Photo of Peter A. Mahler

Peter A. Mahler is a litigator focusing on business divorce cases involving dissolution and other disputes among co-­owners of closely held business entities, such as limited liability companies, corporations, and partnerships. Peter represents both control and non-control owners, often involving family-owned businesses. Frequently counseling business owners prior to litigation, he advises them of their rights and also assists in designing and negotiating an amicable separation between parties. Peter’s counsel helps avoid litigation by means of a buy-out, sale, or division of business assets.

 

 

I’m pleased to present a guest post on an important valuation topic by business appraiser Jeffrey M. Risius (jrisius@srr.com).  Jeff is a Managing Director at Stout Risius Ross, Inc., a financial advisory firm specializing in valuation and financial opinions, investment banking, and dispute advisory and forensic services. Jeff specializes in valuation in a litigation setting including shareholder proceedings, bankruptcy matters and transaction disputes.  Jeff’s below post elegantly explains one of the fundamental aspects of business appraisal, namely, ascertaining the equity risk premium component of the capitalization rate used in the discounted cash flow ("DCF") method.  As you’ll read, this issue took front and center in a recent decision by the Delaware Chancery Court.  I think you’ll find it very informative. – P.A.M.      

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One commonly applied methodology in the valuation of businesses is the Discounted Cash Flow (“DCF”) Method. The premise of this method is that a company’s value is equal to the present value of all future cash flows expected to be generated by that company using a rate of return that incorporates the time value of money and the business risk associated with the cash flows. The appropriate rate of return to utilize in the DCF Method is closely related to the perceived level of risk associated with the projected cash flows.Continue Reading Guest Post: Business Appraiser Jeff Risius on the Equity Risk Premium

In two recent decisions, courts in Delaware and New York addressed obligations of non-managing members of LLCs to maintain the confidentiality of company trade secrets. These cases provide important lessons for attorneys who prepare LLC operating and employment agreements. It’s in this week’s New York Business Divorce.

Continue Reading Keeping the Gag on Ex-Business Partners: LLCs and Confidentiality Agreements

This week’s New York Business Divorce revisits an important topic, involving mandatory stock buybacks triggered by the filing of a dissolution petition, prompted by a recent decision by an upstate appellate court in Matter of Stevens (Allied Builders, Inc.).

Continue Reading Appellate Court Rejects Mandatory Stock Buyback Triggered by Dissolution Petition

Many shareholder and operating agreements provide redemption rights at a price stated in an appended certificate of value which is supposed to be updated periodically but often is not. A recent decision by Justice Stephen A. Bucaria addresses potential liability when the certificate of value is not timely updated. Learn more in this week’s New York Business Divorce.

Continue Reading The Stakes Just Went Up for Failing to Update Certificate of Value

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.

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

The venerable, closely-held business corporation may be on its last legs. Looking at some recently published statistics on new entity filings, it’s clear that the young upstart, the limited liability company, has already far surpassed its elder. So why does New York lag behind the rest of the country in the LLC revolution? It’s in this week’s New York Business Divorce.

Continue Reading Statistics Show New York Lagging in the LLC Revolution

An appellate decision this month, in Matter of Eklund Farm Machinery, Inc., spotlights anew the inadequate statutory compensation scheme governing court-appointed receivers in corporate dissolution proceedings. It’s in this week’s New York Business Divorce.

Continue Reading Statute Constrains Commissions for Court-Appointed Receivers in Corporate Dissolution Proceedings

Courts generally will enforce broad arbitration clauses in shareholders’ agreements to compel arbitration of corporate dissolution disputes. This week’s New York Business Divorce highlights an interesting, recent decision by Justice Ira B. Warshawsky in which he denied a request to compel arbitration of a dissolution petition based on limiting language in a separate termination clause in the shareholders’ agreement.

Continue Reading Court Denies Arbitration of Corporate Dissolution Petition Notwithstanding Broad Clause