“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 . . .

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.
Continue Reading A Cross-Country Road Trip of Elections to Purchase in Dissolution Proceedings

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

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.
Continue Reading Disputes Abound When Law Firms Dissolve

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