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Closely Held Corporate Shares Require a Discount
In divorce, it is sometimes necessary to value shares of a closely held corporation. Of course, we all know that ascertaining the value of shares in a publicly traded company, such as Google or Coca-Cola, is a simple undertaking. MSNBC, CNN and the Internet are among the numerous sources available to investors that provide nearly real-time quotes of the latest prices for shares traded over public exchanges like the New York Stock Exchange or NASDAQ. The presence of these national exchanges enables stockholders to immediately liquidate their shares for cash in a matter of minutes through a few clicks of a mouse or a single phone call.
Not so stocks in the thousands of privately held companies throughout New York whose shares are not traded on the NYSE or NASDAQ. These companies often have only a handful of shareholders, many of whom are family members or close friends. Since shares in these companies are not routinely sold each day, there is no market to consult to determine the value of any one shareholder's interest. As a result, a unique form of litigation exists in New York whose purpose is to determine the fair value of an interest in a closely held corporation. Such proceedings are referred to as appraisal proceedings or shareholder valuation proceedings. They are necessary not only in divorce actions, but also in other cases, including dissenting shareholder cases and shareholder dissolution proceedings in which the corporation elects to avoid dissolution by purchasing the petitioning shareholder's interests. In all these cases, the valuation equation is complicated by this fact: There is likely no ready market for the shares at issue. So, should the asset's value be discounted?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.