Negotiated Formula for Stock Option Price Obviates DLOM Need
Eleventh Circuit upholds Tax Court’s $36.9 million valuation of executive stock option, finding that by using the parties’ negotiated formula for the number of shares equaling $16 million at the date of exercise and declining to apply a marketability disc ...
Davis v. Commissioner (II)
Eleventh Circuit upholds Tax Court’s $36.9 million valuation of executive stock option, finding that by using the parties’ negotiated formula for the number of shares equaling $16 million at the date of exercise and declining to apply a marketability disc ...
New case digests added to BVLaw in the last weeks
The following is a sampling of court decisions in which determination of the value of a business was essential to the result. Many of the leading financial experts and business appraisers were involved as consultants or expert witnesses in these matters. BVLaw digests all cases where valuation methodologies or competing approaches are adjudicated.
New updates to financial analysis decisions at BVLaw
Here are a sampling of cases where issues of business valuation factored in the final court decisions. As always, BVLaw Alert’s digests, and original court documents, are available for these and other breaking decisions.
In the Matter of the Marriage of Gay
Appellate court affirms trial court’s determination that—despite expert evidence from both parties—the valuation of the wife’s minority shares in a closely held was too speculative, particularly when no actual buyer was likely to buy the shares; a strong ...
Shiftan v. Morgan Joseph Holdings, Inc.
In merger-related appraisal action Del. Chancery agrees with petitioning shareholders that fair value assessment of company as going concern must include the redemption value provided for in the original Certificate of Incorporation.
Schuman v. Schuman
State high court says appeals court erred in classifying wife’s stock awards as separate property based solely on vesting; stock awards are form of deferred compensation, like retirement benefits, and are acquired “when they are earned, and not at the time of receipt, vesting or exercise.”
Farmer v. Farmer
Washington State Supreme Court rejects absolute rule for valuing converted employment stock options in divorce, deferring to trial courts’ broad authority to assess expert valuation of the options, including its reference to the tort framework of measurin ...
Cox v. Cox
Court confirms appropriateness of applying a 50% marketability discount to the post-marital value of a steel business but not to its premarital valuation, citing the changes in the steel industry and company-specific factors.
Mandell v. Mandell
Texas court holds unsigned buy-sell agreement controls value of husband’s medical practice, a privately held professional association, in divorce.
Garcia v. Garcia
Divorce court finds restrictive shareholder agreement not binding on valuation of medical practice, although question of discounts due to restrictions depends on particular facts of the cases.
Do Not Be Afraid to Take Much Higher Discounts During the Recession
The latest 2008 restricted stock data provide concrete proof that the discounts for lack of marketability have never been higher. By tying the VIX—the ticker symbol for the Chicago Board Options Exchange Volatility Index, a popular measure of the implied ...