Category Archives: Valuations

Double-Dip Claim Fails to Resonate With Appeals Court

February 23, 2018 | Court Rulings, Divorce Litigation, Valuations

In re Marriage of Kirkendoll 2016 Wash. App. LEXIS 2357 (Oct. 4, 2016) In a Washington state divorce case, the appeals court delved into “the notion of the impermissible ‘double dip’” and explained why the concept was not applicable to the facts of the case. The dispute centered on the couple’s only income-generating asset, a  Continue Reading »

Federal Circuit Discusses Rationale Behind Different Measures of Damages

February 9, 2018 | Court Rulings, Valuations

Danmark v. CMI USA, Inc., 2016 U.S. App. LEXIS 21672 (Dec. 6, 2016) In a reasonable royalty analysis, how much emphasis may an expert place on the patent holder’s profit margin before the analysis becomes a lost profits calculation in disguise? In answering this question, the Federal Circuit explained the different thinking behind the pursuit  Continue Reading »

Florida Supreme Court Nixes Daubert Amendment

January 26, 2018 | Court Rulings, Valuations

In 2013, Florida’s legislature rejected the long-standing Frye standard on the admissibility of expert witness testimony and adopted the Daubert standard and Federal Rule of Evidence 702 with two amendments to the state’s Evidence Code. Subsequently, The Florida Bar’s Code and Rules of Evidence Committee challenged the legislative changes with the state Supreme Court. Arguing  Continue Reading »

Think You Don’t Need a Written Contract? Think Again

January 17, 2018 | Accounting Standards, Business Plans, Financial Planning, Valuations

You’ve probably heard the old saying, “a verbal contract isn’t worth the paper it’s written on.” Yet many business owners and executives still enter into handshake deals. This can create problems later on that could have been easily avoided by simply getting things in writing. There’s nothing wrong with ironing out the details of a transaction  Continue Reading »

Market Data Approach ‘Particular Unsuitable’ to Valuing Feature Film

January 12, 2018 | Court Rulings, Valuations

Holder v. Howe, 2016 Cal. App. Unpub. LEXIS 8989 (Dec. 14, 2016) A bankruptcy-related suit in front of the California Court of Appeal turned on the issue of how to value an aged film that never made any money. The trial court dismissed the plaintiff expert’s approach as “illogical.” The appeals court agreed the method  Continue Reading »

What Should You Expect in an Expert

January 5, 2018 | Valuations

When choosing financial expert for a litigation matter, recommendations from other attorneys or reputation along are often the deciding factor. But even if an expert is known as the best expert in their particular area, they may not be a good fit for every attorney. It makes sense for an engaging attorney to interview the  Continue Reading »

Reasonable Compensation Analysis Ignores Objective Evidence, Tax Court Says

December 29, 2017 | Court Rulings, IRS Regulation, Valuations

Transupport, Inc. v. Commissioner, 2016 Tax Ct. Memo LEXIS 214 (Nov. 23, 2016) Expert independence was front and center as an issue in the Exelon tax case. Now comes, a reasonable compensation case in which the Tax Court zeroed in on the same point. The court rebuked an experienced compensation analyst for what it perceived  Continue Reading »

Working Capital: A Potential Valuation Sleeper

December 20, 2017 | Accounting Standards, Business Plans, Valuations

When a business is being valued, sometimes working capital can be overlooked. It is important to remember, however, as it can have a material effect on value. Working capital is defined as the difference between a business’ current assets and current liabilities. If an appraiser is using the income or market approach to determine a  Continue Reading »

Shareholder Approval ‘Cleanses’ Potential Undervaluation

December 15, 2017 | Court Rulings, Valuations

In re OM Group, Inc. Stockholders Litig., 2016 Del. Ch. LEXIS 155 (Oct. 12, 2016.) Shareholders protesting what they considered a rushed sale at a bargain basement price suffered defeat in the Delaware Court of Chancery when the court ruled strong shareholder approval of the proposed merger had taken care of any problematic conduct on  Continue Reading »

Chancery Says Control Premiums Are Real and Legitimate

December 8, 2017 | Business Plans, Court Rulings, Valuations

In re Books a Million Stockholders Litig., 2016 Del. Ch. LEXIS 154 (Oct. 10, 2016) The Delaware Court of Chancery dismissed a minority shareholder challenge to a going-private merger, concluding the defendant directors did not act in bad faith when they favored the controlling shareholders’ bid over a third-party buyer’s higher offer. The dispute arose  Continue Reading »