Valuation Discounts

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In the second of two posts on the recent post-trial decision in Chiu v. Chiu, involving the disputed ownership of a single-asset real estate holding company, this week’s New York Business Divorce focuses on the court’s rejection of a discount for lack of marketability in determining the fair value of the withdrawing member’s 10% interest.
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Continue Reading Court Rejects Marketability Discount in LLC Fair Value Case

In an unusual corporate dissolution case involving 50/50 shareholders decided last month by Justice Emily Pines, the court compelled a buyout of the petitioner’s shares by the other shareholder notwithstanding the latter’s consent to dissolution. Get the full story in this week’s New York Business Divorce.
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Continue Reading Court Compels Buyout Despite Consent to Dissolution

A recent decision by Queens County Commercial Division Justice Orin Kitzes in Matter of Adelstein illustrates the crucial role of forensic accounting in testing and adjusting a company’s financial statements for purposes of stock valuation in an oppressed minority shareholder case. Read more in this week’s New York Business Divorce.
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Continue Reading Forensic Accounting Helps Wins the Day in Oppressed Shareholder Stock Valuation Proceeding

An appellate ruling last month in DeMatteo v. DeMatteo Salvage Co. brings to a close the cautionary tale of an 8-year court battle among members of a family-owned business over the enforcement of a poorly designed buy-sell agreement. It’s in this week’s New York Business Divorce.
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Continue Reading An Ill-Fated Solution to an Ill-Fated Buy-Sell Agreement

Stock valuation aficionados will not want to miss the report in this week’s New York Business Divorce on the recent decision in Matter of Harlem River Yard Ventures, Inc. It’s a dissenting shareholder case triggered by a squeeze-out merger in which the court was faced with widely disparate expert valuations of a company holding a 99-year lease on the Bronx site of the former Penn Central rail yards, now serving as an industrial park.
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Continue Reading Court Endorses Discounted Cash Flow Method, Rejects Post-Merger Tax Benefits, in Determining Fair Value Award to Dissenting Shareholder

The discount for lack of marketability is a fixture in New York fair value jurisprudence as a result of almost 30 years of case law starting with Matter of Blake. Some prominent voices in the business valuation field are challenging the doctrine as wrong in theory and bereft of empirical support. Learn more in this week’s New York Business Divorce.
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Continue Reading The Marketability Discount in Fair Value Proceedings: An Emperor Without Clothes?

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

Chris Mercer, one of the country’s leading authorities on business valuation, has written a series of important and helpful articles on the statutory fair value standard used by courts in dissenting shareholder appraisals and oppressed minority shareholder buy-out proceedings. Get a taste in this week’s New York Business Divorce.
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Continue Reading Chris Mercer Tackles Statutory Fair Value

The key-person discount makes a rare but ultimately unsuccessful appearance in a fair value buyout proceeding triggered by a corporate dissolution petition filed by minority shareholders of an office copier sales and leasing company. The valuation report by Referee Louis Crespo, and the decision confirming it by Manhattan Commercial Division Justice Barbara R. Kapnick, are featured in this week’s New York Business Divorce.
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Continue Reading Key Person Discount Takes Center Stage in Stock Valuation Proceeding