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NY Business Divorce Information on Dissolution and Other Disputes Among Owners of New York Corporations, LLCs and Partnerships

Category Archives: Fair Market Value vs. Fair Value

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Court Rejects Marketability Discount, Applies “Murphy Discount” for Built-In Gains, in Determining Fair Value of Shares in Real Estate Holding Corporations

Posted in Fair Market Value vs. Fair Value, Family-Owned Businesses, Valuation, Valuation Discounts

Business valuation junkies, rejoice! This week’s New York Business Divorce revisits the Giaimo case, a bitter family business dispute being litigated in Manhattan Supreme Court, following a decision last week by Justice Marcy Friedman concerning a fair value determination by Referee Louis Crespo of a stock interest in two real estate holding “C” corporations, in which the discounts for lack of marketability and for built-in gains taxes take center stage.

Court Rejects Minority and Marketability Discounts in Assessing Damages for Breach of Equity Participation Agreement

Posted in Fair Market Value vs. Fair Value

This week’s New York Business Divorce examines a noteworthy decision by Manhattan Supreme Court Justice Marylin Diamond in Cole v. Macklowe, where she precluded the defendant’s valuation expert from testifying on the applicability of minority and marketability discounts in valuing the plaintiff’s equity interests in a series of single-asset real estate holding companies.

Ruling on Valuation Discounts for Marketability, Built-In Gains Tax Ends Rift Among New York Appellate Courts

Posted in Buyout, Dissenting Shareholder Appraisal, Fair Market Value vs. Fair Value, Valuation, Valuation Discounts

The Appellate Division, Second Department last week affirmed the key rulings by Justice Ira Warshawsky in the Murphy v. U.S. Dredging valuation case, including his application of a marketability discount to entire enterprise value rather than limiting it to good will. Learn more in this week’s New York Business Divorce.

In Unusual Case, Illinois Appellate Court Reduces Fair Value Award to Dissenting Shareholder

Posted in Dissenting Shareholder Appraisal, Fair Market Value vs. Fair Value, Valuation

An Illinois appellate court recently ruled in an unusual dissenting shareholder case on the valuation of shares in a single asset, real estate “C” corporation. It’s a highly interesting decision, pitting equitable considerations against valuation orthodoxy. You can either guess which prevailed, or you can read this week’s New York Business Divorce.

What’s the Difference Between Marketability and Minority Discounts?

Posted in Accountants/Experts, Buyout, Fair Market Value vs. Fair Value, Valuation, Valuation Discounts

Valuation discounts are among the most hotly contested issues in minority shareholder buy-out proceedings triggered by dissolution petitions. As between the discount for lack of marketability and the minority discount (a/k/a discount for lack of control), New York case law allows one of them and prohibits the other. Do you know which is which? Find out in this week’s New York Business Divorce.

A Case of Mutual Frustration: Minority Member of LLC Can’t Compel Dissolution, Majority Can’t Compel Buyout

Posted in Buyout, Capital Call, Fair Market Value vs. Fair Value, Grounds for Dissolution, LLCs

It’s the perfect LLC storm: Accusations by the minority member of overreaching and breach of fiduciary duty by the controlling members, no operating agreement, and an LLC statute that affords neither party a judicial means of achieving the separation they each want. Read about it in this week’s New York Business Divorce.

Court Discounts Fair Value Award for Built-In Gains Tax in Shareholder Oppression Case

Posted in Accountants/Experts, Buyout, Fair Market Value vs. Fair Value, Valuation, Valuation Discounts

Justice Ira Warshawsky of Nassau County Supreme Court’s Commercial Division has issued a “BIG” decision (as in discount for Built-In Gains tax) in a stock valuation arising out of a dissolution proceeding brought by minority shareholders claiming oppression. Read about it in this week’s New York Business Divorce.

Court Refuses to Apply Marketability and Minority Discounts in Valuing Deceased Partner’s Interest

Posted in Fair Market Value vs. Fair Value, Family-Owned Businesses, Partnerships, Valuation, Valuation Discounts

Is there a difference in determining the “value” of a partnership interest under Partnership Law Section 73 and the “fair value” of a stock interest under the Business Corporation Law? This week’s New York Business Divorce looks at a recent New York appellate decision that answers the question in a dispute over application of discounts for lack of control and lack of marketability.

Fair Value vs. Fair Market Value

Posted in Fair Market Value vs. Fair Value, Valuation, Valuation Discounts

New York’s statutes governing buyouts in dissolution and dissenting shareholder cases use the term “fair value” (FV) as the standard used to determine purchase price. The statutes do not define FV. In contrast, “fair market value” (FMV) is a widely recognized standard of value used in the business world, in tax assessment proceedings and elsewhere. The International Glossary of Business… Continue Reading

Big News for BIG Discount

Posted in Fair Market Value vs. Fair Value, Valuation, Valuation Discounts

Business appraisers generally apply discounts of one sort or another to value an interest in a closely held business entity. Discounts for lack of control (DLOC) and lack of marketability (DLOM) are most commonly used, depending on the context (estate taxes, matrimonial divorce, dissenting shareholder appraisal, etc.) and the applicable standard of value (fair market… Continue Reading