Category Archives: Court Rulings

Creditors’ Valuation Spoils Diminution in Value Claim

May 2, 2014 | Court Rulings, Valuations

In re Residential Capital, LLC, 2013 Bankr. LEXIS 4844 (Nov. 15, 2013) A recent ruling in the multifaceted Chapter 11 bankruptcy litigation of Residential Capital (ResCap) contains a noteworthy analysis of the alleged diminution in value of the collateral of junior secured noteholders (JSNs). Bankruptcy experts have observed that only a few decisions have tried  Continue Reading »

Hard Asset Value Best Captures Worth of Family Business

April 11, 2014 | Court Rulings, Valuations

Starling v. Starling, 2013 Va. App. LEXIS 248 (Sept. 10, 2013) (slip op.) Because the trial court found neither spouse’s expert offered a convincing valuation for a family business, it opted to adopt the liquidation value the company’s CPA proposed. On appeal, the husband contested both the trial court’s classification of the business as hybrid  Continue Reading »

Reliable or obsolete? DE Chancery Scrutinizes Precrisis Projections

March 25, 2014 | Court Rulings, Valuations

Towerview LLC v. Cox Radio, Inc., 2013 Del. Ch. LEXIS 139 (June 28, 2013) Five years after the 2008 economic meltdown, observers look back with a good deal of hindsight. But when the Delaware Court of Chancery recently assessed the reliability of prerecession management projections for its discounted cash flow analysis (DCF), hindsight is precisely  Continue Reading »

Reeling in Tax Deductions for Company Outings

March 12, 2014 | Accounting Standards, Court Rulings, Financial Planning

A “working condition fringe benefit” is tax-free to your employees and deductible by your Maine-based company. To qualify for this tax-favored treatment, however, the expense must be “ordinary and reasonable” under the circumstances. In addition, if the benefit involves recreation, amusement or entertainment, the expense must be directly related to, or associated with, your small  Continue Reading »

Meal Deductions: Tax Rest for the Weary

March 5, 2014 | Accounting Standards, Court Rulings

In one significant case, the Tax Court allowed a taxpayer to claim deductions for meals that stretch the limits of the traditional “sleep-or-rest” rule for business travelers. (Bissonnette, 127 TC No. 10) Background Generally, you can deduct 50 percent of your meals and all incidental expenses when you are away from home on business. The  Continue Reading »

Harsh Words From the Court For Underperforming Experts

March 3, 2014 | Court Rulings, Valuations

In re Eastman Kodak Company, 2013 Bankr. LEXIS 3325 (Aug. 15, 2013) Valuation experts who take on an engagement for which they lack the qualifications or the time risk a tongue-lashing in court, as a recent bankruptcy case demonstrates. This case highlights the importance of having a highly qualified valuation expert. For more on this,  Continue Reading »

IRA-Based Business Strategy Runs Afoul of Tax Regulations

January 29, 2014 | Accounting Standards, Business Plans, Court Rulings, IRS Regulation, Tax Planning, Tax Preparation

A recent report from the New York Times makes it clear that aspiring business owners commonly use their retirement accounts to get their new ventures off the ground. But, as a recent tax court case illustrates, what may seem like a smart investment strategy can go awfully wrong when the budding investor disregards expert advice  Continue Reading »

Court Decisions Make it Easier to Deduct LLC Losses

January 24, 2014 | Business Plans, Court Rulings, IRS Regulation, Tax Planning

What happens if you’re the owner of a limited liability company (LLC) that generates tax losses, and you don’t spend a lot of time in the activities of the business? The losses might be classified as passive, and your ability to currently deduct them might be severely restricted by the passive activity loss (PAL) rules.  Continue Reading »

The Importance of Keeping Non-Compete Agreements Specific

January 10, 2014 | Court Rulings, Uncategorized, Valuations

When using non-compete clauses in employment contracts, company managers should be mindful that such provisions are better able to withstand legal challenges if they are narrowly tailored. As an attorney, your business clients should consult with you before using these clauses. When an employee challenges a non-compete agreement, courts often look at whether the agreement  Continue Reading »

The Limits of a Successful Daubert Challenge

December 30, 2013 | Court Rulings, Valuations

In the wake of the 1993 Daubert case, challenges against expert witnesses in stock valuation cases have found greater success. Still, not all Daubert disputes succeed. One case before the U.S. Court of Federal Claims helped clarify how one party can successfully challenge the qualifications or methodologies of an expert witness. The case involved a dispute over  Continue Reading »