Category: Appraisal/Valuation

Valuations should carefully consider application of the income and market approach

In a recent bankruptcy case, a plaintiff valuation expert provided, without proper justification, 70% reliance on what the Court described as a biased application of the discounted cash flow (DCF) approach to value (an income approach)  to determine her appraisal conclusions. The discounted cash flow analysis is a commonly-used, and conceptually excellent method of performing …

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Permanent link to this article: https://betweenthenumbers.net/2013/04/valuations-of-larger-companies-must-carefully-consider-the-market-approach/

Private Annuity Transaction Upheld As an Estate Planning Tool

In the Estate of Virginia Kite vs. IRS, T.C. Memo 2013-43 (February 7, 2013), affluent taxpayers were given support for a potentially substantial estate planning tool. This is a significant decision. The Tax Court described the underlying facts as follows: “Under the terms of the annuity transaction, the Kite children would begin payments to Mrs. …

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Permanent link to this article: https://betweenthenumbers.net/2013/02/private-annuity-transaction-upheld-as-an-estate-planning-tool/

California Appellate Court criticizes expert witness exclusion in eminent domain case

Valuation in an eminent domain case is necessarily accomplished through experts. In County Of Glenn vs. Patrick Foley (California Third Appellate District, case no. C068750, November 26, 2012), the Trial Court was reversed with directions. The trial court had excluded the property owner’s valuation expert, thus effectively eviscerating the property owner’s case. The subject property …

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Permanent link to this article: https://betweenthenumbers.net/2012/12/california-appellate-court-criticizes-expert-witness-exclusion-in-eminent-domain-case/

HP to take legal action over its bold multi-billion dollar fraud allegation

In connection with its quarterly earnings release and a related $8.8 billion write-down, Hewlett-Packard claimed that it was misled by hidden “serious accounting improprieties” involving its $11.1 billion purchase of formerly-public company Autonomy. The Autonomy acquisition closed October 2011, under the watch of former HP CEO Leo Apotheker. Apotheker’s reign was short-lived (11 months), and …

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Permanent link to this article: https://betweenthenumbers.net/2012/11/hp-to-take-legal-action-over-its-bold-multi-billion-dollar-fraud-allegation/

Business Interruption Insurance Reminders for Hurricane Sandy

Any insurance claim must start with a specific review of your policy. Nevertheless, the following items may be of particular interest in business interruption claims associated with Hurricane Sandy:           Check your policy for whether you have coverage for storm-related flooding. Many policies contain an exclusion for floods, unless you purchased …

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Permanent link to this article: https://betweenthenumbers.net/2012/11/business-interruption-insurance-reminders-for-hurricane-sandy/

Investing in College: A Lesson in Evaluating Investment Returns

The common practice of investing in a university education to receive lifelong returns of larger salaries deserves additional scrutiny in the current environment of rising tuition, ballooning student-debt, and high unemployment among college grads. Smart Money attempted to provide guidance, but botched the return on investment calculation. The publication recently scored the country’s 50 most expensive universities …

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Permanent link to this article: https://betweenthenumbers.net/2012/10/investing-in-college-a-lesson-in-evaluating-investment-returns/

Entire fairness standard in fairness opinions requires that the transaction be … well, fair.

In October 2011, Chancellor Strine of the Delaware Chancery Court awarded more than $1.2 billion in damages to publicly-traded Southern Peru Copper Corp. (“SPCC”) against its controlling parent, Grupo Mexico . The derivative lawsuit claimed that SPCC overpaid for Minera Mexico, a Mexican mining company that its parent wanted SPCC to purchase from the controlling …

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Permanent link to this article: https://betweenthenumbers.net/2012/09/entire-fairness-standard-in-fairness-opinions-requires-that-the-transaction-be-well-fair/

Olympic Games Still a Loss Leader

Historically, the right to broadcast the Olympic Games has not been a stand alone money maker for the network that acquired it.  When NBC announced that the Olympic Games would be at “about breakeven”, some thought this trend had been broken.  It hasn’t.  Reportedly NBC paid about $1.2 billion for the U.S. rights to broadcast …

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Permanent link to this article: https://betweenthenumbers.net/2012/08/olympic-games-still-a-loss-leader/

Attempted Biopharmaceutical Takeover Turns Toxic

Human Genome Sciences, Inc. (“HSG”), a biopharmaceutical company targeted for acquisition by GlaxoSmithKline (“GSK”), has adopted a defensive position commonly known as a “poison pill”.  HSG is apparently unimpressed with GSK’s $13 cash per share ($2.6 billion) offer and has approved a Shareholder’s Rights Plan whose intention is to make the takeover uneconomical for GSK. …

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Permanent link to this article: https://betweenthenumbers.net/2012/05/attempted-biopharmaceutical-takeover-turns-toxic/

AOL Surprise Sale Shows the Value of Mapping Technology

AOL recently announced the sale of over 800 patents and patent applications to Microsoft, and a non-exclusive license covering the rest of its retained patent portfolio. The sale price is $1.056 billion in cash. The sale includes the stock of an AOL subsidiary, which allows AOL to offset the patent sales against a loss involving …

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Permanent link to this article: https://betweenthenumbers.net/2012/04/aol-surprise-sale-shows-the-value-of-mapping-technology/