March 15, 2021 | Accounting Standards, IRS Regulation, Tax Planning, Valuations
As a small business owner, you need to ensure that your compensation reflects what others would receive for performing similar duties in a similar setting. Not only is this important for tax purposes, but it’s needed to determine the value of your business. Total Compensation Package As the business owner, you’re likely to have related Continue Reading »
February 8, 2021 | Court Rulings, Valuations
Magarik v Kraus Earlier this year, a New York trial court presiding over a buyout dispute featuring an online wholesaler of faucets, sinks, and fixtures rebuffed the departing shareholder’s valuation. His expert’s discounted cash flow analysis collapsed on account of unreasonable projections that the company had used to secure a loan from a bank. Dubious Continue Reading »
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 »
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 »
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 »
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 »
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 »
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 »
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 »
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 »