Jensen v. Jensen, 2018 Mich. App. LEXIS 40 (Jan. 9, 2018) This Michigan divorce case involving an S corporation that was the owner’s separate property raised a number of valuation-related questions, including an issue of first impression: Are the earnings a closely held company retains during the marriage includable in the marital estate, such that  Continue Reading »

Brundle v. Wilmington Trust N.A. The case involved a short-lived ESOP whose structure was unusual in that the sellers—the principal shareholders in a private security firm—agreed to sell 90% of their shares to the ESOP and exchange the remaining 10% for warrants. The warrants allowed the sellers to buy back equity in the company and  Continue Reading »

Lally Orange Buick Pontiac GMC, Inc. v. Sandhu Although both sides in a Florida judicial appraisal action offered expert opinions on the value of a car dealership, the trial court used a valuation whose author and methodology were unknown. In rejecting the lower court’s finding, the appeals court provides a review of the principles applicable  Continue Reading »

r2 Advisors, LLC v. Equitable Oil Purchasing Co. (In re Red Eagle Oil, Inc.) When the distributor of Exxon-branded fuel ran into financial trouble, it agreed to transfer its rights to supply several retail stores to the defendant in exchange for the latter’s assumption of the debtor’s liability to Exxon. After the debtor filed for  Continue Reading »

Bair v. Bair When appraisers deal with the issue of appreciation of nonmarital property, they often think in terms of “active versus passive.” A Florida divorce case shows that the rigid adoption of this framework may result in an erroneous valuation. Cannot pick and choose: The parties fought over the valuation of the marital portion  Continue Reading »

TiVo Research & Analytics, Inc. v. TNS Media Research LLC A damages case involving significant amounts of money began to unravel when the trial court excluded the plaintiff’s expert, saying the damages opinion failed the causation requirement. The plaintiff’s subsequent effort to prove its claim through lay witness testimony also came to nothing. On remand,  Continue Reading »

Perez v. First Bankers Trust Services, Inc. Close on the heels of the Brundle case, in which the court ruled the ESOP trustee was liable for a $28 million overpayment, comes a second decision finding trustee liability. In tandem, these cases drive home the point that an ESOP trustee is ultimately accountable for determining fair  Continue Reading »

Matter of Digeser v. Flach A New York statutory fair value decision involving a construction company highlighted key differences in the experts’ income-based valuations. The parties’ appraisers disagreed over the applicable earnings period, normalization for non-arm’s-length dealings between related companies, and the applicable tax rate. The court’s resolution provides insight into what arguments did and  Continue Reading »

Buy-sell agreements protect businesses with multiple owners in the event that one of the owners dies, becomes disabled, or voluntarily decides to leave the company. The agreement should dictate who can buy the departing owner’s interest, when, how and for how much. Ideally, these contracts are set up when a business is launched, but they can always be  Continue Reading »

Merion Capital L.P. v. Lender Processing Servs., 2016 Del. Ch. LEXIS 189 (Dec. 16, 2016) The adage is that the Delaware Court of Chancery has a bias toward the discounted cash flow analysis when determining fair value in statutory appraisal actions. Yet, in the past few years, the court repeatedly has adopted the deal price,  Continue Reading »