Business Valuation

The Superior Court’s memorandum opinion in Edkin v. Edkin, No. 2017 MDA 2013 (December 23, 2013) arose from a case involving a veterinary practice in the context of divorce.  The wife in Edkin filed a divorce action in 2001. Equitable distribution hearings were held in 2002, 2003, 2004, 2007 and 2009, resulting in a master’s […]

In-kind Distribution of Stock Disfavored by Divorce Court

September 8, 2013 Business Valuation

A decision announced recently by the Supreme Court of Rhode Island, McCulloch v. McCulloch, 69 A.3d 810, illustrates why buyouts are generally favored over in-kind distributions of stock when dividing the value of family businesses in equitable distribution proceedings. The trial court in McCulloch, faced with uncertain valuations of the businesses from both sides and […]

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Rental Real Estate Valuation in Divorce

February 10, 2012 Business Valuation

Valuation of commercial real estate and rental properties is an issue that arises in high-asset divorce proceedings. Real estate appraisal is sometimes performed within a business valuation, if the business owns real estate. In 2011, the U.S. Tax Court issued an opinion addressing real estate valuation in a case where competing experts offered two different […]

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Gallagher: Tax Court Reviews Business Valuation Principles

January 23, 2012 Business Valuation

The opinions of the U.S. Tax Court in estate valuation cases can be instructive guidance on legal and valuation principles that are equally relevant to divorce cases. A recent decision of the Tax Court in an estate taxation case contains an excellent summary of those principles, as well as the latest thinking on a variety […]

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Double Dip and Goodwill Considered by Wisconsin Supreme Court

August 15, 2011 Alimony

Last month the Wisconsin Supreme Court weighed in on two issues that are important to family lawyers and their clients who operate professional practices like physicians, lawyers, dentists and accountants. In Marriage of McReath, the Wisconsin Supreme Court ruled that “saleable” goodwill would be considered marital property, in a case where a dentist argued that […]

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5 Settlement Documents that Divorcing Business Owners Must Have

June 8, 2011 Business Valuation

When business owners get divorced, their settlement may have profound consequences for the business and other owners. Often, one spouse “sells” or gives up a share of the business to the other spouse. Since most small business owners do not have enough cash to pay a lump sum for that share, they might have to […]

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Iowa Rejects Rule of Thumb Business Valuation in Divorce

February 11, 2011 Business Valuation

A recent decision of the Iowa Court of Appeals illustrates the perils of reliance upon industry rules of thumb to value a business in matrimonial litigation. In Marriage of Hagar (11/24/2010), husband and wife purchased a dry cleaning business from a trust established by husband’s parents as part of a business succession plan. Husband and […]

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Entrepreneurs at Greater Risk of Divorce?

January 3, 2011 Business Valuation

The holidays have given me some time to catch up on my overdue reading list. One article I recently caught was Inc. Magazine’s November 2010 article on entrepreneurs who divorce. Business owners may be at greater risk of divorce, the article suggests, because of the time and emotional investment that a fledgling business requires, the […]

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What’s the Hullabaloo about Balicki?

December 12, 2010 Alimony

In Balicki v. Balicki, 2010 Pa.Super.134 (2010), the Superior Court affirmed the trial court’s decision to discount the value of an insurance business, based on the hypothetical income taxes that would be incurred by its owner upon sale of the business. The trial court’s decision was itself a reversal of the master’s report, in which […]

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Judges are Deciders, not Investigators, in Divorce Litigation

September 16, 2010 Business Valuation

A recent post on BVLaw (culled from the materials for the BVR Summit on Business Valuation in Divorce, going on now in Chicago) reminds us that pre-trial discovery and preparation are essential tasks in divorce litigation which must be conducted by the parties, with the assistances of their lawyers and experts, not the court: Speaking […]

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