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January, 2011
Contents
Conferences and Events Click here to view upcoming events.
SC&H Business Valuation & Litigation Support Leaders 
Michael J. Young, 
Nathan E. DiNatale,
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The economy has grown for five consecutive quarters, but most economists are now pointing pessimistically at the inadequate rate of GDP growth. The GDP remains below its pre-recession peak. The Institute for Supply Management's Manufacturing Index (PMI) fell at the end of the third quarter, as did The Conference Board's Consumer Confidence Index. The Mortgage Bankers Association® revised their previous forecasts downwards for housing starts, building permits, and home prices. Unemployment remains nearly unchanged from last quarter, and will likely remain unchanged until economic growth quickens its pace. Click here for the full article Tax Court Adopts Discount for Embedded Capital Gains but Declines Dollar-for-Dollar Rule Estate of Jensen v. Commissioner, 2010 WL 3199784 (U.S. Tax Ct.) A wealthy widow held the majority (82%) of a private C corporation, which owned and operated real estate and improvements. At her death, the estate's appraiser used the net asset approach to value the corporation at just over $4.2 million, minus $965,000 for built-in long-term capital gains tax (LTCG) liability, calculated on a dollar-for-dollar basis. After applying a 5% marketability discount, the appraiser valued the decedent's share at $2.55 million. Click here for the full article Valuing Damages for Breach of Oral Contract Poses Unique Problems Kia v. Imaging Sciences Internat'l, 2010 WL 3516850 (E.D. Pa.) A startup biotech company wanted to recruit a premier Ph.D. back in 2003, but lacked the revenue stream to offer adequate compensation. After rejecting a written employment offer, the new recruit allegedly received a promise to be treated on par with the owners. Three years later, the company sold for $141 million, reaping the owners more than $20 million apiece. The plaintiff sued for breach of oral contract. Prior to trial, the defendants challenged the plaintiff's expert witness under Daubert, claiming his damages calculations were unreliable. Click here for the full article Divorce Courts Still Caught In 'Quagmire' of Goodwill Dividing the value of professional practice goodwill is still creating a "quagmire for courts," according to the first of these recent decisions. Are corporate and professional goodwill truly distinct? How does a non-compete agreement affect the distinction? Should there be a rule against considering the professional's earnings in both the practice valuation and the maintenance award? Whether these four cases help answer the questions or deepen the quagmire, only time (and future litigation) will tell. Click here for the full article Securities Fraud Litigation Requires Early Expert Proof of Loss Causation Two recent securities fraud decisions demonstrate the importance of providing expert loss causation evidence early in the proceedings, first to certify the class and next to pass the Daubert and summary judgment hurdles. Click here for the full article
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