The Growing Professional

Part 1

I was asked to prepare a short talk for the celebration of the 500th webinar event of Business Valuation Resources. I chose the topic, “Expectations of a Growing Professional.” This is a topic I’ve addressed before in a few outside talks and internally at Mercer Capital. In this post and two more in the near future, I’ll share the gist of my thoughts on the webinar yesterday.

Idaho Supreme Court Affirms No DLOC and No DLOM in Fair Value Proceeding

Statutory Fair Value and Business Valuation Series #9

The Idaho Supreme Court issued an opinion in Wagner v. Wagner affirming a District Court’s determination in the fair value of shares of Wanooka Farms, Inc. This determination of fair value was a matter of first impression in Idaho. The District Court determined that neither a discount for lack of control (minority discount) nor a discount for lack of marketability (marketability discount) were appropriate in the determination of fair value. The Supreme Court in Idaho affirmed this conclusion, but where does this leave the definition of fair value in Idaho?

Ownership and Management Transition Planning or Mere Hope?

Recently, an attorney and financial planner called me to talk about a client who was discussing his ownership, management succession plans, and the life insurance associated with his “planning.” During our two-hour discussion, I learned about the client’s situation and was able to offer potential modifications to his current transition plan.

In Re: Appraisal of Dell Inc.: Asset Managers at Risk?

T. Rowe Price Did Not Dissent Properly and is Paying $200 Million to Investors

In a decision issued May 11, 2016, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery ruled that the 31.1 million shares of Dell Inc. held by T. Rowe Price Associates for various investors had not been properly perfected, giving asset managers an abrupt incentive to be meticulous.

Dell “Loses” the Appraisal Battle but “Wins” Overall

Statutory Fair Value in Delaware

Dell Inc. engaged in a management buyout (“MBO”) in October 2013 that effectively took the Company private, leaving Michael Dell in control (75% of its stock) with a financial sponsor (25% of its stock).  The majority of shareholders tendered their shares, and received the offered consideration.  Certain shareholders dissented, setting in motion an appraisal proceeding in […]

Public Markets Provide the Context for Private Company Valuation

Private Companies Must Provide Their Own Valuation Scrutiny

The public stock markets are large, transparent, and liquid. Minority shares of thousands of public companies trade on a daily basis providing visible evidence of consensus pricing for each of them. At the end of the first quarter this year, the S&P 500 Index had a market capitalization of $18.8 trillion. That’s a lot of market capitalization. Shareholders of private companies do not enjoy the same level of financial transparency. In this post, we discuss the key differences between the public and private markets and the importance of regular valuations.

Unicorns, Delaware, and Private Company Financial Disclosure

When Should Companies Disclose Valuation Information to Their Owners?

The Wall Street Journal reported that under an “obscure law,” shareholders of Delaware corporations can do just that, according to Section 220 of the Delaware Code, “Inspection of Books and Records.” The WSJ article discusses a number of startups with billion dollar plus valuations (“unicorns”) who are having to open their books to small shareholders as result of their requests under Section 220.

What if every private company had to disclose its financial statements, stockholder list, and other information relevant to valuation to any of its shareholders upon their written request?

AICPA/AAML Divorce Conference 2016 in New Orleans

Buy-Sell Agreements and the Battle of New Orleans

Last week, I attended the joint AICPA/AAML and spoke on Friday. I spoke on the topic of buy-sell agreements and related the subject matter to divorce, as divorce is a frequent trigger event in buy-sell agreements. I also participated in a panel labeled the Battle of New Orleans 2016. This post recaps some speaking highlights of my time in New Orleans.