From time to time, every small business owner wonders what the value of their business is. The correct answer can vary, depending on the purpose of the appraisal. Different rules and standards of value may apply in different circumstances. Some of the reasons a business owner may want a valuation include: General business planning, planning  Continue Reading »

In re ISN Software Corp. Appraisal Litig., 2016 Del. Ch. LEXIS 125 (Aug. 11, 2016) A recent request for statutory appraisal prompted a familiar lament from the Delaware Court of Chancery about the questionable reliability of expert valuations. Three experts presented value conclusions that were eons apart. The court declined to adopt any one opinion  Continue Reading »

Historic performance does not directly determine the value of a business. Instead, investors are more interested in the future economic benefits the business will generate. Past performance is only relevant to the extent that it demonstrates trends and is expected to continue going forward. This forward-looking approach applies whether an appraiser uses the cost, market  Continue Reading »

Mattress Closeout Ctr. IV, LLC v. Panera, LLC, 2016 U.S. Dist. LEXIS 91881 (July 15, 2016) Courts are not looking to experts for creative ways to calculate damages. They want a calculation based on reasonable certainty. In a recent case, the court decided to throw out most of the plaintiff’s damages claims before the case  Continue Reading »

When considering the value of your Maine-based small business, you may not have considered what standard is used in the determination. It can be a fairly important question that affects how the valuation turns out. Any qualified valuation report should state the standard of value used in determining the value in the very beginning of  Continue Reading »

Lacoste v. Lacoste, 2016 Miss. App. LEXIS 460 (July 19, 2016)  A recent Mississippi divorce case highlights the complexity of valuing a small family business as well as the importance of an accurate valuation to achieving an equitable distribution of marital assets. Neither party in the case retained an expert, prompting the trial court to  Continue Reading »

Most business valuators offer two types of appraisal services. Formal valuations are the most common, and require significant time and in-depth analyses. Sometimes, however, a less formal calculation of value will do, as long as it’s not expected to stand up to outside scrutiny. Key Differences Formal valuations generate an official conclusion in accordance with the  Continue Reading »

In re DFC Global Corp., 2016 Del. Ch. LEXIS 103 (July 8, 2016) A recent fair value decision from the Delaware Court of Chancery turned on the idea of uncertainty. Impending regulatory changes in key markets made it hard to predict the company’s future performance. Shaky forecasts raised doubts about the reliability of the results  Continue Reading »

Most Maine-based businesses today have valuable intellectual property. Valuing it can be difficult, as the most commonly applied valuation methods of market, income and cost, aren’t always effective when valuing intellectual property. For this reason, professional valuators often turn to the the royalty method for these unique assets. Most intellectual property generally falls into one  Continue Reading »

How to classify gains and losses from selling an asset in Maine is fairly straightforward most of the time. However, there are some gray areas that require a closer look at the facts and circumstances, especially when real estate is involved, as a couple of recent cases demonstrate. Why It Matters Distinguishing between capital and  Continue Reading »