Business Valuation Resources: Case Studies

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  • “The Case of the Dueling Appraisers”
    We have been involved in dozens of disputes in which each side retained a business appraiser and the two resulting opinions differed sufficiently that no negotiated settlement was immediately feasible. Some of these cases involved actual litigation, some involved arbitration or mediation, and others were handled outside of these processes.
    Download the full case study (78kb PDF)
  • “The Case of the Properly Planned Family Limited Partnership”
    Problem: How to Structure and Value Family Limited Partnerships
    A significant part of our practice addresses the value of minority limited partnership interests. Properly planned with an appropriate business purpose and by skilled legal counsel, a family limited partnership can provide a vehicle for family asset management and estate tax minimization. In two recent cases, we valued non-marketable limited partnership or limited liability corporation interests with specific reference to the actual facts and circumstances of the partnership and operating agreements.
    Download the full case study (86kb PDF)
  • “The Case of the Provisional Director”
    Problem: Need for Provisional Director in Shareholder Dispute Situations
    In many cases, deadlocked and disputing equal shareholders turn to the courts for dispute resolution and assistance. In three different cases (2001-2003), we have been appointed and approved by the court and shareholders to serve as a Provisional Director pursuant to California Corporations Code (CCC) Section 2000. In fact, it has been our experience to date that this process is “better” than a 3rd-party receivership or the stalemate that has resulted from the shareholder dispute / differences in opinion.
    Download the full case study (76kb PDF)
  • “The Case of a Qualified Second Opinion”
    Problem: Review of Non-Conforming Appraisal Reports
    We were recently contacted by counsel and the local Superior Court in two different cases to review the report and valuation calculations of another appraiser. Regretfully, in both instances neither appraisal report conformed to the Uniform Standards of Professional Appraisal Practice (USPAP) and were not prepared by certified or credentialed appraisers.
    Download the full case study (76kb PDF)
  • “The Case of the Right Deduction”
    Client’s Situation: About five days before the deadline to file his annual tax return, a client and his accountant called us to assist in what they thought would be an easy problem to solve. After all, in November, 1997, the client (the sole owner of all 600 outstanding common shares of the subject company) had entered first into a Letter of Intent, then Definitive Agreements to sell his company for $95.0 million. The transaction was to close March 1, 1998.
    Download the full case study (81kb PDF)
  • “The Case of Transaction Advisory Services”
    Professional standards present a clear distinction in our work and the expression of our estimates of value as (1) calculations, (2) within a scope-restricted report, (3) within a full self-contained report and (4) in a review report. In many cases, potential clients come to us asking us to appraise their business. In fact, what they really want is a set of calculations (usually presented within a range) and someone to represent them in negotiations with the buyer. This is the “classic” determination of the difference between fair market value (hypothetical buyer / hypothetical seller) and investment value (actual buyer / actual seller). Of course, synergies and strategic value are considered by the investment value standard.
    Download the full case study (81kb PDF)
  • “The Case of the Well Reasoned and Documented Opinion”
    The Value of Independent, Non-Advocacy Testimony
    In a recent case, we were deposed presenting what opposing counsel later termed “a well-reasoned report” that assisted the litigating parties and counsel to reach a pre-trial settlement. In the instant case, we estimated a range of damages to a plaintiff resulting from a contract dispute with the other shareholder. We used extensive Internet and library research to independently support our reasonable assumptions. In a second case, we participated in a twelve-hour mediation session providing technical input to both parties and tax-advantaged structuring to “close the gap” and significantly assist in the final settlement terms. While not unique, we felt that the unbiased professional opinion expressed as a non-advocate can be extremely valuable to the parties and court when assessing the range of possibilities that can result at trial.
    Download the full case study (60kb PDF)
  • “The Case of the Wrong Appraisal Assignment”
    Problem: Determining the Equity Interest in a “C” Corporation
    Two equal shareholders had been directed by the court to value their equity interest in a regular “C” corporation. The subject corporation was a General Partner in a venture (partnership) to build a series of tract homes. Excellent detailed records of costs incurred and projected future costs were available. The only real variable was the anticipated selling price of each unit and the “absorption rate” (the number of units sold each month). The opposing appraisal expert valued the project itself (really an asset of the partnership, not the corporation). No reference to the standard of value was given.
    Download the full case study (79kb PDF)
  • “The Case of the Unnecessary Appraisal”
    An investment banker wanted to retain us to appraise a private company whose owner wished to transfer a minority interest to a trust. This would have been a routine engagement (value the company and determine appropriate minority interest discounts for lack of control and marketability) except for one thing: The investment bank was in the middle of selling the company!
    Download the full case study (54kb PDF)
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