Tax Court Tacitly Approves of IRS Solvency Assessment

by Royer Advisors | Dec 11, 2024 | Court Rulings, IRS Regulation, Tax Preparation, Valuations

Kardash v. Commissioner, 2015 Tax Ct. Memo LEXIS 69 (March 18, 2015) A Tax Court memo resulting from a transferee liability case includes an informative discussion of the valuation methodologies the parties’ solvency experts used to determine the company’s fair market...

Chancery Savages Accounting Firm Over Manipulated Valuation

by Royer Advisors | Dec 11, 2024 | Court Rulings, IRS Regulation, Valuations

Fox v. CDx Holdings, 2015 Del. Ch. LEXIS 194 (July 28, 2015) The Delaware Court of Chancery has on numerous occasions called out major financial institutions for providing erroneous or even “motivated” valuations. But few opinions include more searing criticism than a...

A Closer Look at the Excess Earnings Method

by Royer Advisors | Dec 11, 2024 | Court Rulings, Divorce Litigation, Valuations

Valuation experts often criticize the Excess Earnings Method, calling it ambiguous, over-simplified or outdated. But it’s still used in some jurisdictions as a way to value small businesses and professional practices, especially in a divorce setting. The method...

Expert Rebuttal Fails to Engage With Initial Valuation

by Royer Advisors | Dec 11, 2024 | Court Rulings, Valuations

Clear-View Techs., Inc. v. Rasnick, 2015 U.S. Dist. LEXIS 72601 (June 3, 2015); Clear-View Techs., Inc. v. Rasnick, 2015 U.S. Dist. LEXIS 71990 (June 2, 2015)  In an intellectual property case, the court determined what qualifies as admissible rebuttal testimony under...

No Place for Asset Appraisal in Trust Dispute, Court Says

by Royer Advisors | Dec 11, 2024 | Court Rulings, Valuations

Cartwright v. Jackson Capital Partners, Limited Partnership, 2015 Tenn. App. LEXIS 361 (May 21, 2015) Did the appraiser use the wrong method for the case? This question took center stage in a lawsuit featuring the beneficiary of a grantor trust who claimed the trustee...

Timing is Everything: How to Handle Subsequent Events in Valuation

by Royer Advisors | Dec 11, 2024 | Court Rulings, IRS Regulation, Tax Planning, Valuations

Business valuations are prepared as of a specific date, similar to balance sheets. Sometimes a valuation’s effective date is in the past, and events have occurred after the valuation date that would have impacted the company’s value if investors knew (or...