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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. …
Continue Reading A River’s Divide: Time for the Manhattan and Brooklyn Appellate Courts to Agree on Marketability Discount in Fair Value Proceedings

An important decision last week by the Appellate Division, First Department, in Giaimo v. Vitale directed the application of stock valuation discounts for lack of marketability and built-in gains taxes in a case involving closely held, subchapter C real estate holding corporations. It’s must reading for business appraisers and business divorce lawyers, in this week’s New York Business Divorce. …
Continue Reading Appellate Court Directs 16% Marketability Discount in Fair Value Buy-Out of Realty Companies, Affirms Discount for Future Built-In Gains Tax at Present Value

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

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

The right of first refusal, commonly used to restrict stock transfers in closely held corporations, continues to live up to its reputation as one of the most reliable generators of employment for litigation attorneys in Giaimo v. EGA Associates Inc., in which the Appellate Division, First Department, recently reversed a lower court’s ruling denying summary judgment in a battle for corporate control between brother and sister. It’s in this week’s New York Business Divorce.
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Continue Reading Court Invalidates Control-Shifting Stock Transfer Made in Violation of Corporation’s Right of First Refusal