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Key Person Discount Takes Center Stage in Stock Valuation Proceeding
Owners of small, closely held companies usually play key roles in the sales, operations, administration and finance of the business. When the controlling shareholders terminate the employment of a...
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Chris Mercer Tackles Statutory Fair Value
By statute in New York and many other states, including Delaware, the standard of value used in dissenting shareholder appraisals and buy-outs in corporate dissolution proceedings brought by minority...
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Court Rejects Marketability Discount, Applies “Murphy Discount” for Built-In...
An epic corporate governance and stock valuation battle between rival siblings, fighting over a Manhattan real estate portfolio worth upwards of $100 million, generated an important ruling last week by...
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The Marketability Discount in Fair Value Proceedings: An Emperor Without...
The discount for lack of marketability, or DLOM, has reigned supreme in New York fair value proceedings since 1985 when the Appellate Division, Second Department, decided Matter of Blake, 107 AD2d 139....
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Court Endorses Discounted Cash Flow Method, Rejects Post-Merger Tax Benefits,...
A Manhattan judge last month awarded a dissenting shareholder over $2 million plus another $1 million for attorneys’ fees and expenses in a battle of the experts featuring disputes over valuation...
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An Ill-Fated Solution to an Ill-Fated Buy-Sell Agreement
Let’s face it: If you have a close corporation shareholders’ agreement or LLC operating agreement including a buy-sell provision with a fixed share price that’s supposed to be updated periodically,...
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Forensic Accounting Helps Wins the Day in Oppressed Shareholder Stock...
A company’s financial statements constitute the core data used by business appraisers to value shareholder equity in statutory appraisal proceedings triggered by dissolution petitions brought by...
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Court Compels Buyout Despite Consent to Dissolution
Shareholder A and Shareholder B are the sole shareholders of On The Rocks Corp. After a period of growing hostilities, Shareholder A petitions for judicial dissolution of On The Rocks Corp. under...
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Court Rejects Marketability Discount in LLC Fair Value Case
This is the second installment of a two-part examination of a recent post-trial decision by Queens County Supreme Court Justice Allan B. Weiss in Chiu v. Chiu, a decade-long fight between two brothers...
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Appellate Court Directs 16% Marketability Discount in Fair Value Buy-Out of...
In the last several years we’ve seen a number of New York cases valuing minority interests in real estate holding companies in which the courts rejected a discount for lack of marketability (“DLOM”) on...
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How Much is That Pastrami in the Window? Court Determines Fair Value of...
Zan’s Kosher Deli has been serving up pastrami, corned beef and other traditional kosher deli fare at its Lake Grove, New York restaurant for over 20 years. The death last year of one of Zan’s two...
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Hot Topics in Business Divorce
What are the current, hot topics in the law of business divorce? I’ve been thinking about this in preparation for a speaking engagement later this month, and thought I’d preview my choices for the...
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Zelouf (Part One): Marketability Discount Rejected in Fair Value Proceeding
A year ago I wrote about a novel ruling by Manhattan Commercial Division Justice Shirley Werner Kornreich permitting the majority owners of a family-owned textile business to proceed with a freeze-out...
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Zelouf (Part Two): Fair Value Ruling Addresses Range of Issues
Last week’s post gave the factual and procedural background of the Zelouf case, summarized Justice Kornreich’s decision awarding the 25% dissenting minority shareholder $2.2 million for the fair value...
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Court Rejects Potential Acquirers’ Expressions of Interest, Relies Solely on...
The first and last time I wrote about the AriZona Iced Tea dissolution case — likely the biggest ever of its kind in New York — was four years ago, when 50% owner and co-founder John Ferolito filed his...
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Restaurant’s Cash-Skimming Majority Owners Forced to Buy Out Minority...
The under-reporting of cash receipts a/k/a skimming by restaurant owners and other cash-intensive businesses costs many billions of dollars in lost tax revenues each year and, when detected by audit,...
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Top Ten Business Divorce Cases of 2014
I’m pleased to present my seventh annual list of the past year’s ten most significant business divorce cases. This year’s crop includes noteworthy rulings on a variety of issues in dissolution,...
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Court’s Rejection of Marketability Discount in Zelouf Case Guided by...
The question is, will the Zelouf case prove to be an outlier or the beginning of a sea change in the way New York courts view the marketability discount in fair value proceedings? Last October I wrote...
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Appellate Court Upholds 0% Marketability Discount in LLC Fair Value Case
When it comes to fair-value jurisprudence, the Brooklyn-based Appellate Division, Second Department, works in mysterious ways. Take, for instance, its 2010 Murphy decision, in which it noted without...
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Should Business Appraisers Rely on Case Precedent for Discounts?
I recently had a fair value appraisal hearing at which the opposing business valuation expert’s report and testimony in support of his proposed percentage discount for lack of marketability (DLOM)...
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