Category Archives: Valuations

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 »

When Goodwill Takes Center Stage

December 6, 2017 | Financial Planning, Valuations

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 »

The ABCs of Business Valuation

November 24, 2017 | Business Plans, Valuations

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 »

Court Disapproves of Use of Damages Model to Establish Liability

November 17, 2017 | Court Rulings, Valuations

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 »

Myths and Truths about Business Valuation

November 13, 2017 | Business Plans, Valuations

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 »

Understanding Business Valuation Reports

November 8, 2017 | Valuations

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 »

Alerding Comments on Washington State Double-Dip Analysis

November 3, 2017 | Court Rulings, Valuations

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 »

Does Your Expert Know What Is Being Valued?

October 25, 2017 | Valuations

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 »

Case Collapses When Experts Apply Wrong Measure of Damages

October 20, 2017 | Court Rulings, Valuations

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 »