drives valuation.
Robinson v. Langenbach
State high court upholds trial court’s use of DLOM and minority discount in buyout of minority interest resulting from shareholder oppression; court says there is no “fixed set of factors” trial court must consider for fair value calculation; “context is crucial” and here justified discounts.
High Court Says Context Supports Use of Discounts in Buyout From Shareholder Oppression
State high court upholds trial court’s use of DLOM and minority discount in buyout of minority interest resulting from shareholder oppression; court says there is no “fixed set of factors” trial court must consider for fair value calculation; “context is crucial” and here justified discounts.
In Mandatory Buyback, Indiana Appeals Court Disallows Use of Discounts
In dispute about valuation of terminated shareholder’s minority interest, appeals court finds the trial court erred when it allowed discounts for lack of control and marketability; under controlling case law, discounts are inappropriate where the buyback is mandatory and to the controlling party.
Hartman v. BigInch Fabricators & Construction Holding Co., Inc. (Hartman I)
In dispute about valuation of terminated shareholder’s minority interest, appeals court finds the trial court erred when it allowed discounts for lack of control and marketability; under controlling case law, discounts are inappropriate where the buyback is mandatory and to the controlling party.
Journal of Business Valuation 2017 Edition
From the CBV Institute ...
Connecticut court affirms lower court's decision not to tax affect
In a buyout dispute involving a Connecticut family business, an appellate court recently upheld the trial court’s earlier decision not to tax affect the earnings of the company in valuing the departing shareholder’s interest, even though experts for both sides tax affected.
Connecticut court says ‘no’ to tax affecting but limits the reach of its ruling
In a buyout dispute involving a Connecticut family business, an appellate court recently upheld the trial court’s decision not to tax affect the earnings of the company in valuing the departing shareholder’s interest, even though experts for both sides tax affected.
R.D. Clark & Sons, Inc. v. Clark
Trial court’s fair value determination in buyout dispute involving family business withstands appeal, including decision not to tax affect or apply majority and minority discounts; appellate court finds there is no controlling state law on the issues and upholds trial court’s findings on facts.
Courts Reject Tax Affecting and Use of Discounts in Connecticut Buyout Dispute
Trial court’s fair value determination in buyout dispute involving family business withstands appeal, including decision not to tax affect or apply majority and minority discounts; appellate court finds there is no controlling state law on the issues and upholds trial court’s findings on facts.
Tales From the Trenches: The Case of the 70% Equity Interest Valued as a Minority
Don’t assume a 70% interest represents a majority for valuation purposes. This is the latest in our series of articles from veteran appraisers based on actual engagements.
Valuing Minority Interests in the UK Is ‘Especially Challenging’
Comments by Andrew Strickland, a consultant with Scrutton Bland in the UK, on transactions involving fractional interests in closely held companies. He also offers a summary of discounts from a sample of relatively recent cases.
Global BVU News and Trends August 2019
Business valuation news from a global perspective.
Valuing minority interests in the United Kingdom is ‘especially challenging’
‘Valuing fractional interests in closely held companies is especially challenging,’ Andrew Strickland reports to BVWire—UK.
Meanwhile, the global value of control trends down slightly during Q1 2019
BVR has completed its latest quarterly update to the FactSet Mergerstat/BVR Control Premium Study (CPS), which includes an added 141 controlling acquisitions worldwide.
Puklich v. Puklich
In buyout dispute related to various family businesses, including auto dealership, high court finds trial court was authorized to adjust value finding to account for majority shareholder’s oppressive conduct; case law supported rejection of discounts in valuing minority shareholder’s interest.