Litigation Support Articles

Courts are divided on whether to allow discounts when valuing business interests in shareholder disputes and divorce cases. Whether discounts are equitable typically depends on state law, case facts and, ultimately, the court’s discretion.

In Kress v. United States, a federal district court accepted the practice of tax affecting the earnings of so-called “pass-through” entities. It also rejected the application of a premium to reflect the tax advantages of owning a minority interest in a pass-through business.

Delaware’s Supreme Court recently struck down a controversial statutory appraisal decision in Verition Partners Master Fund Ltd. v. Aruba Networks, Inc.

In commercial tort claims, courts must decide how much damage the plaintiff suffered from the defendant’s alleged wrongdoing. A recent Eighth U.S. Circuit Court of Appeals case upheld a jury’s damages award based on lost market value, even though the business wasn’t completely destroyed.

In federal court, the admissibility of expert testimony is governed by the strict Daubert standard. Courts in most states have also adopted the Daubert standard, but others may apply the less stringent Frye standard.