Hello
Welcome to the tenth issue of Valuation and Litigation Insights! My goal is to bring you hand-picked content related to all things valuation and litigation that will make your life easier and help your clients get the results they deserve.
We start this episode by examining California Corporations Code Section 2000, which can prevent corporate dissolution through purchase of a dissenting shareholder's ownership interest -- but not without risk.
Hindsight may be 20-20, but it can also blind someone to value in a retrospective appraisal. This article discusses the recent Michael Jackson Estate case, demonstrating how hindsight contributed to widely disparate values and the Court's rejection of the IRS' position.
We also look at valuation's "dirty little secret" -- appraisers' use of management projections with little if any independent scrutiny, what is being done about it in the valuation profession, and what you as a reviewer ought to keep in mind.
Finally, we examine some tips on maximizing the effectiveness of a valuation expert's testimony.
Hope you enjoy this issue and find it useful!
Valuation and Litigation Insights
News and Trends
Fair Value | Freeman, Freeman & Smiley LLP
Breaking up is hard to do -- especially for business partners who do not wish to destroy the business they built in the process.
California Corporations Code Section 2000 provides a way for a corporation or its non-dissenting shareholders to avoid a corporate dissolution by purchasing a dissenting shareholder’s ownership interest.
But a Section 2000 proceeding is complex and may result in unintended consequences for the inexperienced. This excellent article by Robert Heller and Todd Lander of Freeman Freeman & Smiley clearly describes this often misunderstood process, and highlights the many issues that an attorney, client, and appraiser must consider when this remedy is pursued.
ffslaw.com
Michael Jackson and 20/20 Valuation Hindsight - Davis Martindale Blog
Stated bluntly, the Michael Jackson Estate case was embarrassing for business valuators. The two sides (the estate and the IRS) came in with ridiculously different valuation conclusions.
This article discusses how hindsight played a major role in why the IRS came up with a value that was 50 times that of the estate's, and why it essentially lost its argument.
Good things to know if you are reviewing a valuation report or working with a valuation expert.
davismartindale.com
Things to Know
Seven Best Practices to Achieve a Solid Damage Expert Opinion
What can attorneys do to increase the odds that their damage expert will provide a strong opinion?
This article discusses seven best practices lawyers can implement to help achieve a positive outcome when using an expert.
moronesanalytics.com
Tools and Tips
Business Valuation’s ‘Dirty Little Secret’ | Business Valuation Resources
It is a "dirty little secret" in the valuation world that appraisers often simply accept management projections to use in their analysis with little -- or no -- scrutiny. This is no longer considered an acceptable practice.
This article outlines four main questions a valuator ought to ask when evaluating management projections -- and that an attorney or other interested report reviewer should ask as well.
bvresources.com
In Closing
That's it for now. If you found this issue of Valuation and Litigation Insights useful, please forward it to a friend or colleague.
And if you have a valuation or damages-related issue you would like to discuss, you can reach me one of the ways below.
Talk to you soon!
Will
Will Thomsen
Director of Valuation and Litigation Services
Grobstein Teeple, LLP
www.gtllp.com
Call me at 818-502-4950
Email me at wthomsen@gtllp.com
Valuation and Litigation Insights