Category Archives: Valuations

Chancery Again Puts Trust in Merger Price Over Questionable DCF

December 30, 2016 | Court Rulings, Valuations

Merion Capital LP & Merion Capital II LP v. BMC Software, 2015 Del. Ch. LEXIS 268 (Oct. 21, 2015) Don’t second-guess the result of a robust, arm’s-length sales process! That’s the view the Delaware Court of Chancery has been taking lately in statutory appraisal actions—and it recently did so again. ‘Wildly divergent’ DCF results The  Continue Reading »

What Is the Correct Standard of Value in Divorce?

December 26, 2016 | Divorce Litigation, Valuations

The specialty of business valuation is evolving, and one recent development is the emergence of investment value as the appropriate standard of value in some divorce cases, rather than fair market value. This trend is important to monitor to ensure your valuation expert estimates the correct standard of value. If not, a court may disregard his  Continue Reading »

‘Reasonably Equivalent Value’ Analysis Meets FMV Standard, Court Says

December 16, 2016 | Court Rulings, Valuations

In re Mercury Cos., 2015 Bank. LEXIS 3443 (Oct. 9, 2015) (In re Mercury II) After filing for Chapter 11 bankruptcy, the plaintiff claimed the sale of certain subsidiaries to the defendant entities was an avoidable fraudulent transfer. The Bankruptcy Court considered the valuations the parties’ experts presented at trial for the subsidiaries “useful but  Continue Reading »

A Closer Look at the Market Approach

December 13, 2016 | Business Plans, Valuations

When valuing a business, there are three approaches: the cost, market and income approaches. In this article, we focus on the market approach, which the International Glossary of Business Valuation Terms defines as: A general way of determining a value indication of a business, business ownership interest, security, or intangible asset by using one or more methods  Continue Reading »

Trial Court Fumbles Economic Damages Assessment

December 2, 2016 | Court Rulings, Valuations

Lane v. Lampkin, 2015 Miss. LEXIS 503 (Oct. 8, 2015) (Lampkin II)  It’s not uncommon for a trial court to decide a valuation issue by “splitting the baby”—that is, reaching a compromise somewhere in the middle of the opposing figures. Often the decision, however puzzling, stands because the appeals court is reluctant to find an  Continue Reading »

Destruction of Financial Evidence in Damages Case

November 18, 2016 | Court Rulings, Valuations

Bruno v. Bozzuto’s, Inc., 2015 U.S. Dist. LEXIS 156339 (Nov. 19, 2015)  What goes around comes around. In a contract action, finance professionals made one bad decision after another, until the case collapsed under a Daubert challenge. ‘Most infamous plot twist’ A married couple owned and operated a small supermarket chain. The wife, an experienced  Continue Reading »

Tax Court Explains Valuation Method Behind Solvency Ruling

November 4, 2016 | Court Rulings, Valuations

Kardash v. Comm’r, 2015 Tax Ct. Memo LEXIS 198 (Oct. 6, 2015) (Kardash II) The Tax Court amended its prior ruling on transferee liability by determining that the taxpayer company was solvent a year longer than the court originally had found. In so doing, the court acknowledged errors that had crept into its earlier assessment  Continue Reading »

Business Debt Renders Expert’s Lack of BV Credentials Inconsequential

October 21, 2016 | Court Rulings, Divorce Litigation, Valuations

Sternat v. Sternat, 2015 Wisc. App. LEXIS 776 (Oct. 28, 2015) A recent divorce case featured a noteworthy challenge to the prevailing testimony of the wife’s expert. The husband claimed the opinion of the wife’s expert was unreliable because the expert had fewer credentials as a business valuator than did the husband’s expert. The court  Continue Reading »

A New Twist on Personal Goodwill in Divorce Cases

October 17, 2016 | Court Rulings, Divorce Litigation, Valuations

A question presented in a Wisconsin case could have a far-reaching impact on divorce valuation; should salable (transferrable) personal goodwill remain in the marital estate in a divorce? The Supreme Court of Wisconsin upheld both its lower and appellate courts in this particular case. The case allowed salable personal goodwill to remain in the marital  Continue Reading »

Court Decides Daubert Attack ‘Misses the Mark’

October 7, 2016 | Court Rulings, Valuations

Deflecto, LLC v. Dundas Jafine Inc., 2015 U.S. Dist. LEXIS 149447 (Nov. 4, 2015) A Daubert attack in which the challenger threw every possible objection at the plaintiff expert’s damages testimony fizzled. The opponent claimed the expert revealed a lack of understanding of critical aspects of patent law, and it suggested his use of a  Continue Reading »