Hello
Welcome to the fifteenth issue of Valuation and Litigation Insights! We bring you hand-picked content related to business valuation and litigation intended to help you and your clients get better results.
Thanksgiving is right around the corner. This has to be one of my favorite holidays. You get to enjoy the company of friends and family, enjoy lots of great food, and relax – all without the stress of shopping crowds, finding last-minute gifts, and later dealing with returns and exchanges. But hey, that’s for next month.
Looking forward to the big day? Here’s a few quotes to get you in the mood courtesy of Reader’s Digest:
- “Thanksgiving is an emotional time. People travel thousands of miles to be with people they see only once a year. And then discover once a year is way too often.” -- Johnny Carson
- “A new survey found that 80 percent of men claim they help cook Thanksgiving dinner. Which makes sense when you hear them consider saying ‘that smells good’ to be helping.” -- Jimmy Fallon
- “Thanksgiving is a magical time of year when families across the country join together to raise America’s obesity statistics.” -- Stephen Colbert
- “You can tell you ate too much for Thanksgiving when you have to let your bathrobe out.” -- Jay Leno
On to this issue.
Should valuation discounts be considered when the court forces a shareholder buyout? A recent California decision may turn some heads.
There’s such a thing as being too much of a client-pleaser. We highlight a court decision where “downward bias” sunk a company’s valuation expert.
Speaking of backfiring, we share a podcast clip where an expert discusses the right and wrong ways to provide rebuttal testimony. The wrong way can boomerang and hurt the rebuttal expert.
Buy-sell agreements are intended to make shareholder transitions work more smoothly. But even so, litigation over valuation issues often seems unavoidable. This article shares why that happens and what can be done to minimize that situation.
Finally, we share an article that discusses the benefits of hiring a second valuation expert just to review the work of an opposing expert.
Hope you enjoy this issue and find it useful!
Valuation and Litigation Insights
News and Trends
Statutory Buyouts and Discounts Under the Fair Market Value Standard: An Awkward Pair?
Should a court-ordered buyout of a 50% business interest include or exclude discounts for lack of control and lack of marketability?
Does the "Fair" in "Fair Market Value" and "Fair Value" actually mean different things?
Whether you agree with the result or not, this recent decision from the California Court of Appeals illustrates the controversy, and is important reading if you deal with contested valuations and statutory buyouts.
nybusinessdivorce.com
Bias Sinks Fair Value Determination
When valuing a business for a shareholder oppression dispute, being too aggressive can backfire.
In the case below, the court totally rejected the company's appraiser due to "downward bias."
filler.com
Things to Know
Rebuttal Techniques that may Backfire
When can a business valuation expert's rebuttal backfire, causing more harm than good?
This podcast clip provides some insight from testifying experts.
Good to know when retaining your expert or facing an opposing one.
youtube.com
Why Do Buy-Sell Agreements Rarely Work as Intended?
Buy-sell agreements are supposed to reduce conflict and ease transitions, right?
Then why is it that so many valuation-related shareholder disputes involve some fight over measuring value for the buy-sell agreement?
What is going on?
This article discusses 5 reasons why the valuation process of the buy-sell can go sideways, and what to do about it.
mercercapital.com
Business Appraisal Review: A Helpful Tool in Litigation and Otherwise
There are times when it makes sense to hire a separate valuation expert just to review the work of an opposing expert.
This article describes when using a review appraiser can enhance outcomes, especially when the stakes are high.
chrismercer.net
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
William W. Thomsen
Director of Valuation and Litigation Services
Grobstein Teeple, LLP
www.gtllp.com
Call me at 818-502-4950
Valuation and Litigation Insights