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BV News and Trends March 2024

A monthly roundup of key developments of interest to business valuation experts.

ESOP group drafts rule framework for DOL valuation regs

In advance of the Department of Labor issuing its proposed final regulations related to ESOP valuations, the ESOP Association has drafted a “proposed regulatory framework,” according to the group’s blog post.

BV News and Trends January 2024

A monthly roundup of key developments of interest to business valuation experts.

Court figures fair value of startup biotech for dissenters

In a dissenting shareholder case in a federal district court in Georgia, neither the Black-Scholes method nor the prior transactions method convinced a court of the value of a startup biotech company.

Time to Engage Over Upcoming ESOP Valuation Rules

Some examples of how the valuation profession has worked with regulators in the past may help inform interactions with the Department of Labor (DOL), which will soon issue regulations regarding ESOP valuations.

BV News and Trends December 2023

A monthly roundup of key developments of interest to business valuation experts.

In re Burg

The debtor withheld records and failed to explain missing assets and deleted records and misled the court as to what he did with certain assets. The debtor also knowingly and fraudulently withheld records from the trustee. This was all part of a scheme the debtor devised with the help of a “consultant” to avoid repaying the plaintiff creditors.

Bankruptcy Court Denies Debtor Discharge for Fraud, Failure to Produce Records and Fraudulent Transfers

The debtor withheld records and failed to explain missing assets and deleted records and misled the court as to what he did with certain assets. The debtor also knowingly and fraudulently withheld records from the trustee. This was all part of a scheme the debtor devised with the help of a “consultant” to avoid repaying the plaintiff creditors.

Julie A. Su v. Reliance Trust Co.

In this ESOP-related case, the court ruled that two experts of a former defendant can testify for the remaining defendants to the extent their testimony was not duplicative. The defendant’s motion to exclude testimony of the government’s (plaintiff’s) witness because the new FRE 702 rules were not followed was denied, as the court explained the new FRE 702 had not been violated.

U.S. District Court Allows Nonduplicative Testimony of Experts and Allows Testimony on Clarification of New FRE 702

In this ESOP-related case, the court ruled that two experts of a former defendant can testify for the remaining defendants to the extent their testimony was not duplicative. The defendant’s motion to exclude testimony of the government’s (plaintiff’s) witness because the new FRE 702 rules were not followed was denied, as the court explained the new FRE 702 had not been violated.

Abeome Corp., Inc. v. Stevens

The parties did not agree on a fair value of the shares in a dissenting shareholder suit. The court, using information in evidence, including expert witness testimony from both parties’ experts, determined the fair value.

U.S. District Court Determines Fair Value of Shares

The parties did not agree on a fair value of the shares in a dissenting shareholder suit. The court, using information in evidence, including expert witness testimony from both parties’ experts, determined the fair value.

BV News and Trends November 2023

A monthly roundup of key developments of interest to business valuation experts.

Don’t hold your breath over the DOL valuation regs, some say

While in Las Vegas, BVWire stopped in at the ESOP Association’s Employee Owned Conference, billed as the largest ESOP conference in the world.

Regulatory uncertainty regarding ESOP valuation is a major problem

The regulatory uncertainty around valuations for employee stock ownership plans (ESOPs) is a significant burden that creates undue risk and can “hamper employee-owned businesses,” says Alex Brill, a senior research fellow at the American Enterprise Institute, in a new paper.

BV News and Trends October 2023

A monthly roundup of key developments of interest to business valuation experts.

Hitchner busts more BV myths

Does the fair market value standard assume a financial buyer, without synergistic benefits?

Free updated guide to the Stout restricted stock study

The 2023 edition of the “Stout Restricted Stock Study Companion Guide” is now available, and it reflects updated tables and graphs that contain new transactions.

Court has limited menu for steakhouse valuation

In a Michigan case, two 50% owners of a Ponderosa steakhouse were locked in a battle over the Old West-themed eatery, with both owners engaging in oppressive conduct against the other. They left it up to the court to decide their fate.

DOL ESOP valuation regs coming by year-end

The Department of Labor (DOL) will issue long-awaited guidance on ESOP valuations by the end of this year, according to a blog post from the National Center for Employee Ownership (NCEO).

Takeaways From ASA’s ESOP Virtual Conference

ESOP valuation basics, sell-side transactions, issues with mature ESOPs, and common critiques with valuations in litigation were the topics of discussion at ASA ESOP Virtual Conference.

Valuation Implications of the Changing ESOP Litigation Landscape

The tide has started to turn with respect to litigation over ESOP valuations, speakers reported at the recent ASA ESOP Virtual Conference. There has been a major court victory and pressure from the ESOP and valuation profession, and now the DOL has committed to moving forward—hopefully— with long-awaited regulations on the valuation of company shares to be bought by an ESOP.

2023 Stout restricted stock study guide now available

The 2023 edition of the “Stout Restricted Stock Study Companion Guide” is now available, and it reflects updated tables and graphs that contain new transactions.

Another case of lopsided valuation experts

A Minnesota divorce case is an example of why judges can get the perception that valuation experts are hired guns.

Tennebaum v. Deshpande

In this Minnesota appeal of a marital dissolution decree, the district court received valuations from experts representing both parties and determined the value of the husband’s business interest in an asset management company. The husband appealed that value. The district court had considered matters of methodology as well as personal goodwill. The court of appeals found that the district court did not abuse its discretion and affirmed the judgment of the district court.

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