Category Archives: Valuations

Court of Chancery Sanctions Use of Asset Approach in Complex Appraisal Case

January 25, 2021 | Court Rulings, Valuations

In re Happy Child World, Inc. A low-profile appraisal case in front of the Delaware Court of Chancery raised important valuation questions, including how the court should determine the fair value of a nonoperating entity and how it should deal with the value of claims both parties brought on behalf of the company prior to  Continue Reading »

Minnesota Court Rejects DLOM in Major Buyout Case

December 14, 2020 | Court Rulings, Valuations

Lund v. Lund A Minnesota district court ended (at least for now) a minority owner’s long struggle to sell her interest in a well-known Minneapolis family business. The case featured prominent valuators and a judge well versed in valuation jurisprudence, and it adds another jurisdiction’s view on the use of the marketability discount in fair  Continue Reading »

New DOL Process Agreement Confronts Control Issue in ESOP Valuations

November 30, 2020 | Court Rulings, Valuations

Scalia v. Farmers National Bank of Danville & Weddle Bros. Const. Co. The Department of Labor recently settled ESOP litigation with the trustee Farmers National Bank of Danville (FNB). The settlement incorporates a process agreement that contains noteworthy directives instructing the trustee on handling controlling interest acquisitions and indemnification matters. This is the sixth such  Continue Reading »

Calculations of Value Are Admissible in Divorce, Alabama Appeals Court Confirms

November 16, 2020 | Court Rulings, Divorce Litigation, Valuations

Horne-Ballard v. Ballard About two years ago, in Rohling v. Rohling, an Alabama appeals court upheld a trial court’s decision to admit into evidence a qualified expert’s estimate about the value of the owner spouse’s business based on a calculation engagement. Recently, the admissibility of calculations of value became an issue in another divorce case,  Continue Reading »

‘Particular Facts’ Justify Discounts in Mandatory Buyback of Minority Interest, Says Missouri High Court

November 2, 2020 | Court Rulings, Valuations

Robinson v. Langenbach Context is “crucial,” the Supreme Court of Missouri recently said in upholding the use of discounts in the court-ordered buyout of a minority owner’s shares in a family business. At the same time, the court acknowledged that, “usually,” the rationale for discounts in a mandated sale to a majority stockholder “would have  Continue Reading »

Tax Court Spurns IRS’ Gift Tax Valuation Theory and Methodology

October 19, 2020 | Court Rulings, IRS Regulation, Valuations

Grieve v. Commissioner In a gift tax dispute, the U.S. Tax Court recently found for the taxpayer when it rejected the unusual reasoning and methodology the Internal Revenue Service’s trial expert proposed to keep low the discounts applicable to the nonvoting membership units in two limited liability companies (LLCs). Nonmarketable, noncontrolling interest In late 2013,  Continue Reading »

Indiana and South Carolina Courts Issue Key Discount Rulings

October 5, 2020 | Court Rulings, Valuations

The Indiana Court of Appeals and the South Carolina Supreme Court recently issued noteworthy rulings on the appropriateness of discounts in valuing minority interests. The contexts in which the issue arose were different, but, in both cases, there was a compelled sale and designated buyer. Hartman v. BigInch Fabricators & Construction Holding Co., Inc. In  Continue Reading »

North Carolina Court Looks to Deal Price for Fair Value in Tobacco Merger

September 21, 2020 | Court Rulings, Valuations

Reynolds American Inc. v. Third Motion Equities Master Fund Ltd. The importance of Delaware appraisal jurisprudence beyond state borders was on display in a recent fair value decision out of North Carolina related to a merger involving the tobacco giant Reynolds. After an exhaustive analysis of the facts and Delaware legal principles, the North Carolina  Continue Reading »

Court Finds Delayed Disclosure of Expert’s Complete Report ‘Substantially Justified’

August 24, 2020 | Court Rulings, Valuations

Wright v. Old Gringo, Inc. In this discovery dispute, the defendants sought to exclude the plaintiff expert’s valuation report, arguing it was untimely and the late disclosure would hurt the defendants. In rejecting the defense motion, the court noted any delay was largely caused by the defendants’ discovery tactics to thwart production of vital financial  Continue Reading »

Synergy Deduction Purely Academic in New Delaware Appraisal Ruling

July 27, 2020 | Court Rulings, Valuations

In re Panera Bread Company In a statutory appraisal case that involved the sale of a publicly traded company to a privately held entity, the Delaware Court of Chancery recently decided the deal price was a reliable indicator of fair value and a downward adjustment for synergies was justified but not practicable. But, because the  Continue Reading »