According to the International Glossary of Business Valuation Terms, goodwill is defined as: “That intangible asset arising as a result of name, reputation, customer loyalty, location, products, and similar factors not separately identified.” The remainder of value after subtracting identifiable tangible and intangible assets is goodwill. So when a business is valued under either the  Continue Reading »

Many Maine-based small business owners know some of the theory behind business valuation, but they might not know all of the procedures involved in the analysis and preparation of a report.  Clients and attorneys who understand how the valuation process works are better equipped to anticipate their experts’ needs and appreciate why valuators need to  Continue Reading »

Select Comfort Corp. v. Tempur Sealy Int’l, Inc.  An economic damages case featuring two major mattress manufacturers and claims of false advertising provides an insightful discussion of two theories of damages: disgorgement and lost profits. The court rejected one of the plaintiff expert’s two disgorgement models as not sufficiently tailored to the alleged wrongdoing and  Continue Reading »

The business valuation profession has undergone a large transformation since the 1980s, developing from a rudimentary process into a highly sophisticated mix of art and science. Even so, many small business owners and investors fail to understand the valuation process and its results. Here are some common business valuation myths and the underlying truths. Myth:When  Continue Reading »

Whether you are a practicing attorney, an investor, or a small business owner there may come a time when you need to read and understand a report written to support a conclusion of value for a business.  A well written valuation report is difficult to understand by those who are not well-versed in the terminology  Continue Reading »

In re Marriage of Cheng, 2016 Wash. App LEXIS 2854 (Nov. 22, 2016) A double-dip decision out of Washington State prompted a reader’s request for comment from veteran valuator Jim Alerding (Alerding Consulting), who frequently deals with divorce-related valuation issues. In In re Marriage of Cheng, the trial court determined that the nonbusiness owner spouse  Continue Reading »

Without the right information, answers can hard to figure out. In one case, the expert could not figure out why the company he was valuing kept on manufacturing and selling creosoted railroad ties, even though that division of the business had not been profitable for a long time. Also, the company was putting another $700,000  Continue Reading »

Sherwood Invs. Overseas Ltd. v. Royal Bank of Scot. N.V. (In re Sherwood Invs. Overseas Ltd., Inc, 2016 U.S. Dist. LEXIS 136096 (Sept. 30, 2016) A bankruptcy proceeding makes clear that, if an expert hopes to support a client’s position, he or she has to know more than the mechanics of calculating losses. The analysis  Continue Reading »

In today’s complex business world, shareholder disputes can be quite common. These disputes can be divisive, long-lasting and expensive, and can arise in almost any privately owned business. Some of the more common types of lawsuits that may be filed against controlling shareholders are: Dissenters Rights Actions Some state laws may give corporate shareholders the right  Continue Reading »

Dunmire v. Farmers & Merchants Bancorp of W. Pa., 2016 Del. Ch. LEXIS 167 (Nov. 10, 2016) In a statutory appraisal action, the Delaware Court of Chancery rejected the deal price as evidence of fair value, citing a suboptimal sales process. Only an income-based approach that the experts for both parties used represented a reliable  Continue Reading »