Valuation

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Stock valuation junkies, this week’s New York Business Divorce is for you, as we examine a recent Fourth Department decision that weighs in on the controversial issue whether the discount for lack of marketability applies only to the company’s good will or to the entire enterprise value.
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Continue Reading Appellate Ruling in Stock Valuation Case Further Muddies the Marketability Discount Waters

Corporate bylaw provisions governing the number of directors and procedures for their appointment can sometimes play a critical role in the outcome of disputes among shareholders of closely held corporations, as illustrated in a recent case highlighted in this week’s New York Business Divorce involving a small residential co-op.
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Continue Reading Pay Attention to the Latent Power of Corporate Bylaws

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.
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Continue Reading What’s the Difference Between Marketability and Minority Discounts?

Suffolk County Commercial Division Justice Elizabeth Hazlitt Emerson recently decided a fair value appraisal in a stock buyout proceeding under BCL 1118, in which she rejected the two experts’ widely divergent conclusions of value in favor of her own computation based on the income approach. Read all about it in this week’s New York Business Divorce.
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Continue Reading Court Rejects Experts’ Appraisals in Fair Value Proceeding, Relies on Own Computation Using Income Approach

A recent appellate decision, ordering a new stock valuation hearing in a case marked by incomplete expert testimony and inadequate findings by the judicial hearing officer who heard the valuation evidence, prompts thoughts on the use of hired-gun experts in this week’s New York Business Divorce.
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Continue Reading Stock Valuation, Dr. Pangloss, Mr. Scrooge and Do-Overs

DUE TO TECHNICAL GLITCH, THIS ENTRY WAS PUBLISHED THIS MORNING INCOMPLETE. THIS WILL LINK TO THE COMPLETE ENTRY. MY APOLOGY FOR THE DUPLICATE EMAIL NOTIFICATION. P.A.M.
The statute governing buyouts in oppressed shareholder dissolution cases dictates that the fair value of the shares is to be determined as of the day before the date on which the dissolution petition was filed. This week’s New York Business Divorce looks at a quirky case involving a fight over which of two proposed valuation dates was the proper one, with $1,000,000 in assets hanging in the balance.
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Continue Reading Court Rejects Attempt to Vary Statutory Valuation Date in Oppressed Shareholder Buyout

“Eat and drink with your relatives; do business with strangers.” This Greek proverb gets sorely tested by the case featured in this week’s New York Business Divorce, involving a Greek restaurant business in which one of the shareholders died after filing for dissolution and the other then sought to enforce a buyback provision in the shareholders’ agreement.
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Continue Reading Court Enforces Stock Buyout Triggered by Shareholder’s Death Notwithstanding Pending Dissolution Proceeding

New York courts generally will apply a discount for lack of marketability in valuing the shares of closely held corporations in buyout proceedings triggered by judicial dissolution. Whether the discount applies only to goodwill, or to the entire enterprise value, may depend on which court you’re in. Find out more in this week’s New York Business Divorce.
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Continue Reading Courts Differ on Application of Marketability Discount in Stock Valuation Proceedings

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