Business Valuation

Cash is the Oxygen of the Business – Reasons a Profitable Business Can Fail

By | 2018-04-25T09:31:12+00:00 March 22nd, 2018|Budget, Business Valuation, Saving|

On a hot summer day when I was a child, I opened a lemonade stand in front of my parent’s house. Before I knew it, I had sold my entire inventory of lemonade. My sales mixture consisted of a small portion of cash paying customers driving by, however, a large portion was “credit” sales to [...]

Standard of Value in Divorce Proceedings – Getting it Wrong Could be Costly!

By | 2018-04-25T10:42:44+00:00 March 8th, 2018|Business Valuation, Value|

Do you recall a time when you were traveling between different states and noticed the interstate speed limits were different, sometimes 65 MPH and other times 70 MPH depending on what state you were in? It is safe to say that different states (jurisdictions) have different laws regarding the speed limits. It is the responsibility [...]

3 Common Triggers for a Business Valuation

By | 2018-02-13T15:16:06+00:00 February 9th, 2018|Business Valuation, Estate Planning, Gifts, Mergers, Sell, Shareholder|

Remember when you wanted to know the value of that sports trading card or a rare stuffed animal? In the 1990’s, if your friend or colleague told you the Michael Jordan autographed rookie card was worth $2, would you believe them? The reasonable answer is “No,” right? To determine a reliable estimate of value for [...]

What Determines Fair Market Value?

By | 2017-10-13T11:43:25+00:00 October 5th, 2017|Business Valuation, Succession Planning|

A recent Minnesota case illustrates how multiple sides in a lawsuit can come to widely varying estimates of the value of a business.  In Lund v. Lund, 27-CV-14-20058, Hennepin County, Minnesota, the plaintiff had tried for nearly twenty years to obtain a buyout order for her 25% interest in the Lund businesses.  Lund included a [...]

The Case of the Ambiguous Expert

By | 2017-10-13T11:43:05+00:00 September 7th, 2017|Business Valuation, Shareholder|

In a recent case, a Wisconsin family owned business wanted to exercise its option to buy back the shares held by the son of the majority owner, his father. A poorly written business valuation report combined with an ambiguously written shareholder agreement resulted in lengthy and contentious litigation between the son and the company over [...]

Appeals Court Orders Tax Court to Revalue a Business, Saving the Taxpayer Millions

By | 2017-10-13T11:42:08+00:00 August 10th, 2017|Business Valuation, IRS|

The key to this case is the premise of value concept.  Premise of value poses the question, “Is the business an ongoing business or is it one in which the business will go into dissolution?” The Tax Court’s valuation failed to adequately consider the premise of value, resulting in an appeals decision in favor of [...]

What Happens to a Trust in a Divorce

By | 2017-04-26T13:58:52+00:00 January 1st, 2017|Business Valuation|

What happens to a trust during a divorce? The answer is, “It depends.” Denny Taylor, MBA CPA ABV CFF, a forensic and valuation principal with TD&T CPAs and Advisors, P.C. addresses this situation. “Suppose a husband and wife are getting divorced and the wife is a beneficiary of a trust. A court will rule [...]

U.S. Court of Appeals for the 8th District Confirms that Damages Can be Assessed in Employment Contracts

By | 2017-04-25T13:52:59+00:00 January 1st, 2017|Business Valuation|

In a case summary published in April 2016, the U.S. Court of Appeals affirmed the judgment of a district court, awarding damages for lost profits in an employment contract dispute. The case brought by St. Jude Medical S.C., Inc. against Biosense Webster, Inc. hinged on the contractual agreement between an employee and St. Jude. [...]

Failing to Assign Value to Practice Goodwill Can Nullify Noncompete Clauses

By | 2017-04-25T13:47:23+00:00 January 1st, 2017|Business Valuation|

A case published in January 2016 emphasized the importance of establishing a value for practice goodwill. In California, a solo practitioner wanted to sell her medical practice to Monarch Healthcare, a large provider in the same market. Many similar sales of medical practices have happened in recent years. Monarch offered the doctor $1.7 million [...]

Case #3: A Holding Company Within an Estate Has an Undervaluation Penalty Upheld as the Court Holds for the IRS

By | 2017-04-25T13:47:30+00:00 January 1st, 2017|Business Valuation|

Estate of Richmond, T.C. Memo 2014-26 This case deals with the estate of a woman who owned a 23.44% interest in a family-owned holding company, a Subchapter “C” corporation. Most of the company’s $52.16 million in assets consisted of publicly traded securities. Because the company had held the assets for a long period of [...]