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 »

The income approach is a common choice when appraisers are selecting appraisal techniques. Value is found with this technique by converting future economic benefits into their net present value. Long-term sustainable growth is a key part of this. Capitalization of Earnings Method When valuing a business under the income approach, the following formula is used, assuming the  Continue Reading »

Ramundo v. Ramundo, 2017 N.J. Super. Unpub. LEXIS 443 (Feb. 24, 2017) A New Jersey divorce case revolving around the valuation of a chiropractic practice is a good example of how a skilled valuation expert may produce a credible, if incomplete, appraisal when denied access to vital information by the opposing party. Here, even though  Continue Reading »