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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?
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
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.
Second Circuit Reinforces Bankruptcy Code Settlement Payment Safe Harbor
The Second Circuit affirmed the lower courts' judgment that a "transfer made … in connection with a securities contract … by a qualifying financial institution" was entitled "to the protection of ... §546 (e)'s safe harbor ...."