Economic damages 101
Business disputes often result in one party losing money. It’s up to the legal system to award economic damages. This article discusses some approaches to quantifying economic damages, including the before-and-after method and the sales projection method. The article also notes potential pitfalls and contentious issues that may arise. The article points out that estimating lost profits is a natural extension of a valuator’s skill set.

Valuators help tackle newly reinstated estate tax
Succession and estate planning is a chore that business owners tend to put off. In light of the new tax laws and potential tax savings opportunities, it’s important to forge ahead with estate planning. This article briefly explains the exemption and rate changes mandated by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, and shows how these changes affect succession planning. A sidebar explains the status of  family limited partnerships (FLPs) and grantor retained annuity trusts (GRATs) under the act.

Why “double dipping” may become an issue
A business is often the most significant asset in a marriage. When a marriage ends in divorce, it can also become the most contentious. The term “double dipping” refers to a situation in which a spouse receives double payment for a single asset. Double dipping can become a controversial issue in marital dissolution cases requiring business valuations — depending on the state. This article mentions decisions in recent cases where the issue of double dipping has arisen. The article also notes that, to achieve fair outcomes, state courts consider the unique facts and circumstances of each case along with state statutes and case law in the jurisdiction in which the divorce is being decided.

Case Citations:
In re Marriage of Blazer, No. HO31574, Cal. App., Aug. 25, 2009.
In re Marriage of White, 192 Cal.App.3d 1022 [237 Cal. Rptr. 764].
Sander v. Sander, (AC26291), Conn. Super, June 20, 2006.
Steneken v. Steneken, supra, 367 N.J. Super. At 437-38, 843 A. 2d. 344, May 18, 2005.

Owners’ compensation: Too much, too little, or just right?
The question of owners’ compensation is frequently debated in shareholder disputes, divorces and IRS inquiries. Owners’ compensation can vary significantly from company to company depending on whether owners take too much — or draw minimal salaries because they undervalue their contributions or because the business is cash poor. This article explains how a valuator can help a company estimate a range of reasonable replacement compensation that eliminates “owner bias” and adjusts income to a level that reflects economic reality based on objective market data.