A sampling of new digests added to the BVLaw case law digest recently
Here are some of the cases where business valuation was central to the decisions of the courts. BVR’s exclusive digests, plus the related court documents, are all available at BVLaw.
Farmer v. Farmer, 2011 WL 3929114 (Wash.)(Sept. 8, 2011)
Washington State Supreme Court rejects absolute rule for valuing converted employment stock options in divorce, deferring to trial courts’ broad authority to assess expert valuation of the options, including its reference to the tort framework of measuring conversion damages in some cases.
Experts: Ronald Nelson (wife); Steven Kessler (husband)
Judge: Stephens
State/Jurisdiction: Washington
Court: Supreme Court
Type of case: marital dissolution
SIC Code: 3713 Truck and Bus Bodies
Elliott v. Elliott, 2011 WL 3889181 (Mass. App. Ct.)(Sept. 6, 2011)(unpub.)
Trial court errs by valuing the husband’s minority interest in a family held limited liability corporation by reference to the underlying real property, when there was no evidence that the husband could access the property or its income.
Experts: none
Judge: Hanlon
State/Jurisdiction: Mass.
Court: Court of Appeals
Type of case: marital dissolution
SIC Code: 6733 Trusts, Except Educational, Religious, and Charitable (personal trusts, estates, and agency accounts)
Showell v. Pusey, 2011 WL 3860419 (Del. Ch.)(Sept. 1, 2011)
Delaware Chancery Court resolves ambiguities in CPA firm operating agreement to find that its provisions for liquidation value, rather than statutory fair value as a going concern, control buy-out price for retiring partner.
Experts: Jennings P. Hastings (plaintiff); Clyde G. Hartman (defendant)
Judge: Glasscock
State/Jurisdiction: Delaware
Court: Court of Chancery
Type of case: judicial dissolution
SIC Code: 8721 Accounting, Auditing, and Bookkeeping Services (auditing accountants)
Douglas Dynamics v. Buyers Products Co., 3-09-cv-00261 (W.D. Wis.)(Sept. 22, 2011)
Federal district court relies on 25% rule of thumb as starting point to calculate prospective reasonably royalty rate for patent infringement damages, despite (and without citation to) the Federal Circuit’s rejection of the rule in Uniloc v. Microsoft.
Experts: [unnamed]
Judge: Conley
State/Jurisdiction: federal/Wisconsin
Court: U.S. district court
Type of case: patent (IP)
SIC Code: 3714 Motor Vehicle Parts and Accessories
Rughani-Shah v. Noaz, 2011 WL 4104507 (N.J. Super. A.D.)(Sept. 11, 2011)
Without any evidence of shareholder oppression, court finds that buy-out price for terminated shareholder of 3-person pediatric practice is limited to book value, as defined in the buy-sell agreement.
Experts: Melvin Crystal (plaintiff); Deborah Mathis (defendants)
Judge: Rodriguez, Grall, and Miniman
State/Jurisdiction: New Jersey
Court: Court of Appeals
Type of case: judicial dissolution
SIC Code: 8011 Offices and Clinics of Doctors of Medicine (except mental health specialists, HMO medical centers, and ambulatory surgical and emergency centers)
In re Washington Mutual, Inc., 2011 WL 4090757 (Bkrtcy.D.Del.)(Sept 13, 2011)
Federal bankruptcy court criticizes debtors’ valuation of its proposed reorganization for being too low and plan objectors value for being too high, ultimately crediting the debtors’ more “complete” valuation, with adjustments.
Experts: Steven Zelin (debtors); Peter Maxwell (plan objectors)
Judge: Walrath
State/Jurisdiction: federal
Court: bankruptcy court
Type of case: bankruptcy
SIC Code: 6035 Savings Institutions, Federally Chartered
DFG Wine Co., LLC v. Eight Estates Wine Holdings, LLC, C.A. No. 6110-VCN (Del. Ch.) (August 31, 2011)
Delaware Chancery outlines the scope of documents that are required to be produced for those seeking to value a closely-held company, including its wholly-owned subsidiary that lacks, in reality, a “separate existence.”
Experts: None
Judge: Noble
State/Jurisdiction: Delaware
Court: Court of Chancery
Type of case: miscellaneous
SIC Code: 6719 Offices of Holding Companies, NEC
Oracle USA, Inc. v. SAP AG, 2011 WL 3862074 (N.D. Cal.)(Sept. 1, 2011)
Federal district court reverses record-setting $1.3 billion in copyright damages based on the lack of proof of any comparable, real world licenses, permitting the plaintiff to opt for a remitter of $272 million based on the defendant’s profits from a specific, infringing application.
Experts: Paul Meyer (plaintiff); Richard Clarke (defendant)
Judge: Hamilton
State/Jurisdiction: federal/Calif.
Court: U.S. District Court
Type of case: IP
SIC Code: 7372 Prepackaged Software (software publishing)