Court do-over to figure passive appreciation for divorce
In an Ohio divorce case, the trial court made an award to the wife based on the full fair market value of the husband’s business.
Maher v. Cmejrek
The wife appealed the trial court’s decisions as to the values of the husband’s interests in his various medical practices and clinics and challenged the trial court’s determination of the husband’s income for support purposes. The appellate court affirmed the values of the medical practices and clinics and remanded the determination of income for support purposes for recalculation.
Indiana Appellate Court Affirms Valuation of Medical Practice Interests of Husband but Remands for Recalculation of Husband’s Income for Child Support
The wife appealed the trial court’s decisions as to the values of the husband’s interests in his various medical practices and clinics and challenged the trial court’s determination of the husband’s income for support purposes. The appellate court affirmed the values of the medical practices and clinics and remanded the determination of income for support purposes for recalculation.
Expert Survives Daubert—Allowed to Testify as to Lost Business Value
The case dealt with two motions to preclude testimony of an expert witness as to the loss in value of the plaintiff’s business. The plaintiff was an environmental consulting firm allegedly injured as a result of the actions of certain employees including breach of their fiduciary duty. The court concluded that the witness may testify because his report was based on sufficient facts and data and he applied reliable principles to the facts of this case.
White Buffalo Env’t, Inc. v. Hungry Horse, LLC
The case dealt with two motions to preclude testimony of an expert witness as to the loss in value of the plaintiff’s business. The plaintiff was an environmental consulting firm allegedly injured as a result of the actions of certain employees including breach of their fiduciary duty. The court concluded that the witness may testify because his report was based on sufficient facts and data and he applied reliable principles to the facts of this case.
Judicial appraisal needs reform per new paper
A recent paper addresses the problem of the “wide discretion” judges have in fashioning appraisal awards to dissenting shareholders based on opinions of valuation experts that are miles apart.
New Research Strengthens Support for the Three-Stage DCF
Unpublished research from Roger Grabowski and Ashok Abbott reveals data on firm growth over three stages: startup, stabilizing, and long term.
The Walsh v. Preston ESOP Case—Is It a Victory or an Escape?
Commentary from BVR’s legal editor on an important ESOP valuation case.
BV News and Trends February 2023
A monthly roundup of key developments of interest to business valuation experts.
Tax Court (Grudgingly) Allows Tax Affecting Under the SEAM Method
This was a gift tax valuation case the U.S. Tax Court decided. Gifts of minority interests in The Biltmore Co. were made from the its shareholders, the Cecils, to their children and grandchildren. The IRS audited the gift tax returns and assessed deficiencies for reporting too low fair market values of the gifts of The Biltmore Co. stock. Both sides presented experts to value the gifted interests. The experts agreed that the cash flows should be tax affected. The court accepted the tax affecting while allowing that it was not an admission by the Tax Court that tax affecting should apply in all cases. The Tax Court made changes to the values presented and cobbled together a final value that resulted in refunds to the taxpayers/petitioners.
Estate of Cecil v. Comm’r
This was a gift tax valuation case the U.S. Tax Court decided. Gifts of minority interests in The Biltmore Co. were made from the its shareholders, the Cecils, to their children and grandchildren. The IRS audited the gift tax returns and assessed deficiencies for reporting too low fair market values of the gifts of The Biltmore Co. stock. Both sides presented experts to value the gifted interests. The experts agreed that the cash flows should be tax affected. The court accepted the tax affecting while allowing that it was not an admission by the Tax Court that tax affecting should apply in all cases. The Tax Court made changes to the values presented and cobbled together a final value that resulted in refunds to the taxpayers/petitioners.
Wife who foregoes expert can’t complain about the outcome
A marital dissolution case in Illinois is another instance of a party not offering a competing valuation and then appealing the outcome—to no avail.
Final issue of Willamette’s Insights focuses on best practices
The Winter 2023 issue will be the final one for Insights from Willamette Management Associates.
IRS hits taxpayer with gross valuation misstatement penalty
Easement cases before the Tax Court can offer some interesting insights and guidance to BV professionals.
BVResearch Pro adds another issue of the ASA’s BV Review
Among many other resources, the BVResearch Pro platform contains the full archive of the Business Valuation Review going back to 1982.
BVLaw Review: The Top Valuation Cases of 2022
Here is our pick for the most noteworthy valuation cases that emerged over the past year. They include state and federal court decisions covering many areas of law that enhanced our understanding of valuation issues as they arose in a litigation setting.
BV News and Trends January 2023
A monthly roundup of key developments of interest to business valuation experts.
Global BV News and Trends January 2023
Business valuation news from a global perspective.
Ohio Appellate Court Remands Value of Businesses for Determination of Active Appreciation
This matter involved cross-appeals from a divorce decree in Trumbull County, Ohio. The focus of this digest relates to cross-appeals relating to the values of the husband’s businesses and the matter of active appreciation on those businesses.
Fordeley v. Fordeley
This matter involved cross-appeals from a divorce decree in Trumbull County, Ohio. The focus of this digest relates to cross-appeals relating to the values of the husband’s businesses and the matter of active appreciation on those businesses.
More courts KO DLOM when business won’t be sold
Keep an eye out for courts in more states deciding to eliminate a discount for lack of marketability (DLOM) depending on whether the business will be sold.
Global BV News: IPEV updates PE/VC valuation guidelines
International Private Equity and Venture Capital (IPEV), a trade group that sets valuation practices for private funds, has published the 2022 edition of its guidelines.
Values of tech brands have nosedived, per new study
Shifting consumer demand patterns and inflation have taken their toll on the world’s most valuable brands, particularly in the tech sector.
Business Valuation Case Law Yearbook, 2023 Edition
January 2023 PDF, Softcover (195 pages)
BVR (editor)
Business Valuation Resources, LLC
Business Valuation Update Yearbook, 2023 Edition
January 2023 PDF, Softcover (426 pages)
BVR (editor)
Business Valuation Resources, LLC