Category Archives: Valuations

Covenants Not to Compete and Personal Goodwill

July 11, 2016 | Business Plans, Court Rulings, Divorce Litigation, Financial Planning, Valuations

A covenant not to compete prevents the seller from competing in the same industry for a specified time period and within a specified geographic range, and on the part of the seller, is similar to title insurance to the buyer of the business. In this sense, it protects the buyer from the loss of value tied to  Continue Reading »

Noncompete-Goodwill Relationship in Spotlight Again

July 1, 2016 | Court Rulings, Divorce Litigation, Valuations

K.T. v. M.T., 2015 Tex. App., LEXIS 8558 (Aug. 13, 2015) Can a solo practice have commercial goodwill, and how do fair market value and the notion of a covenant not to compete (CNTC) fit into the picture? A recent Texas divorce case raised all of these questions and resulted in a predictable outcome. Non-transferable  Continue Reading »

Divorce Valuations: Active versus Passive Appreciation

June 27, 2016 | Court Rulings, Divorce Litigation, Valuations

In divorce cases it’s common for an interest in a closely held business or professional practice to be the marital estate’s most valuable asset. In many states, a valuator may be called upon to distinguish between active appreciation in the business’s value (which is generally subject to division) and passive appreciation (which generally isn’t) when the  Continue Reading »

Damages Expert Stumbles Over Causation

June 17, 2016 | Court Rulings, Valuations

Rowe v. DPI Specialty Foods, 2015 U.S. Dist. LEXIS 110605 (Aug. 19, 2015) Causation confounds even experienced valuators. A common mistake is not to address it at all and risk exclusion under Daubert. But a recent decision presents the opposite situation: an expert who made causation his be-all and end-all and improperly expanded the role  Continue Reading »

Two Divorce Cases Provide Valuable Insight

June 13, 2016 | Court Rulings, Divorce Litigation, Valuations

In this article we will discuss two appellate court cases that teach valuable lessons that apply when valuing a business interest in divorce. Legal precedent related to the use of expert witnesses and business appraisals in divorce tends to vary from state to state. But it’s important to monitor case law across the country for emerging  Continue Reading »

Business Valuation Approaches

June 6, 2016 | Valuations

How would you value a business?  Although the techniques sound simple, do-it-yourself appraisals can generate misleading results. Each business requires a customized approach, as well as fine-tuning and subtle nuances, and each. The three approaches appraisers use to value a business may seem like a matter of common sense. You start with the balance sheet  Continue Reading »

Chancery Gives High Marks to Financial Advisor’s Merger Work

June 3, 2016 | Court Rulings, Valuations

In re Dole Food Co., 2015 Del. Ch. LEXIS 223 (Aug. 27, 2015) (Dole III) In sharp contrast to some of its earlier decisions reprimanding financial advisors for generating outcome-driven valuations, the Delaware Court of Chancery recently extolled the conduct of the financial advisor in a highly contested take-private merger. It noted the firm’s “thorough  Continue Reading »

Why Business Owners Don’t Plan for Succession and Why it’s Critical

May 23, 2016 | Business Plans, Financial Planning, Valuations

It can be difficult to plan for your replacement and deal with your mortality, which is why many Maine business owners procrastinate putting a well-conceived succession plan in place. The reasons are understandable. However, there are many reasons why it’s best to make a proactive plan. Here are five of the top reasons why business owners  Continue Reading »

Complex Facts Test Patent Experts’ Apportionment Skills

May 20, 2016 | Court Rulings, Valuations

Finjan, Inc. v. Blue Coat Systems, Inc., 2015 U.S. LEXIS 91528 (July 14, 2015) What apportionment techniques can a damages expert use to ensure the capture of the proceeds from the infringing features but not the noninfringing components? This question dominated a recent Daubert case in which both parties claimed the rival expert’s apportionment rendered  Continue Reading »

Tennessee Appeals Court Straddles Goodwill Issue in Divorce

May 6, 2016 | Court Rulings, Divorce Litigation, Valuations

Lunn v. Lunn, 2015 Tenn. App. LEXIS 515 (June 29, 2015) Tennessee divorce courts seem divided on how to treat the goodwill of a business, specifically on the question of whether to adopt a distinction between enterprise and personal goodwill. The current rule seems to be that, if the business is a solo practice, goodwill  Continue Reading »