“Under any standard of value, the true economic value of a business enterprise will equal the company’s accounting book value only by coincidence . . .” says the late business valuation expert and author Shannon Pratt. So why do so many shareholder buy-sell agreements require that the shares be purchased for book value? This week’s post explores.
Continue Reading And the Award for Most Creative Attempt to Evade a Book Value Buy-Sell Provision Goes To . . .
Valuation
Clash of Valuation Visions: Appraisal Proceeding Over Manhattan Eyeglass Shop Goes the Distance
Spectacle of Appraisal: This week’s post highlights a Manhattan Eyeglass Store’s valuation quandary and the appraisal lessons we can learn from it.
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Fair Value Awards: A Matter of Interest
This week’s New York Business Divorce looks at an oft neglected issue with potentially large financial consequences in statutory fair value appraisal proceedings: interest on the fair value award.
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A Cross-Country Road Trip of Elections to Purchase in Dissolution Proceedings
When a shareholder petitions for dissolution, many states have statutes allowing the corporation to respond by buying out the complaining shareholder. This week’s post takes a look at several recent decisions concerning buyout elections across the country.
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The Worst of Both Worlds: Untimely Buyout Election Yields Full Merits Hearing and Huge Bond
In this week’s New York Business Divorce, read about a rare decision considering whether to grant an untimely BCL 1118 buyout election and the unsavory consequence of the respondent’s delay: imposition of a million dollar bond.
Continue Reading The Worst of Both Worlds: Untimely Buyout Election Yields Full Merits Hearing and Huge Bond
Challenges to Expert Appraisers in Valuation Proceedings
In business divorce litigation, the expert appraisers often are the key witnesses. A recent PwC Study analyzing the success of challenges to expert appraisers inspires a deeper dive into some keystone cases where courts excluded the expert testimony of an appraiser. …
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Disputes Abound When Law Firms Dissolve
How does one value a law firm’s caseload at dissolution? The litigation over the dissolution of Brown Chiari LLP has already made its mark on business divorce jurisprudence. As it approaches its sixth birthday, the case continues to deliver, with Erie County Commercial Division Justice Timothy J. Walker recently authoring two notable decisions concerning a partner’s interest in the firm’s substantial caseload at the time of its dissolution.
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Recent Stock Valuation Decisions Reign “Supreme”
This week’s New York Business Divorce treats valuation aficionados to summaries of four recent stock appraisal decisions that made it to the Supreme Court of four different states. …
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Valuation Decision Finds LLC “Worthless, Worthless, Worthless”
In this week’s New York Business Divorce, read about an unusual business valuation decision in a breach of contract case rendered by a court solely on papers pitting an expert against layperson, with the layperson successfully persuading the Court the entity had no value.
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Fueling the DLOM Debate: Control Transfer Restrictions and the Discount for Lack of Marketability
When valuing an owner’s interest in a closely-held company, the calculation and applicability of a discount for lack of marketability is among the most fertile grounds for sharp disagreement. One open question: should the DLOM account for any contractual restrictions on a controlling owner’s ability to transfer his or her control? …
Continue Reading Fueling the DLOM Debate: Control Transfer Restrictions and the Discount for Lack of Marketability