Should courts apply a marketability discount in determining the fair value of interests in realty holding companies? In downstate New York, the answer may vary depending on whether the court lies within the First or Second Departments of the Appellate Division. This week’s New York Business Divorce has the story.
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A minority partner paid a heavy price for wrongfully dissolving the partnership in an appellate ruling last week applying a 66% minority discount — along with marketability and goodwill discounts and offsets for damages — to the value of the partner’s interest. It’s in this week’s New York Business Divorce.
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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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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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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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This week’s New York Business Divorce examines a noteworthy decision by Manhattan Supreme Court Justice Marylin Diamond in Cole v. Macklowe, where she precluded the defendant’s valuation expert from testifying on the applicability of minority and marketability discounts in valuing the plaintiff’s equity interests in a series of single-asset real estate holding companies.

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