Kardash v. Commissioner, 2015 Tax Ct. Memo LEXIS 69 (March 18, 2015) A Tax Court memo resulting from a transferee liability case includes an informative discussion of the valuation methodologies the parties’ solvency experts used to determine the company’s fair market value at the point when various contested transfers of payment took place. The court’s  Continue Reading »

Schickner v. Schickner, 2015 Ariz. App. LEXIS 48 (April 16, 2015) In the context of divorce, may a court apply a minority discount when valuing a minority interest in a business to determine the nonowner spouse’s fair share? This was the primary issue the Arizona appeals court addressed in ruling on the wife’s claim that  Continue Reading »

Private equity funds offer a way to get a capital infusion for your Maine-based company for a period of time while maintaining a role in its operation and avoiding a sale or a merger. It’s called equity recapitalization and it typically involves selling a minority or majority stake in your company to a private equity fund.  Continue Reading »

Have you ever heard a business owner brag, “I was offered $X million for my business!”, or have you been lucky enough to receive an offer from another party to purchase your private business stock? It seems that such offers reveal how much an objective third party thinks your business is worth. However, a purchase offer  Continue Reading »

In re Honer, 2015 Cal. App. Unpub. LEXIS 2531 (April 9, 2015) In a bitter California divorce, the valuation of two grocery stores was a sore point. The wife attacked the work of the husband’s expert because he used what he called the “marital value.” The appeals court seemed surprised by the term and discussed  Continue Reading »

There is a common perception that financial expert witnesses are biased in favor of their clients’ financial interests. In truth, credentialed professionals must adhere to various ethical standards that require them to be independent and objective when serving as an expert witness in a litigation matter. However, there are times when experts aren’t provided with  Continue Reading »

Which would you (or one of your clients) rather receive in a divorce settlement: cash or stock in a closely held business that is controlled by your former spouse? When divorce gets ugly, and it often does, cash might be a safer bet than in-kind distributions, but the answer depends on the amount of cash, the  Continue Reading »

Value is relative. Some assignments require the valuation of a minority interest that may lack control and “marketability,” while others call for an appraisal of the entire entity on a controlling basis. How do these situations differ, and how are these differences accounted for by a valuator? Level of Value The ability to sell an investment  Continue Reading »

Chancery Adopts Merger Price Sans Cost Savings Reduction Merlin Partners LP v. AutoInfo, Inc., 2015 Del. Ch. LEXIS 128 (April 30, 2015) In a Delaware statutory appraisal action, the Chancery once again determined that the merger price trumped values resulting from other valuation analyses. But before “placing full weight on the Merger price,” Vice Chancellor  Continue Reading »

Business valuations are prepared as of a specific date, similar to balance sheets. Sometimes a valuation’s effective date is in the past, and events have occurred after the valuation date that would have impacted the company’s value if investors knew (or could have known) about them beforehand. These retrospective valuations are common in litigation and  Continue Reading »